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.