Paul Harris, Portfolio Manager, Harris Douglas Asset Management Inc. shares his outlook on Large Cap North American & Global Equites.

Paul Harris, Portfolio Manager, Harris Douglas Asset Management Inc.

Focus: Large Cap North American & Global equites

Top picks: First Service Corp, Visa, Adobe

MARKET OUTLOOK:

We continue to believe we will see further volatility in capital markets.

We think the uncertainty will continue to flourish as we move into 2026.

We think the full impact of tariffs will impact the U.S. economy in 2026 as we see higher inflation and continued slower job growth. This should slow company profit growth.

Most strategist have the S&P 500 growing at 11 per cent next year. I think this will not happen and we are in for a negative year in stocks. One fear is we go into stagflation (slower growth and higher inflation) and the Federal Reserve has little room to maneuver.

I suspect we will see fewer rate decreases in the U.S. I think market pullbacks are healthy and we need to see a 10 to 15 per cent pullback that will readjust valuations and allow for more upside.

TOP PICKS:

Paul Harris’ Top Picks: First Service Corp, Visa-V and ADOBE Paul Harris, Portfolio Manager, Harris Douglas Asset Management Inc. shares his top stock picks to watch in the market.

First Service Corp (FSV TSX)

The company focuses on residential property management and services (California Closets).

It has room to grow market share in the U.S. in what remains a very fragmented business.

The company has grown through acquisitions and organic growth. Trades at 24 times next year’s earnings and yields 0.73 per cent.

Visa (V NYSE)

Visa is like a toll booth. When you use the card Visa get 15 basis points per transaction.

It processes over 65,000 transactions per second. Today 17 trillion in consumer transactions still use cash and has good organic growth internationally.

Visa still has growth in the Business to Business market especially with loyalty programs.

We think we will see acceleration in revenue growth into the teens driven by:

an improving macro backdropsuccessful competitive changes around pricingfaster-than- anticipated consumer payment innovations such as mobile payments and stable coins.

Visa offers long-term secular-driven stocks and should provide solid organic growth. Visa is expected to generate 21.0 billion in Free Cash Flow in 2025, return on invested capital of 24 per cent, gross margins of 80 per cent and operating margins of 60 per cent.

Adobe (ADBE NASDAQ)

Wall Street thinks AI is going to kill Adobe.

But the numbers tell a very different story. Adobe’s revenue has grown every single quarter for the last four years, from US$3.4 billion in 2020 to nearly $6 billion today.

Adobe has quietly reduced its share count by nearly 10 per cent, buying back stock quarter after quarter. Fewer shares + Steady growth = Compounding machine.

The growth hasn’t slowed much at all, either. Adobe is still compounding revenue at 10 to 12 per cent year over year. The stock is trading at half its usual valuation at a forward price to earnings ratio of 14 times.

DISCLOSUREPERSONALFAMILYPORTFOLIO/FUNDFSV TSXYYYV NYSEYYYADBE NASDAQYYY

PAST PICKS: FEB. 24, 2025

Paul Harris’ Past Picks: Alphabet, Novo Nordisk and MSCI Inc. Paul Harris, Portfolio Manager, Harris Douglas Asset Management Inc. discusses his past stock picks and how they’re doing in the market today.

Alphabet (GOOG NASD)

Then: US$181.19

Now: US$314.60

Return: 74%

Total Return: 74%

Novo Nordisk (NVO NYSE)

Then: US$90.59

Now: US$52.93

Return: -41%

Total Return: -40%

MSCI Inc. (MSCI NYSE)

Then: US$573.55

Now: US$581.96

Return: 1%

Total Return: 2%

Total Return Average: 12%

DISCLOSUREPERSONALFAMILYPORTFOLIO/FUNDFSVYYYVYYYADBEYYY