A Big Week Ahead ?

Completed Trades over the Past Two Weeks: September 14: Purchased NXY $24.02, CNQ $70.38, Sold September 15 NXY $25.45, CNQ $73.03. Cash Account.

New Positions Taken Over the Past Two Weeks: Cash Account between Sep. 17-24. (1) Purchased TLM @ $18.55, $19.06 & $19.26 (Avg. $18.96). Closed Friday @ $18.20. (2) Purchased NXY between $24.62 - $25.43 (Avg. $24.96). Closed Friday @ $24.56. Purchased in personal/wife’s RSP’s between Sep. 16 – 23: NXY ($24.60 & $25.05), TLM ($19.47 & $19.49), ECA ($63.59 closed Friday $60.80), & CNQ ($75.00 closed Friday $72.51). Purchased in M-in-Law’s account between Sep. 14 – 24: ECA ($62.52), TLM ($18.96), NXY ($24.96), CNQ ($74.17).

Longer Term Positions Taken Over the Past Two Weeks: For M-in-Law’s RSP account not designed for short term trading, the following positions were added for income and security between Sep 8 – 18: BCE $27.11 (+ $0.405 ex-div) closed $26.10, National Bank (NA) $59.98 (+ $0.62 ex-div) closed $59.21, Manitoba Tel (MBT) $33.08 (+ $0.65 ex-div) closed $32.65, CIBC (CM) $65.95 (+ $0.87 ex-div) closed $65.31, MFC.PR.D $27.85 closed $28.00, CM.PR.M $28.07 (+ $0.403125 ex-div) closed $27.63, RY.PR.R $27.82 closed $27.96, & Bell Atlantic Units (BA.UN) $26.71 closed $27.36 (+$0.24 ex-div). Bell Atlantic, a reasonably safe trust unit currently delivers a 10.966% annual dividend distributed monthly.

Preferred Share Commentary: I’d like to thank a reader of this blog, Mr. James I. Hymas of Hymas Inv. Mgmt, for clarifying some errors I had printed in earlier blogs. Preferred shares: BMO.PR.L, RY.PR.D, SLF.PR.A & B, will not reset at the later indicated date but will be redeemed. Thank you James for the clarification (I had read the Globe & Mail’s rate reset/redemption date listing incorrectly).

New Preferred Listings: Great West Lifeco 5.65% Perpetual & Transcontinental 5 year rate reset 6.75%, both settling around Oct. 2, TransCanada 4.60% 5 year rate reset settling this week, and Brookfield Properties (BPO.PR.L) 5 year rate reset 6.75% now trading. As TransCanada’s regular common shares (TRP) are considered very safe (& recently highly recommended by both experts on BNN’s Market Call and Jim Cramer of CNBC’s Mad Money) and offer a 4.5% dividend, the upcoming preferred doesn’t offer tremendous upside. Provincial Government Bonds offer a yield very close to this rate (see below). I like the Brookfield Properties issue.

Bonds, etc: Just issued: Province of Alberta 4.0% Dec 1, 2019, yield to maturity: 4.098% semi-annual – 4.14% annual. Province of PEI 4.25% Sep 24, 2019, yield to maturity: 4.26% semi-annual - 4.31% annual. Compare a 4.31% government debt guarantee to a 4.6% good quality preferred share…Also expected shortly, Russel Metals (RUS) 7.75% Convertible Debenture.

The Week Ahead: Could be a volatile and negative week ahead. None the less, certain stocks worth accumulating cautiously on weakness include: CNQ, AEM, AGU, Crescent Point Energy (CPG), ECA, TLM, & TCK.B. Top pick is TLM. Next are AGU, CPG & CNQ. For a mid-term pick, I like RIM which got pummeled this week. Safer positions that look interesting include: BCE, NA, MFC, & IGM. Royal Bank (RY) though constantly flirting with or making new 52 week highs, has displayed a very solid performance recently worth recognizing. Three stocks receiving a lot of “professional” attention of late include: CPG, Osisko Mining (OSK) & SXC Health Solution Corp (SXC). Watch their price movements. Good luck, Warren.

Momentum Trades for the Week Ahead

Top 5 Picks of Last Weekend include: CNQ $63.51 - $70.21 (+10.55%/week), TLM $17.53 - $19.16 (+9.30%), NXY $22.20 - $24.11 (+8.60%), Friday High $24.83, TCK.B $26.50 - $28.36 (+7.02%) Friday High $28.90, & RIM $84.40 - $85.70. Pretty good week.

Long Term Value Picks of Last Weekend: (Not Momentum) AGU $53.89–54.15 (High $55.62), CNR $53.90–54.07 ($54.50), POT $97.18-96.85 ($100.50),

RY $56.40-56.16 ($56.92). Value on Weakness: MFC $21.57-21.49 ($22.04) Weekly Low: $21.02.

