Market Fundamentals Improving ?

 

15 of 17 stocks recommended last blog (2 weeks ago) increased in price for an average 3.80% gain. Top gainers included Teck Resources (TCK.B) +12.20%, Potash (POT) +9.56%, Agrium (AGU) +8.28%, Silver Wheaton (SLW) +8.27%. The one substantial loser was Lundin (LUN) -16.36% on news Thursday.

8 of 9 additional “hot stocks” noted increased with 4 hitting new all time highs including Canadian National Rail (CNR), National Bank (NA), BCE & Telus (T).

CNBC’s Fast Money recommended watching precious metal and energy stocks for gains in the near future.

Top Stocks to Watch in these categories include: Precious Metals: Agnico Eagle (AEM) , Goldcorp (G), Silver Wheaton (SLW) & Top Pick Barrick Gold (ABX).

Energy: Both Top Picks: Canadian Natural Resources (CNQ) & Suncor (SU). Agriculture: Both Top Picks: Agrium (AGU) & Potash (POT). Watch Teck (TCK.B).

New Value Selections: based on recent weakness (for longer term appreciation) CIBC (CM), Royal Bank (RY) & Lundin (LUN).

Speculative Picks: Research in Motion (RIM) & Yellow Media (YLO). Note that Yellow Media’s Preferred Shares are now delivering VERY HIGH income (assuming they can maintain payouts): YLO.PR.B 7.62%, YLO.PR.C 9.48%, YLO.PR.D 9.23%.

Other Picks include: Income: Crescent Point Energy (CPG), Pengrowth (PGF) & Preferred’s: BBD.PR.C 6.409%, BPO.PR.L 6.358%, CWB.PR.A 6.663%.

Positive Momentum Stocks include: (buy on dips) BCE, Telus (T), Canadian natural Rail (CNR), TransCanada Pipe (TRP). Could be a start of improving market fundamentals. Keep a close watch on above noted stocks for direction. Good luck.

Struggling through Market Weakness

As predicted, the month of May is generally cruel to investors. With the TSX down over 4% over the past two weeks, that puts the overall market’s performance in the negative column for the year 2011. This could be a sign to slowly pick up some great companies at lower costs. It also shows which companies have survived the turmoil intact.

Strong Performers in May have included: Canadian National Railway (CNR), Crescent Point Energy (CPG) which also pays a 6.19% annual dividend distributed monthly, Encana (ECA), Grande Cache Coal (GCE), National Bank (NA), Pengrowth (PGF), Penn West (PWT), plus all the high dividend paying telecoms, particularly BCE & Telus (T.A), both of which hit 52 week highs.

Conservative picks still available include: Preferred Shares: BBD.PR.C (6.47%), BPO.PR.L (6.345), CWB.PR.A (6.59%), BPO.PR.N (5.93%), LB.PR.D (5.92&) & NA.PR.O (5.95%). In the fixed income category, Bell Alliant offers some 5-8 year out corporates paying between 3.52% - 4.80%. In the 8-10 year out category, paying between 4.8% - 4.98% are Shaw, Transalta, Brookfield, Enbridge Income & Rogers.

Great Companies Moving Forward: many great stocks have been hit hard of late and their current price could offer considerable upside if held for the next 6-10 months. Divided into their respective categories, these include:

Energy: Canadian Natural Resources (CNQ), Suncor (SU) & Talisman (TLM). Precious Metals: Agnico Eagle (AEM), Barrick Gold (ABX), Goldcorp (G), & Silver Wheaton (SLW). Metals: Hudbay Minerals (HBM), Labrador Iron Ore Units (LIF.UN), Lundin Mining (LUN), Teck Resources (TCK.B), & Thompson Creek Metals (TCM). Agriculture: Both Agrium (AGU) & Potash (POT) have pulled back severely of late and should be much stronger by next year.

Other Opportunities: Canadian Pacific (CP), Research in Motion (RIM), Rogers Communications (RCI.B), Sunlife (SLF).

Keep a cool head under fire ! There are several opportunities unfolding for long term gains. Good luck.

 

 

New Stock Opportunities

Events of the past week including some dramatic pullbacks provide mid-long term opportunities worth considering.

These include the following: Barrick Gold’s (ABX) bid to purchase copper producer Equinox Minerals (EQN) resulted in the stock suffering an 8.95% drop this past week. The stock, along with Goldcorp (G), had previously shown remarkable strength, and the pullback should be viewed as an opportunity to acquire a major precious metals’ producer.

Research in Motion (RIM) delivered its “usual” disappointing results & guidance and was handed a 10.14% weekly thrashing. While the company has disappointed over the past months, the current price should be viewed as a signal to buy on weakness. While a more speculative choice, the stock should provide for excellent returns if held until the next software/electronic peak stock appreciation period of December-January.

Mid Term Stock Selections include: Agriculture: Agrium (AGU) & Potash (POT). Mining: Grand Cache Coal (GCE), Labrador Iron Ore Units (LIF.UN), Silver Wheaton (SLW) & Teck Resources (TCK.B). Financials: Based on recent pullback, check out TD Bank (TD). I also like National Bank (NA) & Sunlife (SLF). For income: Crescent Point Energy (CPG), Rogers (RCI.B) and other telecoms BCE & Telus (T). A more speculative income selection is Yellow Media (YLO) which has been hovering near 52 week lows of late.

The above selections are all noted as being mid-term recommendations. The market appears to be in the usual soft spring season and caution should be exhibited with all moves. No need to take a full position yet. I did however, purchase both Barrick (ABX) & Research in Motion (RIM ) late this past week on the pullbacks. Good luck.