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:

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  Telecom:
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  Bell Canada (BCE) +2.47% (+5.52% annual dividend)
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  Rogers (RCI.B) +2.89% (+3.53% dividend)
• 
  
  Shaw (SJR.B) -1.08% (+ 4.58%)
• 
  
  Telus (T) + 3.19% (+5.07%)
• 
  
  Precious Metals:
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  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.