Wait for Stock Market Pullback

Last week’s primary recommendation was to wait for a market pullback. In all told, only 7 income/dividend stocks were recommended for any accumulation including 3 banks (Bank of Montreal, CIBC & Royal), 3 telecoms (BCE, Rogers & Telus) and 1 pipeline (Transcanada). The overall gain for these stocks was a small 0.06% although positive when compared to the TSX Composite loss of -0.49%. One stock which was highlighted to watch carefully: Labrador Iron Ore Units (LIF.UN) increased by 4.65% and hit a new 52 week high. The stock has also hit new 52 week highs 6 of the last 7 weeks. This warrants further attention to buy on dips.

The market appears to be headed lower still before climbing back. As such I’ll recommend readers to continue with caution. My personal margin and RSP portfolios are currently over 90% in cash as I wait for opportunities. I can and do move in and out quite rapidly. This past week I purchased and sold for profit Research in Motion (RIM) on 7 occasions. It’s a good trading stock with lots of intraday movement.

Income stocks with potential to accumulate on weakness include: BCE, Bank of Montreal (BMO), CIBC (CM), Rogers (RCI.B), Royal Bank (RY), Telus (T), Toronto Dominion (TD), & Transcanada (TRP) – the same as recommended previously with the addition of TD. I also like Brookfield Properties (BPO) which has both a low PE ratio and reasonable dividend payout.

Long Term Growth Stock recommendations include: As recommended previously, Agrium (AGU), Canadian Natural Resources (CNQ), Potash (POT), RIM & Teck (TCK.B). There’s no rush to jump into the market but be open to wild price movements to capitalize on opportunities.

 

 

Large Cap Stocks: Next Market Direction ?

14 of 17 stocks recommended last week increased in price for an average gain of 1.82% versus the TSX Composite gain of 1.62%. Top income recommendations did very well including Bank of Montreal (BMO)+3.62%, CIBC (CM) +5.23% & Royal Bank (RY) +4.34%. Other income stocks recommended for accumulating positions included BCE +4.00%, Toronto Dominion (TD) +2.66% and newly added more speculative stock AGF Management (AGF.B) +3.83%.  Growth stocks of note included Canadian Natural Resources (CNQ) +1.84%, Talisman (TLM) +3.06% & Teck Resources (TCK.B) +2.66%. The market closed at highs for the week so maybe wait for a small pullback before getting into new trading positions.

At current prices I’ll make a few longer term recommendations including growth stocks: Agrium (AGU), Potash (POT), Research in Motion (RIM), Teck  (TCK.B), Canadian Natural (CNQ), Nexen (NXY) and Talisman (TLM). While gold has come down a little of late, stocks worth watching for upwards movement include Agnico Eagle (AEM) & Kinross (K). Labrador Iron Ore Units (LIF.UN) has been very hot of late and merits a closer look.

Income stocks still poised for some growth include the major banks (as listed above) and telecom giants BCE, Rogers (RCI.B) & Telus (T). Transcanada (TRP) dipped 2.3% this past week and is a stalwart in any portfolio. A few opportunities still exist in higher paying corporate preferred shares including Bombardier (BBD.PR.C & D) Brookfield Properties (BPO.PR.L) & Canadian Western Bank (CWB.PR.A).

15 of the 22 stocks recommended early January 2010 to be purchased for the year ahead have increased an average 10.6% year to date (exactly the same as the TSX Composite) but the added bonus is that the recommended portfolio has also delivered over 4% in income. Wait for your moment.

 

Canadian Large Cap Stocks: Volatility Ahead ?

While only 5 of the 13 stocks recommended last week increased in price, the overall portfolio decreased 0.6% versus the TSX Composite loss of 1.36%. Top winners were Research in Motion (RIM) +7.64% and Nexen (NXY) +2.39%. Top losers were Agrium (AGU) -4.54% and Royal Bank (RY) -4.14%. If you take the time to read back in time through this blog, you’ll discover that for the most part, the recommendations beat the TSX Composite almost every week.

The losses of this past week should offer opportunities to accumulate particularly the high dividend paying financial stocks. These include: Bank of Montreal (BMO) down 4.01% this week (4.81% dividend), CIBC (CM) -4.24% (4.63% dividend) & Royal Bank (RY) -4.14% (3.77% dividend).

Other income stocks worth accumulating include: BCE (5.55% dividend), Rogers (RCI.B) 3.50%, & Transcanada (TRP) 4.35%.

New recommendations added to a watch list only (i.e. more speculative) include: AGF Management (AGF.B) -4.54% this week (6.43% dividend), Brookfield Properties (BPO) -5.05% (3.18%) & Riocan Reit (REI.UN) -3.98% (6.28%). Toronto Dominion (TD) is always a solid income stock worth accumulating.

Immediate growth opportunities to purchase on weakness include: Agrium (AGU), Potash (POT) & Research in Motion (RIM). As in recent weeks, these stocks are recommended as long term buys only. RIM has been very hot of late increasing over 19% in the past three weeks. I traded the stock ten times in the past three weeks. Hot stocks recommended for purchasing on weakness also include: Canadian Natural Resources (CNQ) & Teck (TCK.B). Both hit new 52 week highs this past week and are due for a little pullback before surging forward. Lastly, both Nexen (NXY) & Talisman (TLM) have been showing strength in the past weeks and should be watched for any opportunities on weakness. Looks like a volatile week ahead. Be patient to take advantage of long term opportunities but play it safe. Good luck.

Canadian Large Cap Stocks: Recap of the Past 6 Weeks

Seven Stocks have been recommended every week over the past six weeks (since Sep. 26).  3 of the 5 high dividend paying stocks recommended to accumulate on weakness have increased including Telus (T), Royal Bank (RY) & TD. BCE, the one dividend accumulate stock is near the same price while Rogers (RCI.B) lost 6.67%. The two growth stocks recommended have both increased substantially including Canadian Natural Resources (CNQ) +16.21% & Nexen (NXY) +9.13%.

Four Stocks have been recommended five times over the past six weeks. Bank of Montreal (BMO) the one dividend paying stock to accumulate rose in price while two of the three growth stocks increased markedly. These include Talisman (TLM) +18.29% & Teck Resources (TCK.B) +23.20%. Potash (POT), the one loser, was re-categorized as a speculative long term buy on October 24^th owing to the unknown outcome of the hostile takeover by BHP. However, I did predict that the takeover would not go through.

Three Stocks have been recommended four times over the past six weeks. One being Agrium (AGU) recommended at $76.50 and removed from recommendation list when it hit $90.22. The stock closed this week at $85.21. Suncor (SU) increased 11.05%. The third stock Research in Motion (RIM), was recommended at $49.98 and has increased 11.34%. While it has traded much higher of late ($58.66 versus closing price of $55.65) the stock was re-categorized as a long term buy after the sharp run up at the close of October.

Recommendations going forward include: Income: The same five stocks as listed above: BCE, RCI.B, T, RY & TD. Growth: The same five stocks as listed above (try to buy on weakness): CNQ, NXY, SU, TLM & TCK.B. Speculative Long Term Growth: The same as above including AGU, POT & RIM. November and December are traditionally strong months for the market. While many stocks have moved close to their 52 week highs, certain opportunities are unfolding with the improved investor mood now that US elections are out of the way. Have a great week ahead.