Stocks to Consider for the Longer Term

With the market generally winding downwards, it has been near impossible to make any substantial recommendations for stock trading, which is the goal of this blog. However, as certain great company stocks break past or even close to new 52 week lows, it opens up opportunities to pick them up at near bargain prices, at least for smaller positions. Take a look at the following:

Financials: Bank of Montreal (BMO), Scotiabank (BNS), CIBC (CM), Great West Life (GWO), National (NA), Royal (RY), Sunlife (SLF) & Toronto Dominion (TD). Look at the yields and P/E’s. Sunlife is paying near 6% in annual dividends, many of the banks close to 5%. Why purchase a low yielding bond ? The corporate fixed income market is probably not as secure as we’d like to think anyway…

Energy: Canadian Natural Resources (CNQ), Encana (ECA) paying a 3.5% dividend ! & Suncor (SU). Even 2^nd stringers like Nexen (NXY) & Talisman (TLM) look interesting.

Resource-Industrial +: Agrium (AGU), Canadian National Rail (CNR), Canadian Pacific (CP), Potash (POT), Teck Resources (TCK.B). Careful with precious metal stocks, you never no how the wind can abruptly change. The agriculture stocks have held up reasonably well of late.

Safety Play: BCE. Continually churning out revenue and profits, almost irrespective of the economic conditions. Good luck, stay defensive but be open to possible longer term picks.

Market Opportunities

The market has been swinging wildly with the professionals utilizing the media to scare the smaller retail investor to unload while the market craters.  Someone will be making a lot of money having purchased great companies at value prices. Keep your cool and watch as the opportunities unfold.  

Financials: Many Canadian financials have hit or are very close to new 52 week lows. These corporations are much better capitalized than those in the US and are beginning to look very attractive with solid dividend payouts. Top of the list to watch include: Bank of Montreal (BMO), Scotia Bank (BNS), National (NA), Royal (RY) & TD. There will be an opportunity very soon (if not now) to pick these up at discount rates. Insurance companies are worth watching but offer a little less safety.

Resources: Energy, Agriculture & Mining stocks have all been hit hard as the media advises us of a world slowdown that will impact demand. Yes, demand could be impacted, but to what degree as the world’s population continues to grow, particularly the middle classes in the BRIC countries ? Keep a close watch on these great companies: Agrium (AGU), Canadian Natural Resources (CNQ), Potash (POT), Suncor (SU), Teck Resources (TCK.B). Canadian National (CNR) is a perfect compliment to this group.
Safety Plays: Telecoms have faired very well throughout the recent turbulence. BCE & Telus (T) offer rich and reasonably safe dividend yields.

Value Investing Theory: When the market is swooning, great companies’ stock prices fall in tandem with the worst of companies. However, don’t get too smart as the market might have further to drop. Good Luck.