Trades Completed This Past Week Include: Sold CNQ @ $67.85 (cost $63.15) & $67.58 (cost $62.85) in RSP and M-in-Law’s RSP. Also to receive $0.105 dividend. Holding period 7 trading days each. Sold NXY @ $23.76 (cost $21.56) M-i-L RSP. Holding period 7 & 9 T-days. Dividend $0.05; $23.81 (cost $21.77) Wife’s RSP. Holding period 7 T-days; $23.82 (cost $22.50) my RSP, held 10 T-days; & $23.87 (average cost $21.88) Cash Account. Purchased between July 21 – Sep.1. Ditto on the dividends. Sold TCK.B @ $28.51 (cost $27.14) M-i-L RSP, held 7 & 9 T-days. Sold SLF @ $30.13 + $0.36 div., (cost $33.16 – i.e. at a loss) in my Cash Account. Held since Aug. 6^th. A small position which I wanted to clean up and match with the NXY gain. As I was unavailable for trading on Friday, these trades were (unfortunately) made on Thursday prior to the larger run up of Friday AM.

Momentum Trades for the Week Ahead: The energy sector is hot ! Encana’s announcement of re-visiting the idea of a company split into two entities also added some fuel to fire. The stock was up over 13% this week. I’ll predict a volatile week ahead in the energy sector, with sharp movements potentially in either direction that could result on some big short term profits.

Primary Stocks to watch closely are: CNQ, ECA, NXY &; TLM. In the mining sector, keep an eye on TCK.B &; Agnico Eagle (AEM).

Secondary Stocks to watch this week are: Suncor (SU), Goldcorp (G) & Kinross (K).

Keep a close watch. There could be some big momentum swings following last week. Good luck, Warren.

The Trading Week Ahead

Fortune Magazine’s August 31^st issue listed the 100 fasting growing companies worldwide, provided they were listed on a major US exchange, filed quarterly reports with the SEC, market cap over $250 million, stock price over $5 and a minimum 20% annual growth over the past 3 years. The top Canadian companies listed and their rankings were: RIM (1), Potash (10), Open Text (15) & Enbridge (99).

This weekend’s Barron’s surveyed 10 leading market strategists, 5 of whom believe the S&P 500 will end higher this year and 5 lower. Each was asked to pick the sectors they favored or preferred to avoid. The results were as follows (favored first): Technology 8-0, Energy 7-0, Industrials 6-0, Materials 6-0, Financials 5-1, Health Care 3-4, Consumer Discretionary 1-2, Telecom 0-4, Consumer Staples 0-6, and Utilities 0-7. It would appear that these strategists have very similar likes/dislikes with a strong aversion for defensive stocks (Staples, Utilities, Telecom & Health Care).
Long term Canadian Stock Performance: Based upon a review of stock performances over the past 25, 20, 15 years (if applicable), 10, 5 & 3 years, the top performing and consistent Canadian Large Cap stocks are: 1. RIM, 2. CNQ, 3. SU, 4. RY & 5.CNR. One could include POT & AGU if the past horrific 12 months were not factored in (i.e. consistent performance).

Caution is still the Recommended Strategy: My wife’s and my combined RSP portfolios are broken down as follows: 47% Cash, 26% Energy, 27% Financials.

M-in-Law’s RSP: 51% Cash, 18% Bonds, 31% Equities of which 10% Energy, 12% Financials & 9% Materials/Mining.

Income Vehicles to Consider: Brookfield Properties is coming out this week with a 5 year rate reset preferred share paying 6.75% annually. Corporations declaring nice dividends this week include (annual dividend rates in brackets): September 10^th: BCE (5.98%), Encana (3.13%), Manitoba Tel (7.91%), and Shaw Comm.B (4.42%). Others occurring shortly include: CIBC (5.59%), National Bank (4.13%), Power Financial (4.78%), and Trans Canada Pipeline (4.69%).

Trades Completed This Past Week Include: Purchased CNQ @ $63.15 (RSP) and $62.85 (M-in-Law’s RSP) with a $0.105 dividend declared for the close Monday. Also purchased NXY @ $21.77 (Wife’s RSP), $21.41 & $21.73 (M-in-Law) averaging overall cost price to $21.56, and $21.84 & $20.86 (Cash Account) averaging overall cost price to $21.83. NXY is also ex-dividend this weekend of $0.05. CNQ closed Friday @ $63.51, NXY @ $22.20.

The Week Ahead: I still like the short, medium and long term prospects for Energy, Materials and Technology. Buy on dips: CNQ, TLM, NXY, TCK.B, & RIM. Based upon crunching the 25 to 3 (and current) year performance numbers this weekend, I’ll also recommend: RY, AGU, POT & CNR. Manulife (MFC) too looks quite cheap. Good luck and have a great week ahead. Warren.