The Worst May Since 1940

27 of 35 Canadian Large Cap Stocks recommended last blog (May 24) increased in price. Overall portfolio increased 1.91% versus the TSX composite +1.3% and TSX unweighted +2.7%.

Top Gainers included:

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  Teck (TCK.B) +6.07%
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  Canadian Oil Sands Trust (COS.UN) +5.57%
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  Canadian Natural Resources (CNQ) +5.53%
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  Baytex Energy Trust (BTE.UN) +5.13%
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  Cenovus Energy (CVE) +5.04%
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  Goldcorp (G) +4.47%
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  Kinross (K) +4.13%

Overall market indicator Manulife (MFC) increased 4.89%.  Top loser was Royal Bank (RY) down 6.88%.  It was the worst month of May for the Dow Jones Industrial Average (-7.9%) since 1940 when western Europe fell to Nazi Germany.  With the market see-sawing back and forth, I recommend utmost caution.

Top Value recommendations include:

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  Bank of Nova Scotia (BNS) – 8.23% (over the past 2 weeks)
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  Royal Bank (RY) -9.23%
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  Agrium (AGU) -3.18%

Top Defensive Stock recommendations include:

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  Bell Alliant Units (BA.UN) paying a 11.26% dividend
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  Bell (BCE) 5.67%
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  Cineplex Galaxy Units (CGX.UN) 6.36%
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  Crescent Point Energy (CPG) 7.08%
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  Telus (T) 5.20%, TransCanada (TRP) 4.58% 
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  Yellow Pages Units (YLO.UN) 12.79%

Market Watch List:

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  Financials:
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  Bank of Montreal (BMO)
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  Manulife (MFC)
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  National Bank (NA)
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  Power Financial (PWF)
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  Sunlife (SLF)
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  Toronto Dominion (TD)
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  Mining:
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  Agnico Eagle (AEM)
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  Barrick (ABX)
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  Goldcorp (G)
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  Kinross (K)
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  Potash (POT)
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  Teck (TCK.B)
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  Energy:
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  Canadian Natural Resources (CNQ)
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  Encana (ECA)
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  Nexen (NXY)
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  Suncor (SU)
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  Talisman (TLM)

Certain stocks might be worth taking small positions (example top value recommendations) but overall caution should be observed. Watch market sentiment closely.  Have a great week ahead, Warren.

Defensive Large Cap Stock Recommendations

Large Cap Stock Recommendations of last blog (May16) performed slightly better than the overall market, -3.84% versus the TSX Composite -4.1% and the TSX unweighted -6.1%. My recommendations are always unweighted.

Top Gainers included: Nexen (NXY) +4.68%, Cenovus (CVE) -0.44% & Royal Bank (RY) -0.83%. Precious Metal Stock picks dragged down the portfolio. Crude Oil is down 18.7% in May. TSX and S&P crossed below crucial 200 day moving averages as the week neared its end. This would be a negative technical indicator. Of interest, market guru Jim Cramer of CNBC’s Mad Money highlighted Bank of Montreal (BMO) as a top pick on Monday May 17. Most market experts recommend purchasing or holding higher dividend yielding large cap stocks to weather the storm.

My top defensive holding recommendations are as follows:

• Telecom: BCE (5.61% dividend), Rogers (RCI.B) 3.56% & Telus (T) 5.24%.
• Income Trusts: Bell Alliant (BA.UN) 11.02%, Cineplex Galaxy (CGX.UN) 6.22%, Riocan (REI.UN) 7.44%, & Yellow Pages (YLO.UN) 12.73%.
• Resources: Crescent Point Energy (CPG) 7.04% & TransCanada (TRP) 4.62%.

Assuming a market upturn, the following large cap stocks on a watch list would be recommended:

• Financials: BMO, National Bank (NA), Power Financial (PWF), RY & TD.
• Mining: Agrium (AGU), Potash (POT) & Teck (TCK.B).
• Energy: Canadian Natural Resources (CNQ), Cenovus, Encana (ECA), Nexen, Suncor (SU), & Talisman (TLM).
• Energy Trusts: Arc (AET.UN), Bonavista (BNP.UN), Baytex (BTE.UN), Canadian Oil Sands (COS.UN), Pengrowth (PGF.UN), Penn West (PWT.UN), & Vermillion (VET.UN).
• Precious Metals: Agnico Eagle (AEM0, Barrick (ABX), Goldcorp (G), & Kinross (K). Two stocks to watch based upon market direction are Manulife (MFC) and Sunlife (SLF), both of which are highly levered to the market. Continued caution is the watchword for the weeks ahead.

Good luck, Warren.

Canadian Large Cap Stock Pick Update

13 of 14 Canadian Large Cap Stocks recommended last blog (May 9) increased in price. Average gain for the portfolio was 2.87% versus the TSX Composite gain of +2.76%.

Top Gainers included:

• Kinross (K) +8.06%
• Goldcorp (G) +5.86%
• Yellow Pages (YLO.UN) +5.26%
• BCE +4.59%
• Cineplex Galaxy (CGX.UN) +3.85%.

14 of 21 Stocks on Watch List increased in price for an average gain of 1.54%.

Top gainers included:

• Penn West (PWT.UN) +8.67%
• Talisman (TLM) +7.92%
• Vermillion (VET.UN) +6.13%
• Encana (ECA) +4.72%
• Arc Energy (AET.UN) +4.64%

I recently purchased:

• Crescent Point Energy (CPG) @ $40.81 (closed $40.14)
• Yellow Pages (YLO.UN) @ $6.18 (closed $6.60)
• Teck (TCK.B) @ $35.01 and sold @ $36.23 (closed $35.34).

