Candian large Cap Stocks: The Week Ahead

6 of the 10 Stocks recommended as buys or accumulates increased in price since last week for an average gain of +1.5% versus the TSX Composite +0.6%. Top gainer was Research in Motion (RIM) +15.42%. Top loser was Rogers (RCI.B) -9.37%. Going forward the market appears stuck with many stocks hitting or near their 52 week highs. The results of the US elections will probably have the greatest impact on the market this coming week. A strong Republican showing will push stocks higher. A stronger than expected Democratic showing will pull stocks down.  Impossible to predict which way the vote will go.

Energy and telecom stocks appear to be in correction mode. This could open up for opportunities to accumulate based upon weakness.

Stocks to accumulate on weakness include: BCE, Rogers (RCI.B), Telus (T) all paying large and reasonably safe dividends paying stock holders while waiting for price appreciation. Following the setback this past week, I recommend particularly watching Rogers for any opportunity. Canadian National Rail (CNR) which hit a new 52 week high lost 4.07% this past week owing to weakness in the resource sector and should be watched for any pullbacks to accumulate.  Canadian Pacific (CP) should be put on the radar screen too.

Long term buys include: Potash (POT) & Research in Motion (RIM). It appears that the Potash sale to BHP Billiton will not go through and this could hurt the stock price which should offer an opportunity to pick it up much cheaper than now. Categorize it as a speculative long term buy.

Long term accumulates on weakness include: Canadian Natural Resources (CNQ), Nexen (NXY), Royal Bank (RY) & Toronto Dominion (TD). This past Friday evening a CNBC Fast Money commentator listed TD as a top pick going forward.

Income recommendations include: Preferred shares still paying high dividends are as follows: Bombardier BBD.PR.C 6.5984%, BBD.PR.D 6.548%; Brookfield Properties BPO.PR.L 6.3155% BPO.PR.N 5.8931%; Canadian Western Bank CWB.PR.A 6.5081%; Investors Group IGM.PR.B 5.8906%; Laurentian Bank LB.PR.D 5.9148%; Manulife MFC.PR.D 5.8929%; National Bank NA.PR.O 5.9331%, NA.PR.P 5.9055%; Power Financial PWF.PR.I 5.877%. It could be a momentous week ahead. Keep a close watch for large price moves and new opportunities. Good luck.  

 

Canadian Large Cap Stocks: Stay Conservative

 

9 of the 10 (income) stocks recommended last week increased in price for an average gain of 1.2% as compared to the TSX Composite loss of 0.1%. Top gainer was Rogers (RCI.B) @ +2.89%. Two stocks hit new 52 week highs including Rogers and BCE. 6 of the 8 stocks recommended to purchase only on weakness dipped below their closing price of last week but only two bounced back. These are Research in Motion (RIM) and Talisman (TLM).

Going forward I still recommend holding and/or closing positions as many stocks are near or have crossed their 52 week high mark.

Hot Stocks include: Some performances over the past 4 weeks worth noting are: Agrium (AGU) +12.6%, Canadian Pacific (CP) +9.25%, Nexen (NXY) +11.9% & Talisman (TLM) +9.4%. These stocks should be watched closely for any pullback opportunities. The major banks surged early in the week only to settle back by Friday. These should also be watched for pullback opportunities including Bank of Montreal (BMO), CIBC (CM), National Bank (NA), Royal Bank (RY) and Toronto Dominion (TD). Bank of Montreal and Royal Bank have been the weakest performers and would merit the highest rating of accumulate on weakness. The telecoms should be accumulated for their high dividend payouts including BCE, Rogers (RCI.B) & Telus (T).

Long Term Buys: Encana (ECA) dropped 7.59% this week and is near a 52 week low. It also pays a (reasonably safe) 2.98% annual dividend. Sister firm Cenovus (CVE) also dropped 3.8% this week and pays a 2.76% dividend. Research in Motion (RIM) should increase substantially by next year.

Resource Stocks could be in for a correction shortly however, for the long term keep a close watch on Canadian Natural Resources (CNQ), Kinross (K) & Teck Resources (TCK.B), all of which should be accumulated on weakness.

Speculative Buy: Potash (POT). Depending on the “political” outcome of a possible sale or not. Have a great week ahead and remain conservative.

Canadian Large Cap Stocks: Hold Recommendation

With many stocks at or near 52 week highs, I’ll recommend that you hold and not purchase too many stocks unless market weakens. While only 7 of the 14 stocks recommended last week increased in price, the average portfolio gain was 1.06% versus the TSX Composite of 0.59%. Top gainers included Agrium (AGU) +7.34%, Nexen (NXY) +4.62%, Teck (TCK.B) +2.22% & Bank of Montreal (BMO) +2.04%. Top loser was Research in Motion (RIM) -1.52. 4 of 14 recommendations hit new 52 week highs including Agrium (AGU), BCE, Rogers (RCI.B) & Telus (T). As predicted the market did not move too much.

