The US equity market reached a four-week high led by strong earnings. Brexit talks are advancing, and the markets have welcomed the progress. Interest rates that are low also have helped buoy the market.
This week, we see a continued trend from last week where income stocks are hitting highs. Dividend paying stocks like Canadian Utilities (CU-T), Canadian Apartment Properties (CAR.UN-T) and Killam Properties Inc (KMP.UN-T) are at their high. We see a trend of strong performance by REITs and Utilities. Regional banks such as Canadian Western Bank (CWB-T) and National Bank of Canada (NA-T) are also at their high. Constellation Software Inc. (CSU-T) also continues to perform well.
On the other end, tech stock BlackBerry (BB-T) as well as a slew of energy stocks are down at their 52-week low. Crew Energy Inc. (CR-T) and Tourmaline Oil Corp (TOU-T) are among those at their low. The big cannabis companies: Canopy Growth Corp. (WEED-T), Aurora Cannabis (ACB-T), and Canntrust Holdings Inc. (TRST-T) are all still at their 52-week low this week.
Here’s this week’s 52-week high and low list:
Here’s this week’s 52-week high stocks on Stockchase…
This is effectively a utility and benefited tremendously from the safety trade with bonds coming down from 4.5% to 1.5% 5 years ago. Stock recently dropped because of a rebalancing of portfolios. Expects we will only see higher interest rates for many years and this does not speak well for this company.
Brookfield Renewable Energy (BEP.UN-T) TSE
It's fallen so far that the dividend is 7%. BEP works well for older investors who want that dividend, but don't expect big stock growth. It's a blue-chip stock in Brookfield. There's a little growth in their pipeline. With this serious pullback, there's no problem adding to your position to capture that higher dividend. This…
Capital Power (CPX-T) TSE
The risk-off environment has benefited the utilities. He sees a sluggish growth environment for 2018/19. Their balance sheet is very good. It has a 7% dividend which is safe. It is a 46% stable payout ratio. He forecasts 6% earnings per share growth. Sell a put and get a premium. Then own it and get…
Canadian Utilities (CU-T) TSE
It is one of the stocks he owns across his client base. They are trading at a slight discount. The government in the prairies is funding clean energy that benefits CU-T. It is suffering the Alberta oil price.
Hydro One (H-T) TSE
Don't touch it with a ten foot pole. It is a mix of public and private ownership. There is a lot of debt. Revenue is controlled by the government. This one is too political for him to get into.
Innergex Renewable Energy (INE-T) TSE
(A Top Pick Sept 28/11. Up 22.45%.) Getting close to being fully valued and he is starting to Sell it. Has had phenomenal growth and is very conservatively managed. Doesn’t see much upside so is basically holding it for its yield.
Northland Power Inc (NPI-T) TSE
He really likes them. It has a really nice dividend. They own some natural gas so it is like co-generation. If you want 100% renewables, then this would not fit the bill. But if you want companies going in the right direction, then this is one of them. They are developing new technologies. At the…
Boralex Inc. (BLX-T) TSE
Sold his holdings fairly recently. This has just been added to the TSX Composite, so there will be quite a bit of index investors buying the stock over the coming weeks. 19.9% of the company is owned by Cascades (CAS-T), and he gets the impression that we are in a target range where Cascades might…
They just had a good quarter. A solid 10% YOY growth. Occupancy at 99%. He sees 5% AFFO growth. A low 73% payout ratio, so the dividend is safe. Great balance sheet. It's amazing, apart from a very high valuation and pays only a small dividend. A fine name, but he wouldn't buy it now.
Crombie Real Estate Investment Trust (CRR.UN-T) TSE
He likes that their portfolio has a lot of development potential, especially in the Safeway portfolio that they purchased. The market however has been very harsh on this because of their relation with the Empire group and the grocery debacle. He doesn’t think the grocery is going to fail. This means you are buying a…
Cominar Real Estate Inv Tr (CUF.UN-T) TSE
Heartbreaking story. Haven’t been as aggressive on asset sales, balance sheet not great. Model negative growth of -3.8%. Sowing seeds for growth, and if that’s the case, you can own it here. Trading at 11.3x. Wouldn’t be his first go-to, but OK at these levels.
Dream Office REIT (D.UN-T) TSE
On Q3, they substantially completed most of their asset sales for $1.6 billion. The balance sheet is in much better shape. Has material exposure to the Toronto market which is very hot. Payout ratio is fine on 2018, but will be better in 2019. Through the asset sales their funds from operations dropped 8% 2017-2019.…
Dream Industrial REIT (DIR.UN-T) TSE
He is a little wary of REITs right now. Valuations are excessive. You are paying 15 to 16 times cash flow. There is a lot of risk if interest rates ever start to move higher. The Calgary real estate market is not turning around in a hurry.
First Capital Realty (FCR-T) TSE
Retail focused, but it owns a lot of Yorkville and assets in areas of high income. They came out with a perfect quarter, raised guidance, and the stock dropped 5%, so he was buying aggressively that day. This is a rare opportunity to buy a very high quality high end retail at a very reasonable…
Granite REIT (GRT.UN-T) TSE
When this IPO’d, it was primarily dependent on Magna (MG-T) accounting for well over 90% of its net operating income. Management’s objective was to reduce Magna’s exposure to less than 50% NOI within 3 years by making additional acquisitions by using their under leveraged balance sheet. Management has not done that in a very aggressive…
InterRent REIT (IIP.UN-T) TSE
He is a big fan of this company. They have a very entrepreneurial style. Dividend payout is very low and very sustainable. Sees more than average growth potential, so continues to like it. Good management.