Stock recommendations going forward include:

• Precious Metals: Agnico Eagle (AEM), Barrick (ABX), Goldcorp (G), & Kinross (K).
• Agriculture: Agrium (AGU) & Potash (POT).
• Financials: Bank of Montreal (BMO), National Bank (NA), Royal Bank (RY), Sunlife (SLF), & Toronto Dominion (TD).
• Income Stocks: BCE, Telus (T), TransCanada (TRP), TSX (X), & Yellow Pages (YLO.UN).

• Watch List Includes the following Energy Stocks: Canadian Natural Resources (CNQ), Cenovus (CVE), Crescent Point (CPG), Encana (ECA), Nexen (NXY, Suncor (SU), & Talisman (TLM).
• Energy Trust Units on Watch List include: Arc (AET.UN), Bonavista (BNP.UN), Canadian Oil Sands (COS.UN), Pengrowth (PGF.UN), Penn West (PWT.UN), and Vermillion (VET.UN).
• Be Cautious on: Manitoba Tel (MBT). Latest earnings now represent half of dividend payout and this would lead one to expect a substantial dividend cut.

Be prudent, market could go either way this week. Good luck, Warren.

Stock Market Caution Ahead

Many Market Experts have recently predicted a probable 10%+ downturn in the North American Exchanges. That would mean we’re only about half way there. As mentioned in the last few blogs, one should remain cautious and only buy on dips. Most of the recent recommendations of this blog have been for intermediate and not short term gains. With the European debt crisis increasing in volume, one must pay attention to the warning signs. This however, does not deny the fact that Canadian Large Cap Stocks are looking more inviting.

Stocks recommended last blog (May 2) performed similar to the TSX Composite, down -4.29% vs -4.24%. Best performers included Telus (T) +3.01%, Agnico Eagle (AEM) +1.71% & Goldcorp (G) +1.41%. 23 of the 24 stocks selected were at some point higher than their previous Friday close.

Stock Recommendations going forward include:

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  Precious Metals: Agnico Eagle, Goldcorp & Kinross (K).
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  Telecom: BCE, Bell Alliant (BA.UN), Rogers (RCI.B) & Telus. Financials: Bank of Montreal (BMO) & National Bank (NA).
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  Income: Crescent Point Energy (CPG), Cineplex Galaxy (CGX.UN), Ricoan (REI.UN), TransCanada (TRP) & Yellow Pages (YLO.UN).
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  Energy Stocks have come down hard this past week but are certainly worth watching for purchase on any further substantial drops. These include: Canadian Natural Resources (CNQ), Cenovus (CVE), Encana (ECA), Husky (HSE), Nexen (NXY), Suncor (SU) & Talisman (TLM).
• 
  
  Energy trust units also worth watching include: Arc (AET.UN), Bonavista (BNP.UN), Baytex (BTE.UN), Canadian Oil Sands (COS.UN), Pengrowth (PGF.UN) Penn West (PWT.UN), & Vermillion (VET.UN).
• 
  
  Financials worth watching include: Power Financial (PWF), Royal Bank (RY), Sunlife (SLF), TSX (X) & TD.  Lastly are mining stocks Agrium (AGU), Potash (POT) & Teck (TCK.B).

Lighten up, opportunities will unfold. Good luck, Warren.

Stock Recommendations Going Forward

It was a negative week past for the markets. Only 8 of 17 growth stock picks of last blog (April 24) increased in price and only 1 of 7 long term income stocks increased week over week. However, the overall portfolio was only down 0.007% versus the TSX Composite down 1.27%.

Big Gainers included: Agnico Eagle (AEM) +4.78%, Encana (ECA) +2.85%, Goldcorp (G) +8.74%, Kinross (K) +6.71%, Potash (POT) +2.12%, and Rogers Communications (RCI.B) +2.67%. Big Losers included: Athatbaska Oil Sands (ATH) -4.28%, Power financial (PWF) -2.75%, Sunlife (SLF) -4.87%, Teck Cominco (TCK.B) -8.80%, TransCanada Corp (TRP) -4.52%, and Viterra (VT) -2.93%.

Depending on Greek bailout results, gold could go substantially higher or lower in the short term. Kinross was highly recommended on CNBC’s influential show Fast Money on Friday and there was generally lots of discussion during the week of Agnico, Barrick (ABX) and Goldcorp. I recommend watching these precious metal stocks for opportunities to get in or out depending on outcome of European news.

Growth Stocks recommended on positive momentum include: Agrium (AGU), Canadian Natural resources (CNQ), Encana (ECA), Potash (POT), Suncor (SU), and Talisman (TLM). Growth Stocks recommended owing to recent weakness include: Nexen (NXY) -7.84% this past week and Teck Cominco (TCK.B) I purchased Teck @ $41.17, $41.00 & $40.04 (average $40.73) this past week. It closed at $39.92. I rate both strong mid-term buys.

Income Stocks recommended on strength include: Brookfield Properties (BPO), Cineplex Galaxy (CGX.UN), Riocan (REI.UN) & Rogers (RCI.B) & Telus (T).  Income Stocks recommended on weakness include: Husky (HSE) -5.43% this past week, Sunlife (SLF) & TransCanada Corp (TRP). Great week, Warren.