Bond Recommendations include: Instead of holding cash consider Riocan Reit corporate bonds due June 2012 yielding 2.41%. Other high yielding corporate bonds include: Consumer Waterheater April 2014 yielding 4.57% & Yellow Pages Feb 2016 @ 5.01%.

Income Recommendations include: BCE (5.38% dividend), BMO (4.63%), Crescent Point Energy (CPG) 6.90%, Rogers (RCI.B) 3.21%, Royal Bank (RY) 3.60%, Riocan Reit (REI.UN) 6.17%, Telus (T) 4.32%, TSX (X) 4.83%, Toronto Dominion (TD) 3.29%, & Vermillion (VET) 5.76%.

Growth Stock Recommendations on weakness include: Canadian Natural Resources (CNQ), Nexen (NXY), Suncor (SU), Talisman (TLM), Kinross (K), Potash (POT), Research in Motion (RIM) & Teck (TCK.B). I recommend holding and not increasing Agrium (AGU) Canadian National (CNR) & Canadian Pacific (CP).

Nothing wrong with taking some profits and preparing for another upleg later this year. Good luck.

Canadian Large Cap Stocks: Purchase on Weakness

 

11 of the 12 Buy Recommendations from last weeks’ blog increased in price for an average gain of 2.56% while the TSX Composite gained 1.4%.

Top gainers included Agrium (AGU) +7.35% and a new 52 week high, Canadian Pacific (CP) +4.66%, Nexen (NXY) +3.88%, Teck (TCK.B) +3.83, Suncor (SU) +3.27% & Canadaian Natural Resources (CNQ) +3.26%. Only loser was Cenovus (CVE) -1.68%.

6 of the 8 recommendations to accumulate also increased in price. Top gainers were Rogers (RCI.B) +4.36% & Telus (T) +2.92% both hitting new 52 week highs. Top losers were Manulife (MFC) -2.74% & Industrial Alliance (IAG) -1.60%.

Going forward note that a  number of stocks have come close to their 52 week highs therefore are recommended as strict buys only on weakness. Included in this category are Agrium (AGU) , Canadian Natural (CNQ) & Teck (TCK.B).

Recommendations for the week going forward only include: Nexen  (NXY), Potash (POT), Research in Motion (RIM), Suncor (SU) & Talisman (TLM). Stocks to be highlighted for accumulating consist of telecoms and financials. These include: BCE, Rogers (RCI.B) & Telus (T), Bank of Montreal (BMO), Royal Bank (RY) and Toronto Dominion (TD). I’ve removed Manulife (MFC), Power Financial  (PWF) & Sunlife (SLF) owing to ongoing weak performance.   

Income recommendations include Canadian Western Bank Preferred Shares (CWB.PR.A) paying 6.42% annually and Yellow Pages Corporate Bonds due March 2020 paying over 6.6% annually if held to maturity. Stocks may have hit a temporary top so buy on weakness. Good luck & happy Thanksgiving.

Stock Opportunities Unfolding ?

14 of the 21 stocks recommended last blog increased in price for an average 2.2% versus the TSX Composite gain of 1.3%.

• Top gainers included Canadian Natural Resources (CNQ) +8.47%, Teck Resources (TCK.B) + 7.43%, Encana (ECA) +5.58%, Talisman (TLM) +5.52% & Suncor (SU) +5.41%.
• Top losers were Manulife (MFC) -2.97%, BCE -2.25% & Sunlife (SLF) -1.64%. Energy stocks had a big week with many trust units hitting new 52 week highs including Bonavista (BNP.UN), Baytex (BTE.UN) & Enerplus (ERF.UN).

The axis of the market appears to have evolved into autumn trading with resources taking over market leadership from safer financials & telecom. For my personal accounts I traded Research in Motion (RIM) 4 times purchasing and selling it at the following: $48.21-49.99, $48.23-49.98 $48.63-50.67, & $49.58-50.91. Stock closed at $51.20 and remains a top trading recommendation. Autumn is usually a strong season for technology and RIM should do well into the new year. For safety and income I purchased in an RSP account YPG Holding March 2020 corporate bond yielding if held to maturity 6.78%.

Top recommendations on weakness for the week ahead include: Agrium (AGU) & Potash (POT). Also watch Canadian National Rail (CNR) & Canadian Pacific (CP). Energy and overall resource stocks should keep surging forward but try to purchase only on pullbacks. Recommendations include all top gainers noted above plus Cenovus (CVE), Nexen (NXY) & Canadian Oil Sands (COS.UN). For safety and higher dividends, accumulate financials and telecom including Bank of Montreal (BMO), Royal (RY), TD, Industrial Alliance (IAG), Manulife (MFC) & Sunlife (SLF), BCE, Rogers (RCI.B) & Telus (T). Watch the market closely as it could be a strong week for both accumulation and trading in and out of positions. Best of luck.