Defensive Large Cap Stock Picks for the Summer of 2010

 

While only 4 of 21 recommendations increased in price week over week, the overall portfolio lost 1.69% versus the TSX Composite -1.84%. Three of the top six picks hit new 52 week highs including: Canadian National Rail (CNR), Eldorado Gold (ELD) & Gildan Activewear (GIL). Three other recommendations hit new highs including: Canadian Pacific (CP), Rogers (RCI.B) & Telus (T).

Top Winners were: Telus (T) +2.75%, Barrick Gold (ABX) +2.28%, & Eldorado Gold (ELD) +1.98%.

Top Losers were: Lululemon (LLL) -5.87%, Canadian Pacific (CP)-5.06%, & Bank of Montreal (BMO) -3.79%.

This Blog has recommended Utmost Caution since April 18^th. Top Recommendations going forward include Precious Metals and Telecom. Top Individual Large Cap Canadian Stock Picks include: Barrick (ABX), Eldorado (ELD), Goldcorp (G), Iamgold (IMG), and watch Silver Wheaton (SLW) for any pullbacks.

Top Defensive Stock Recommendations include: BCE (5.56% dividend), Crescent Point Energy (CPG) 7.08%, Pengrowth Trust (PGF.UN) 8.23%, Rogers (RCI.B) 3.51%, Telus (T) 4.87%, TransCanada (TRP) 4.35%, & Yellow Pages Units (YLO.UN) 12.62%.

Stocks on Watch Lists depending on Market Conditions include: Financials: Bank of Montreal (BMO), CIBC (CM), National Bank (NA), Royal (RY) & TD. Energy: Canadian Natural Resources (CNQ), Nexen (NXY), Suncor (SU) & Talisman (TLM). Transport: CNR & CP. Consumer: Gildan (GIL) & Lululemon (LLL).

Keep an eye on Teck Resources (TCK.B) for a good indication on market direction. Remain defensive and wait for opportunities later on. Will be out of town for July 4^th so blog to return on the 11^th. Happy Canada Day.  

 

Canadian Large Cap Stock Recommendations for June 2010

 

28 of 30 Stocks Highlighted last blog (June 13) increased in price. The overall portfolio increased 2.6% versus the TSX Composite of 2.2%. 4 of the top 13 recommendations hit new 52 week highs including: Canadian National Railway (CNR), Eldorado Gold (ELD), Lululemon (LLL) and SXC Health (SXC).

Overall Top Performers included: Iamgold (IMG) +5.74%, Power Corp (POW) +5.72%, Power Financial (PWF) +5.58%, Telus (T) +5.38%, AGF.B +4.96%, Lululemon (LLL) +4.80%, and Eldorado Gold (ELD) +4.30%.

This past week I purchased: AGF.B @ $15.19 (close $15.03), Bombardier Preferred D (BBD.PR.D) @ $18.20 ($18.16), Gildan Activewear (GIL) @ $32.23 ($32.65), Lululemon (LLL) @ $42.61 ($45.17), Nexen (NXY) $22.84 ($22.59), and Talisman (TLM) $17.65 ($17.65).

Top Short-Term Momentum Recommendations include: Eldorado Gold (ELD), Iamgold (IMG), Bank of Montreal (BMO), Canadian National Rail (CNR), Lululemon (LLL), & Gildan Activewear (GIL).

2^nd Tier Recommendations include: Transport: Canadian Pacific (CP); Energy: Canadian Natural Resources (CNQ), Nexen (NXY), Suncor (SU), Talisman (TLM); Precious Metals: Agnico Eagle (AEM), Barrick Gold (ABX), Goldcorp (G); Financials: National Bank (NA), Royal Bank (RY), Toronto Dominion (TD);

Income: Telecom: BCE, Rogers (RCI.B), Telus (T); Trust Units: Pengrowth (PGF.UN), Yellow Pages (YLO.UN). Watch List:  Teck Resources (TCK.B).

Market could be a near a short term top so remain cautious. Happy Fathers Day and have a great week, Warren.  

Succeeding in Good or Bad Markets

While Stock Sentiment has improved this past week, overall caution is recommended for summer trading.

Below you’ll find a selection of stocks that have:

1. Outperformed the market since the correction
2. Provide strong and safe defensive dividend payouts
3. Will outperform during strong markets

Stocks that have outperformed the market since correction with dividends include:

• BCE +3.07%
• Canadian National Rail (CNR) -0.65%
• Canadian Pacific (CP) +0.13%
• Cenvous Energy (CVE) +2.05%
• Encana (ECA) +6.63%
• Lululemon (LLL) -1.26%
• Shaw Communications (SJR.B) +3.19%
• SXC Healthcare (SXC) +11.08%
• Telus (T) +0.65%
• Talisman (TLM) +1.56%

These would all be recommended as Buys.

