Top Portfolio Manager’s Top 3 Picks; Sees Alpha in Canadian Trucking Play

Andrew Hamlin, VP and Portfolio Manager, Aston Hill Asset Management highlighted his 3 top picks on BNN on Friday (Citi, Mondelez, and Titanium Transportation Group. Here is a brief summary of each pick:

According to Hamlin Citigroup (NYSE:C) will do well regardless of what interest rates do and the company will be raising its dividend significantly over the next few years. Citi should also benefit from lower legal costs given the number of high profile legal settlements in the last couple of years. Net interest margins should also begin to expand if the Fed begins a rate-hiking cycle (the initial rate increases are unlikely to be passed on to depositors).

Mondelez (NASD: MDLZ) is “in all the right products with high growth associated with them (candy, gum, and biscuits)…” and it is also a margin improvement story. EBIT margins are expected to accelerate to 15%-16% in 2016 and Mondelez has managed to achieve double-digit EPS growth which is roughly double its peer group (12% vs. 6%). Near term growth opportunities for the company include: 1) new packaging opportunities (e.g. hand-to-mouth mini-size packages), 2) biscuit sales in India, 3) gum sales in China, 4) the global roll-out of Oreo Thins, and 5) broader roll out of “bubbly” or fruit-infused chocolate.

Hamlin views Titanium Transportation Group (TTR.V) as a growth story that is largely unaffected by some of the turmoil in other market sectors (high yield, crude oil, etc.). TTR has a very smart strategy of acquiring smaller ‘mom & pop’ trucking firms and integrating them into its network, thereby achieving greater efficiency and economies of scale. TTR isn’t dependent on capital markets to execute its smaller acquisitions and the company continues to achieve impressive rates of organic growth (~15%).

“12 months, 16 months from now I think we will sit down and this will be a much larger company.”

Hamlin see C$4-C$5 as a realistic 12-18 month price target for TTR. Street analyst targets on TTR range from C$4.20-C$4.60.



Click over to watch the full clip, Titanium Transportation segment begins around the 2:50 mark:

Andrew Hamlin Top 3 Picks