Stock Picks for December 2009

HOT COMMODITY STOCKS: Agrium (AGU) and Potash (POT) have been on fire of late. Keep a close watch for weakness which could be a new entry point. Agrium hit a new 52 week high while Potash climbed almost 14% this past week.

In the precious metal and mining sectors, Goldcorp (G), Yamana Gold (YRI)  and Teck Cominco (TCK.B) hit new 52 week highs. Barrick Gold (ABX) has also demonstrated technical strength. A little weaker technically but possible opportunities include Agnico Eagle (AEM) and Kinross (K).

In the energy sector, Crescent Point Energy (CPG) hit a 52 week high. It also pays a 7.014% annual dividend paid monthly (it’s an ex-trust unit).  Canadian Natural Resources (CNQ) @ $70.60, Nexen (NXY) which popped up and back $1.30 to close @ $26.04, and Talisman (TLM) @ $18.58 look very solid going forward. Suncor (SU) @ $38.07 also has shown god technical strength, while on the other hand, both Encana (ECA) @ $56.40 (3.03% dividend) and Husky (HSE) @ $28.15 (4.26% dividend) have shown some weakness which could make for good entry points. For Encana, the company will be split into two organizations as of November 30^th, so one can wait for the pricing outcome to move in further.

HOT FINANCIAL STOCKS: Bank of Montreal (BMO) up $2.42 this week to close @ $53.87, while Bank of Nova Scotia (BNS) @ $48.73 and National Bank (NA) @ $62.61 both hit 52 week highs. The other three majors, CIBC (CM), Royal Bank (RY) and TD look very strong technically.

The insurance sector  is looking weak. Manulife (MFC) announced a stock purchase deal @ $19.00 causing it to drop over 5%. Could be a new entry point for the mid-long term. Sunlife (SU) bounced back $1.18 this week but has been looking soft (4.94% dividend). Other major financials of interest include Power Financial (PWF) @ $27.58 (5.07% dividend) and TSX (X) @ $29.75 (5.11% dividend) deserve a new look, again for mid-long term holdings.

SAFETY PLAYS: Worth reviewing include Bell Alliant Units (BA.UN) @ $27.51 (10.73% dividend) and Transcanada Pipe (TRP) @ $33.16 (4.58% dividend). I also like a few preferred shared including: Canadian Western Bank (CWB.PR.A) paying 6.81% and Brookfield Properties (BPO.PR.L) @ 6.53%, a new issue which also hit a new high this week. The other preferred shares paying a slightly higher rate than the norm include the weaker financial institutions including CIBC, Industrial Alliance, Manulife, Power Financial, and Sunlife – most of them paying above 5.9%.

OVERVIEW: The period following US Thanksgiving through to year end is usually a very strong time for stock performance. Buying quality stocks at as low and discounted a price as possible will usually yield good benefits. However, don’t be shy to take profits to lighten up for other opportunities. Have a great week, Warren.

Stock Picks For The Balance of 2009

While this is generally a blog devoted to weekly trades, there are certain recurring themes that should be noted and taken advantage of for the next few weeks. The is generally a strong period for most types of stocks except those that have shown tremendous weakness and could still fall further with end of year tax loss selling. Note the recommendations listed below:

Strong Buy Recommendations: These include Canadian Natural Resources (CNQ), off $4.00 in the past three weeks. It closed Friday @ $70.19 and hit a low of $68.77 during the week. I purchased some for my M-in-Law and personal RSP’s @ $70.82 & $70.86. Talisman (TLM), off $1.12 over three weeks, closing @ $18.27. Encana (ECA), down $4.69 over three weeks to close at $58.41. Agnico Eagle (AEM), still down over $8.00 closing @ $63.75.

Buy Recommendations: I still like Nexen (NXY) and Suncor (SU) although I’d prefer to buy both at slightly lower levels. I still hold Nexen in my wife’s RSP. In the precious metals sector, watch Kinross (K) which is down over 10% in 3 weeks and Teck Cominco (TCK.B).

