Canadian Large Cap Stock Opportunities

Last Week I recommended readers lighten up on any unnecessary positions. The week since has been pretty rough. According to expert commentators on CNBC, the performance of the (US) market in January has been correct at predicting the balance 55 of the past 59 years. However, market downturns also offer good buying opportunities for great companies. Some of these would include:

Energy Giants: CNQ ($68.25), ECA ($32.70), NXY ($23.41), SU ($33.76) & TLM ($17.69). I sold TLM @ $18.18 (at a small loss) on Thursday to lighten up overall position for potential buying opportunities. HSE ($26.60) is close to a 52 week low and pays a nice 4.51% annual dividend.

Precious Metals: AEM ($54.05), ABX ($37.12), G ($36.24), IMG ($14.09),  & K ($17.31). Considering the price of gold, these companies should make a lot of money over the next few years. TCK.B ($35.01) has come off from recent 52 weeks highs.

Agriculture: Both AGU ($60.14) & POT ($105.92) have dropped considerably of late.

Banking: Still like NA ($56.51), RY ($52.28) & TD ($63.00). Great companies.

Dividend Paying Stocks: BA.UN paying 11.12%, BCE (6.33%), CPG.UN (7.29%), MBT (7.68%), SLF (4.61%), BPO.PR.L (6.59%), CWB.PR.A (6.74%). New on my radar are two Bombardier preferred shares BBD.PR.C (6.94%) & BBD.PR.D (7.08%).

Overall: Play it safe. If pessimism continues, continue to lighten up. When the mood of the market changes, be ready.

Have a great week ahead, Warren.

Canadian Large Cap Stock "Correction Opportunities"

The January Indicator Effect: Most often the overall performance of January will provide a strong correlation to the rest of the year. As of this weekend, the S&P 500 is below 2009 year end closing. Many experts recently predicted a 10% retracement. The market was also unnerved by comments from US President Obama on future banking sector regulation. Canadian financial stocks took a hit. Market corrections however, provide for opportunities to alter portfolios and accumulate premiere stocks for (near) bargain prices. Some of the opportunities worth watching include:

Precious Metal Sector: Agnico Eagle (AEM) @ $56.97 & Barrick (ABX) @ $38.66 are now closer to 52 week lows than highs. Considering the price of gold, it would appear that these stocks are undervalued. Goldcorp’s (G) price-to-earnings ratio is at 8.99, remarkably low for the sector. Franco Nevada (FNV) @ $27.46 and Iamgold (IMG) @ $15.39 both lost over 9% in market value this week. Keep an eye on Teck Comminco (TCK.B) @ $38.77.

Banking Sector: National (NA), Royal (RY) and TD all took substantial hits and are worth a look at accumulating. I had previously sold CIBC (CM) @ $66.72 (closed at $63.73) & National @ $60.00 (closed at $56.64) earlier in the month. Banks could suffer further short-term damage as news in the US unfolds.

Energy & Agriculture: With a $5 pullback in the price of oil, many energy giants retreated offering nice accumulation points. These include CNQ ($69.80), ECA ($34.15), NXY ($22.48), & TLM ($17.99). I had previously sold CNQ @ $75.82 & TLM @ $20.21, although subsequently repurchased them at $72.40 & $19.16. I’m willing to wait it out and accumulate more if prices continue to drop. Agrium (AGU) & Potash (POT) have held up well of late.

Recommendations: Lighten up unnecessary positions. Some preferred shares are still paying handsomely including BPO.PR.L (6.58%) & CWB.PR.A (6.75%).

Market could tumble further but that will provide for strong long term potential gains in great companies. Good luck this week, Warren.

Canadian Large Cap Stock Review for 2010

Previous Week’s (Jan. 10^th) Recommendations Included: Strong Buys on Weakness for Agrium (AGU) and Potash (POT). Agrium hit a 52 week high @ $73.40 before dropping to $63.91 (down 9.6% for the week). Potash hit $130.40 before closing @ $118.00 (down 8.06% for the week. Both are worth a close watch to take a partial position.

Strong Buys on Weakness for Teck (TCK.B), Encana (ECA) & Talisman (TLM). All 3 stocks hit 52 week highs this past week. Teck closed down 99 cents @ $40.80, Encana down 77 cents to $35.21 and Talisman down $1.54 (7.48%) to close @ $19.04. All three again are worth taking a partial position.

Strong Seasonal Buys included CNQ (down $2.98 to close @ $71.99), MFC & SLF. CNQ looks worth taking an immediate partial position.

A New Stock Recommended last Week was Labrador Iron Ore Units (LIF.UN) which moved up $3.32 and hit a 52 week high of $50.00 to close at $49.92.

Recommendations for the Week Ahead Include: In addition to the above, watch Nexen (NXY) & Suncor (SU) both of which came down a lot. The precious metal sector also looks inviting including Agnico Eagle (AEM) @ $58.50 along with Barrick (ABX), Goldcorp (G), and Kinross (K). CNR dropped 6.03% for the week which is a lot for this less volatile stock. Lastly the Banks are worth accumulating including CIBC (CM), National (NA), Royal (RY) and TD. Stocks could drop further but many are well priced for building positions. Keep an eye out for strong dips which could be good buying opportunities. Good luck ! Warren.

Canadian Large Cap Stock Recommendations for 2010

Previous Stock Pick Record: Of the 20 stocks recommended in last blog (Dec. 13), 17 were substantially, the 3 Banks selected for longer terms games were flat (RY,TD,NA).

Strong Buys on Weakness Included: Agrium (AGU) recommended Nov 22 ($61.13), Dec 6 ($60.98)and recommended on weakness Dec 13^th. It subsequently dropped to $60.24. This week it hit an all time of $72.41 to close @ $70.70. Potash (POT) recommended with same strategy and on same dates @ $122.79 & $122.98, subsequently dropped $112.00 only to rebound to $130.69, closing @ $128.35.

Strong Buys Dec. 13 on Seasonal Influences Included: CNQ ($68.87) topped @ $77.40, closed $74.97; ECA ($30.02) topped @ $36.28, closed $35.98; TLM ($18.10) topped $20.59, closed $20.58; NXY ($23.55) $25.91 & $25.06; SU ($36.29) $39.45 & $38.69. Lastly, TCK.B (Nov 13 $33.48), (Dec 13 $37.46) closed at 52 week high of $41.79. MFC increased from $18.25 to $21.12 closing at $20.58.

NEW RECOMMENDATIONS FOR 2010:

Strong Buys (on a little pullback): Agrium (AGU), Potash (POT), Teck Cominco (TCK.B), Encana (ECA) & Talisman (TLM);

Strong Buys: Canadian Natural Resources (CNQ), Manulife (MFC), & Sunlife (SLF);

Buys: Agnico Eagle (AEM), Barrick Gold (ABX), Goldcorp (G), Iamgold (IMG), Nexen (NXY), Suncor (SU) Bank Montreal (BMO),  & Toronto Dominion (TD);

Acumulate: National (NA), Royal (RY);

Accumulate for Dividends: Bell Canada (BCE), Bell Atlantic Units (BA.UN), Husky Energy (HSE), Power Financial (PWF),  & TSX Group (X).

Accumulate “Possibly” for dividends in smaller quantities: Arc Energy (AET.UN), Bonavista (BNP.UN), Crescent Point (CPG), Labrador Iron (LIF.UN), Pengrowth (PGF.UN), Penn West (PWT.UN) & Vermillion (VET.UN).

As noted in previous blogs, this is usually a strong season and January is usually a good indicator for the coming year’s future performance. Good luck & buy great companies on pullbacks. Warren