Stock Picks of the Week Past and Ahead

Assuming a positive market trend, Last Weekend’s Blog top recommendations were Potash (POT), Agrium (AGU) and Teck Cominco (TCK.B). All three  stocks had big upwards moves during the week although the two agriculture plays backed off by Friday. I sold Potash in my M-in-Law’s RSP account @ $107.24 (purchase price $105.53). It closed the week @ $105.95. Both companies announced this past week very poor quarterly profits and future guidance although they had jumped earlier owing to speculation of a possible takeover of Potash by Australian mining giant BHP Billiton. With the weak guidance ahead, I’d recommend to take any profits and repurchase at a lower price. Longer term outlook for both is very positive. Teck Cominco made a new 52 week high this past week and its current upward momentum looks very strong.

New Positions Taken Over the Past Week include: Cash Account: I purchased small positions of Talisman (TLM) each day during the week at prices ranging from $19.24-$19.99, averaging $19.68 (Friday close $19.37). I also purchased it in my M-in-Law’s and personal RSP accounts @ $19.75 & $19.63. For my wife’s, M-in-Law’s and my personal RSP accounts, I purchased Nexen (NXY) @ $24.87 & $24.64 (Friday close $24.52). Lastly, for my M-in-Law’s RSP account I purchased a small amount of CNQ @ $75.52 ($74.43) and Crescent Point Energy @ $37.57 ($38.15).

Stock Picks for the Week Ahead: Assuming a positive market trend, I still like CNQ, NXY & TLM. The big question being what direction will the Market take in the week ahead ?  It appears that the market will open as it ended this past week (on a rather sour note). As to the performance by the week’s end, it’s very difficult to get a handle on that. I’d recommend to stay defensive and await opportunities as they open up. In the more defensive sectors, the insurance companies are looking interesting, including Manulife (MFC), Sunlife (SLF) and Great West Life (GWO). All three had very soft performance this past week. Keep a close eye on the momentum mid week and good luck. Warren.

The Week Ahead

As correctly predicted 3 weeks ago, the stock market was both volatile and negative (see Sep.27^th blog). As incorrectly predicted 2 weeks ago, the market did not suffer more of the same. However, I did recommend (1) taking positions in defensive high yielding stocks; (2) watching the big banks for any price weakness; and (3) take positions in Big Energy stocks owing to the price weakness then.

Stock Recommendations of Last Blog included: CNQ @ $68.42 – now $78.47, ECA @ $59.61 – now $64.95, NXY @ $22.47 – now $26.02, SU @ $35.35 – now $39.98, TLM @ $17.86 – now $20.08, & CPG @ $35.51 – now $37.54.

Stock Trades Completed October 5 - 9 include: Trading Account: Week of Oct. 5 – 9: Purchased more NXY @ $24.16 (lowering average cost to $24.80), and Purchased more TLM @ $18.11 (lowering average cost to $18.73). Sold TLM @ $19.26 (holding period 3 -1 5 trading days). In M-in-Law’s RSP account, I sold NXY $25.63 (cost $24.96), CNQ $76.75 (cost $74.17), ECA $64.27 (cost $62.52).

Stock Trades Completed October 12 – 16 include: Trading Account: I sold  NXY @ $25.77 (cost $24.80). In different RSP accounts, the following stocks were sold:  NXY @ $25.97 (costs $24.60 & $25.05), TLM $19.75 (costs $19.47 & $19.49), CNQ $76.62 (cost $75.00), & ECA $64.38 (cost $63.59). These positions were held for 14 – 19 trading days.

New Defensive Positions Taken Over the Past two Weeks include: For M-in-Law’s RSP I purchased small positions in the following: Canadian Western Bank Preferred “A” @ $26.85 (now at $26.75 paying a 6.78% dividend), Sunlife Preferred “B” @ $19.76 (currently at $19.69 paying 6.095%), Pengrowth Units (PGF.UN) @ $10.46 (closed at the same paying 8.03%), Vermillion Energy Units (VET.UN) @ $30.87 (closed @ 30.64 paying 7.44%) and Yellow Pages Units (YEL.UN) @ $5.61 (currently at $5.70 paying 14.04%). Both Vermillion and Pengrowth had announced new stock offerings to raise money (for purchases) and I took that as a positive sign. Crescent Point Energy (CPG) had done the same this week.

Defensive Stock Recommendations for the Week Ahead include: Vermillion, Pengrowth & Crescent Point as noted above. Epcor Power is issuing a new 5 year rate reset preferred paying 7.0%. Manitoba Tel (MBT) has was hammered two weeks ago on weak guidance ahead but it now pays a reasonably safe 8.23% dividend. Bell Alliant Units (BA.UN) pays a 10.59% dividend. Both Manulife (MFC) and in particular, Sunlife (SLF) look interesting for longer term positions. For preferred shares, Manulife, Sunlife, Industrial Alliance, Great West Life, Power Corp, Power Financial, CIBC (series L & M) and National Bank (P) all pay above 5.9%. Transcontinental’s new preferred (D) is yielding 6.84%.

Momentum Stock Recommendations: I’ve sold most of my positions waiting for which direction the market will take. However, I do note that Big Energy stocks have been on fire, including CNQ, ECA, NXY, SU & TLM. To this can be added Big Agriculture AGU & POT and Mining Giant TCK.B. I would recommend watching these closely for where they appear to be headed. Agriculture stocks look particularly interesting as they have not participated in the recent rally to the degree that the other commodity related stocks have. Good luck and remain cautious. Warren.

Another Volatile Week Ahead ?

As predicted in last weekend’s blog, this past week’s stock market performance was both volatile and negative. The week ahead should offer more of the same. Traditional October results have set in. Everyone is quoting Bear Analysts. I recommend extreme caution and wait it out for now. Take some profits off the table and lighten overall positions to take advantage of upcoming price corrections.

New Positions Taken Over the Past Week: I purchased Brookfield Properties new Preferred Share (BPO.PR.L) in my M-in-Law’s RSP account @ $25.00 which is the price that it closed at.

Potential Stock Accumulations Over the Near Future (?): (1)Defensive stocks worth considering include: Bell Atlantic Units (BA.UN) currently paying a 10.6% yield, BCE paying a 6.2% dividend, Manitoba Tel (MBT) paying a 7.81% dividend & Trans Canada Pipeline (TRP) paying a 4.66% dividend.(2) Keep a close eye on the big six Banks as they have temporarily lost their forward momentum and could be picked up shortly at some interesting price levels. (3) Big Energy Stocks undergoing corrections could also be smart choices soon including: CNQ ($68.42), ECA ($59.61), NXY ($22.47), SU ($35.35) & TLM ($17.86). I also like Crescent Point Energy (CPG @ $35.51)in the category which also yields 7.77%.

Remain cautious but open to opportunities in great stocks. Good luck, Warren.