Hot Stocks not Picked: Canadian National Railway (CNR) has been on fire. I can’t even guess as to how high it can still go further but it hit a new 52 week high almost every day this past week. Royal Bank (RY) has shown itself to be reasonably indestructible as a stock pick. This also holds true for its 1-3-5-10-15-20 year charts !

Value Picks: These include Husky (HSE) @ $28.30 still down over $2.00 in three weeks, also offering a 4.24% dividend, Power Financial (PWF) @ $27.65 paying a 5.06% dividend and TSX Group (X) @ $28.93 paying a 5.25% dividend. I still like and am holding in RSP’s and M-in-Law’s RSP Sunlife (SLF) down over $2.50 in three weeks, closing @ $27.98, paying a 5.15% dividend, although the technical chart doesn’t look all too strong.

Watch List: Hudbay Minerals (HBM) made a major discovery recently. The stock skyrocketed and has generally shown very strong performance. Reached a high this week of $17.00 to close @ $16.00. Keep an eye for any opportunities on weakness.

Income Recommendations: Note the Current Dividends of the Following: Bell Alliant units (BA.UN)  10.83%, Bank of Montreal (BMO) 5.44%, BCE 5.97%, CIBC (CM) 5.29%, Crescent Point Energy (CPG) which made a major recent acquisition @ 7.09%, Manitoba Tel (MBT) 8.29%, Telus (T) 5.79%.

As mentioned, the next six weeks are usually a very strong period for the market. Keep an open mind towards any weakness in stocks that have performed well for opportunities. It’s a good time to closely watch the market. Good luck, Warren.

Stock Picks for the Week Ahead

Stock Picks from the Weeks Past: Most recent blog (2 weeks ago) noted to watch the overall market trend for any indications to re-enter. The last week of October was quite dismal. Two areas of concentration to closely monitor were (and still are) Energy Giants and Insurance Companies. The Energy industry took a nice hit the last week of October (some also this past week) offering some nice entry points. These stocks include Canadian Natural Resources (CNQ), Nexen (NXY) & Talisman (TLM). Manulife (MFC) & Sunlife (SLF) also took some major hits this past week. Previous blog also recommended/noted that I also took profits in the large Agriculture stocks, Potash (POT) and/or Agrium (AGU) after a nice run up from previous weakness.

Stock Trades Completed in the Past Two Weeks:  In my RSP and M-in-Law’s RSP accounts, I sold NXY @ $24.91 (cost $24.64) and $24.91 (cost $24.46). Stock was held between 5 and 8 trading days. Nexen had also slipped to $22.88 this week, closing at $25.17.

New Positions Taken in the Past Two Weeks:  I purchased CNQ on weakness in both my wife’s and M-in-Law’s RSP’s for $67.10 & $67.24. Stock closed at $70.20 and had slipped to $66.51 during the week.  I also purchased more TLM in both my RSP and Cash accounts for $17.83 & $18.75 reducing my average cost price if the stock to $18.73 (RSP) and $19.41 (Cash). I’m comfortable with holding them and adding more. Stock closed @ $18.39.

Stock Pick for the Week Ahead: It appears that the market will hold this upcoming week but caution is always the overall recommendation. I would rate CNQ & TLM as strong buys on weakness. I would also rate SLF as a strong buy in small quantities. In the mining sector, Agnico Eagle (AEM) declined by over 20% last week of October and bounced back but is still $10 below its October 23^rd closing price. Assuming that precious metals continue to shine, I rate it a strong buy.  New stocks of interest based upon recent weakness include: Husky Energy (HSE) @ $28.19 which also offers a 4.26% dividend, Suncor (SU) down almost $3 in 2 weeks, and TSX Group (X) down $5.64 (16.5%)in 2 weeks, also offering a 5.33% dividend. The stock will probably decline Monday as it becomes ex-dividend as of Tuesday’s market open. Could be an interesting opportunity after it drops. Kinross (K) also dropped over 10% 2 weeks ago and has not come back (yet). Sunlife as noted above now pays a 5% dividend. Power Financial (PWF) also pays over 5%. Keep a close eye on opportunities and good luck ! I wish you all a successful week ahead, Warren.