Inside Barry Schwartz’s Investment Strategy: July 2024 Picks

Unveiling Barry Schwartz’s Investment Insights for July 18, 2024

Editorial Team (ET)May 8, 2025

When it comes to navigating the complex world of investments, Barry Schwartz, CIO and portfolio manager at Baskin Wealth Management, stands out as a beacon of insight and strategy. Known for his expertise in North American large caps, Schwartz's latest market outlook and top picks provide a roadmap for investors seeking to capitalize on current trends and future opportunities.

Market Outlook

Happy days are here again for the markets! The dark clouds that have persisted from the pandemic, high inflation, and restrictive interest rates are receding. The prospect of global rate cuts, combined with strong corporate earnings and the certainty of the U.S. Presidential election, creates a recipe for a bowl of Goldilocks’ famous porridge – not too hot, not too cold, but just right.

The market is trying to get ahead of what it thinks will be a flood of money put to work from cash on the sidelines. In this environment, almost all asset classes should do well: growth, dividends, value, small caps, and even fixed income. But have we eaten a lot of the future returns already? There’s a good argument to be made that valuations are quite high overall. However, under the hood, many stocks are well below their 2021 levels, especially in Canada.

The best businesses in the world, the Magnificent Seven, are pushing up valuations, but the world has never seen companies like this before; there is no precedent. The S&P 500 Index is trading around 20 times 2025 year’s expected earnings. That seems pricey; however, if you see decent organic revenue growth above inflation, rising profit margins, and double-digit earnings per share growth, you can’t be faulted for being excited about the future. We remain fully invested for our clients in high-quality North American companies, exclusively, with most of our allocations to U.S. companies. In fixed income, we are extending our maturities out five years or further to lock in higher rates for longer. We think a year from now, one-year GIC rates in Canada will be in the three percent range, and the only choice for investors will be more volatile assets.

Top Picks Overview

Schwartz’s top picks for July 18, 2024, are CCL Industries, Domino’s Pizza, and Amazon. These companies were chosen for their unique strengths and promising outlooks in their respective industries.

CCL Industries (CCL.B TSX)

CCL Industries is the largest label maker in the world, renowned for its extensive portfolio and innovative solutions. The company has a strong track record of creating value through mergers and acquisitions, positioning itself as a leader in the labeling and packaging industry.

Shares of CCL Industries have been under pressure over the last few years due to high resin pricing and soft demand for electronics and consumer packaged goods. Despite these challenges, the company has maintained a clean balance sheet and continues to demonstrate resilience.

Schwartz considers CCL Industries a solid investment due to its attractive valuation at 17 times earnings and its potential for growth as competition from private equity for acquisitions slows down. The company's strategic initiatives and strong market position make it a compelling choice for investors.

With a robust pipeline of M&A opportunities and a focus on innovation, CCL Industries is well-positioned to capitalize on market trends and drive future growth. The company’s strong balance sheet and strategic investments provide a solid foundation for long-term success.

Domino’s Pizza (DPZ NYSE)

Domino’s Pizza is a global leader in the pizza delivery and restaurant industry. Known for its innovative marketing strategies and technological advancements, Domino’s has consistently outperformed its competitors.

Domino’s has outperformed the restaurant industry this year due to its decision to hold pricing last year on its national Mix & Match deal, as well as initiatives to improve the loyalty program and sell through Uber Eats.

Schwartz highlights Domino’s strong management team and strategic initiatives as key factors for its continued success. The company’s focus on enhancing the customer experience and expanding its market reach through partnerships like Uber Eats has driven franchisee profitability to record levels.

With franchisee profitability at record levels, Schwartz expects store growth and market share gains to accelerate for Domino’s. The company’s ability to adapt to changing market dynamics and leverage its technological advancements positions it for continued growth.

Amazon (AMZN NASD)

Amazon, a global e-commerce and cloud computing giant, continues to dominate multiple sectors with its innovative approach and vast resources. The company’s key segments include retail, Amazon Web Services (AWS), and digital streaming.

Over the past two years, Amazon has focused on fixing the cost structure for its retail business after the pandemic boom. This has resulted in a more nimble footprint with faster delivery speeds and better margins.

Amazon’s strong position in both e-commerce and cloud services allows it to respond and compete effectively, whether in AI or against Chinese direct sellers. Schwartz believes that Amazon’s strategic initiatives and competitive advantages make it a strong pick for investors.

Schwartz considers Amazon’s valuation reasonable at 21 times EBITDA, given its potential for growth in both e-commerce and cloud services. The company’s continued focus on innovation and expanding its market reach positions it for long-term success.

Conclusion

Barry Schwartz’s top picks – CCL Industries, Domino’s Pizza, and Amazon – reflect his confidence in high-quality North American companies with strong growth potential. These selections are backed by thorough research and a strategic approach that emphasizes resilience, innovation, and market leadership. As the market outlook brightens, these companies are well-positioned to deliver solid returns for investors.

Bloomberg

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