Inside Mike Vinokur’s October 2024 Stock Picks

Mike Vinokur, a seasoned portfolio manager with MV Wealth Partners at iA Private Wealth, shares his top investment picks amidst a turbulent market landscape. With a focus on North American large caps, Vinokur is steering his portfolio with caution, selecting high-potential stocks with resilient financial foundations. Here’s a closer look at his market outlook and why Cigna, Rogers, and Corebridge Financial are at the forefront of his investment strategy.

Market Outlook

Vinokur approaches the equity markets with a wary eye, as the current economic landscape appears somewhat precarious. U.S. Treasury yields have risen sharply, a troubling sign for a market already “climbing the wall of worry.” Since mid-September, the 10-year Treasury yield has surged from 3.65% to 4.28%, echoing a similar situation from the previous October, when yields neared 5%. This heightened volatility in the Treasury market could foreshadow challenges in equities.

While headline numbers such as GDP and employment data look promising, Vinokur points to deeper signals that suggest caution. Certain economic indicators imply that growth may not be as sustainable as it seems on the surface, and deficit spending has been masking potential slowdowns. With an expectation of a 5-10% market correction, Vinokur is strategically building up cash reserves, positioning himself to capitalize on a market “reset.”

Vinokur’s focus at MV Wealth Partners remains steadfast on North American large caps, prioritizing investments that promise long-term growth without excessive risk. His philosophy emphasizes resilience, especially amid rising economic uncertainty. By selecting companies with strong earnings and consistent cash flow, he ensures his portfolio is well-positioned to withstand market fluctuations.

Top Pick #1: Cigna (CI NYSE)

Cigna, one of the largest health maintenance organizations (HMOs) in the U.S., stands out as a well-managed company with a remarkable track record of earnings growth. Over the past decade, Cigna has compounded its earnings at over 13% per year, advancing from $7.29 per share to $25 in 2023. Through a combination of strategic acquisitions, effective cost containment, and aggressive share repurchasing, Cigna has shown itself to be a disciplined and savvy steward of capital.

The company’s financial performance reflects its strength. Since 2018, Cigna has repurchased approximately 25% of its outstanding shares, bolstering shareholder value while maintaining a strong balance sheet. Its robust earnings growth, coupled with a thoughtful approach to acquisitions, has positioned Cigna as a cornerstone in Vinokur’s portfolio.

Cigna’s advantages in the healthcare sector extend beyond numbers. Its integrated service offerings and expansive network provide a competitive edge, securing its market share and supporting future growth. With demand for healthcare services projected to rise, Cigna’s well-rounded structure makes it a solid investment.

Top Pick #2: Rogers Communication (RCI.B TSX)

Rogers Communication remains a dominant player in Canada’s telecommunications industry, bringing in billions in free cash flow. Trading at less than 10 times free cash flow with a near 4% dividend yield, Rogers presents a compelling value proposition. Vinokur’s confidence in Rogers is further bolstered by its recent commitment to reduce leverage, coupled with optimistic revenue and EBITDA projections.

Rogers’ recent earnings report highlights significant revenue and EBITDA growth, projected at 8-10% and 12-15%, respectively, over the next year. With solid cash flow and manageable debt, Rogers is well-positioned to enhance shareholder returns. Vinokur anticipates potential dividend hikes or share buybacks in 2025, adding to the stock’s appeal.

As Canada’s telecommunications needs grow, especially with the expansion of 5G networks and broadband services, Rogers is poised to capture new market share. Its established infrastructure and loyal customer base provide a competitive moat, making it a stable pick in a volatile market.

Top Pick #3: Corebridge Financial (CRBG NYSE)

Corebridge Financial, a recent spin-off from AIG, has rapidly positioned itself as a formidable provider of retirement solutions and insurance products. With an estimated earnings power of $5 per share, Corebridge currently trades at just over six times earnings, a bargain for a company with strong returns on capital.

Vinokur is particularly drawn to Corebridge’s ability to repurchase nearly 10% of its shares annually, enhancing shareholder value. The stock’s current 3% yield further underscores its appeal. For investors seeking steady income with growth potential, Corebridge stands out as a promising investment.

Corebridge’s focus on retirement solutions aligns well with demographic trends, as an aging population drives demand for retirement and insurance services. Its streamlined structure post-spin-off has allowed it to concentrate on core strengths, making it a nimble competitor in the financial services sector.

Managing Risks and Adapting to Market Shifts

Each of these companies offers unique advantages, but Vinokur remains vigilant about potential risks. Rising Treasury yields and a potentially cooling economy could impact all sectors. However, by selecting stocks with strong fundamentals and growth potential, Vinokur’s strategy mitigates these risks, providing a balanced approach to navigating market volatility.

Conclusion

In a market environment fraught with uncertainty, Mike Vinokur’s top picks—Cigna, Rogers Communication, and Corebridge Financial—highlight his commitment to finding value in stability. With a cautious but calculated approach, Vinokur positions his portfolio to withstand short-term turbulence while capitalizing on long-term growth opportunities. His choices underscore the importance of a disciplined, well-researched investment strategy for today’s unpredictable markets.