Precious Metal Stocks have also outperformed since the correction, the top Large Cap selections and recommendations being:

• Eldorado Gold (ELD) +25.88%
• Goldcorp (G) +13.59%
• Iamgold (IMG) +11.84%

Defensive Stock Picks with High Dividend Payouts include:

• Bell Alliant (BA.UN) 11.41%
• Bank of Montreal (BMO) 4.58%
• Crescent Point Energy (CPG) 7.17%
• National Bank (NA) 4.33%
• Pengrowth (PGF.UN) 8.43%
• Riocan (REI.UN) 7.39%
• Transcanada (TRP) 4.44%
• Yellow Pages (YLO.UN) 13.06%

Defensive Stocks on Watch List: Based on recent weak performances, the following should be watched for accumulating on value:

• AGF Management (AGF.B) 7.26% dividend
• Great West Life (GWO) 5.00%
• Manulife (MFC) 3.15%
• Power Corp (POW) 4.48%
• Power Financial (PWF) 5.04%
• Royal Bank (RY) 3.77%
• Toronto Dominion (TD) 3.46%

Stocks to Outperform during Positive Markets include:

• Canadian Natural Resources (CNQ)
• Lululemon (LLL)
• SXC Healthcare (SXC)
• Teck (TCK.B)

Remain cautious, sell on strength and maintain substantial funds in cash. Have a great week ahead, Warren.

Defensivce Stock Picks

This blog has recommended caution since April 18. With the market gyrating wildly, it’s difficult for traders to capitalize successfully. Then don’t’. According to market guru Jim Cramer of CNBC’s Mad Money, sell on positive days. Year to date, the TSX Composite is down 1.5%. The key to beating the market in 2010 has been through higher dividend yielding stocks which compensate irrespective of performance. With the market down 12%+ since it’s high in late April, a review of Canadian Large Cap Stocks that have bucked the trend is of value.

Since April 23^rd, the following categories have Outperformed the Market Trend: Telecom &Precious Metals. Check out the performance of the following Large Cap Stocks since April 23:

• 
  
  Telecom:
• 
  
  Bell Canada (BCE) +2.47% (+5.52% annual dividend)
• 
  
  Rogers (RCI.B) +2.89% (+3.53% dividend)
• 
  
  Shaw (SJR.B) -1.08% (+ 4.58%)
• 
  
  Telus (T) + 3.19% (+5.07%)
• 
  
  Precious Metals:
• 
  
  Agnico eagle (AEM) -0.54%
• 
  
  Barrick (ABX) +8.77%
• 
  
  Goldcorp (G) +10.82%
• 
  
  Iamgold (IMG) +8.09%
• 
  
  Kinross (K) -1.76%
• 
  
  Yamana (YRI) +6.22%

Market outperformers since the correction also include:

• Canadian Pacific (CP) -2.26%
• Riocan Trust Units (REI.UN) -3.87% (+7.40% dividend)

Resource stocks that have outperformed include:  

• Encana (ECA) +6.40% (actually up 7.18% this week)
• Cenovus (CVE) -2.42% (2.91% dividend)
• and surprisingly Talisman (TLM) +1.03%
• One stock best suited only for volatile up days is Teck (TCK.B)

Preferred Shares analysis in brief:

• The big banks, BMO, BNS, RY & TD are yielding 5.7-5.8%, CIBC (CM) 5.9%,  National Bank (NA) 6.1%.
• Insurance / financial companies are yielding 6.1-6.2%. These include:
• Great West (GWO)
• Industrial Alliance (IAG)
• Power Corp (POW)
• Power Financial (PWF)
• Sunlife (SLF)

Corporates including: Brookfield Asset (BAM), Brookfield Properties (BPO) Weston (WN) are yielding more (6.2-6.9%).

New Stocks to add to the watch List: American web sites/publications Vector Vest and Investor’s Business Daily have repeatedly highlighted two particular Canadian Stocks that have greatly outpaced the market year to date and bear worth watching, particularly for their performance on up days in the market. These two stocks are Lululemon (LLL) -1.95% since correction and SXC Health (SXC) +10.74% since. The period June-August are not renowned for their positive market performance. Stay cautious and wait it out. Good luck, Warren.