Inovalis REIT (INO.UN-T) TSE
This one holds only 4 assets in France and Germany. This is an opportunity to pick up some strong yield, while you are waiting for a European recovery. He sees more and more large investors, such as pension funds, going into Europe and buying up office buildings. Company is small and illiquid so it can…
Killam Properties Inc (KMP.UN-T) TSE
A really good growth name at a reasonable price. Has had a big run since January, but there is more to go. He models that it grows 10% annually for the next couple of years. That growth rate is much better than the sector average of around 4%, and yet this is trading at an…
Morguard North American REIT (MRG.UN-T) TSE
He favours this REIT. Doesn’t think it is going to cause anyone to jump out of their coffin. You might be fairly bored with it, but it is safe. He immensely favours Morguard (MRC-T) itself.
Northview Apartment Real Estate (NVU.UN-T) TSE
Proposing to take over True North Apartment REITs. A very controversial deal, and usually this company doesn’t do things that are deemed controversial. The market was not positive on this because basically you usually don’t do dilutive deals when you’re stock price is at a lower level and trading significantly below NAV. The view is…
Plaza Retail REIT (PLZ.UN-T) TSE
WPT Industrial REIT (WIR.U-T) TSE
(A Top Pick May 10/17, Up 10%) He's still buying it. It's priced and pays its dividend in USD, so his return is actually higher. It has US assets. It's a little known stock. They partner with CPP and Alberta Investment Management, where they build facilities, mostly warehouses for traditional and online retail and manufacturing.…
Automotive Properties Real Estate Investment Trust
Canada’s newest REIT. He does not think there is a big reason for fear, but was unhappy with the debt level. He is waiting it out to see how it performs. They have top notch management. This is very similar to ACQ-T, but you own the real estate of the dealerships. 10.6% yield.
CT Real Estate Invest Trust (CRT.UN-T) TSE
Has some good potential. A little expensive at the $11 range, but on any pullbacks, he would Buy. 5.86% dividend yield.
H&R Real Estate Inv Trust (HR.UN-T) TSE
At these levels the valuation looks attractive. The dividend is safe. They don’t have as high a dividend growth outlook as other REITs though. A good hold for a diversified portfolio.
RioCan Real Estate Investment (REI.UN-T) TSE
Riocan vs. Choice Properties REITs Riocan is trying to change their mix and their development properties are doing well. You're fine with either REIT, both quality. Choice is stable, because of Loblaw. Both are good for income in the long run.
True North Commercial REIT (TNT.UN-T) TSE
Has been a little weak lately. Made an acquisition of Century Property. Has a management arrangement with Starlight (?) but he would prefer a better management agreement but it is a really good source for small company acquisitions. 7.83% yield.
Gatekeeper Systems Inc (GSI-X) TSXV
Intact Financial (IFC-T) TSE
He does not own it, but he is watching closely with the recent pullback. It is extremely well run, but operates on thin margins. He would wait until after the Ontario election, because insurance rates can be a political football. It has a good long term future. (Analysts’ price target is $108 )
Minto Apartment REIT (MI.UN-T) TSE
Management is outstanding. A new REIT run by knowledgeable people. Highest quality of apartment space in Canada, focusing on Toronto. A long term hold with a safe distribution. He owns it.
Nexus Real Estate Investment Trust (NXR.UN-X) TSXV
This would not be his favourite. This is a multi-family REIT. Some of the ones he likes a little bit better have internal management and better balance sheets. If you are buying this, you are really buying it for the yield. You can get better risk/reward with similar yield with something like a Pure Multi-Family…
Canadian Western Bank (CWB-T) TSE
The whole banking sector is quite positive. The chart shows a little head and shoulders. If it can break above $32, it would probably run away pretty nicely. He likes the whole financial sector. (See Top Picks.)
Equitable Group (EQB-T) TSE
Assuming that the contagion is not so devastating, and assuming that they can still raise capital at a reasonable cost, he thinks this company will pull through. A year from now, many of these companies will regain their losses.
Home Capital Group (HCG-T) TSE
(A Top Pick October 5/17 Down 1%) He would have hoped the stock would have done a little better and is still sticking with it. He expects to see a resumption in the dividend soon.
National Bank of Canada (NA-T) TSE
(A Top Pick Jan 25/18, Down 9%) Banks in general had a rough year. Q4 was very strong for them. Trades at a discount compared to the group. He thinks it is going to grow at 8% annually. Still like it.
Partners REIT (PAR.UN-T) TSE
They are a leader in Canada, used to be in the US but pulled back. He bought it but it pulled back. He is getting a good return from the coupons. He thinks this one can double. They have more debt than he would like to see but the payout ratio is reasonable. It is…
🛢 Basic Materials
He doesn't own any drilling stocks. As economy recovers and more resources are needed, drilling companies will do better. Would prefer Trinidad (TDG-T) because of the yield. Use a stoploss at the 50-day moving average, but once you see the market rollover, exit and take your profit.
Marathon Gold Corp (MOZ-T) TSE
Chart shows they have broken their downtrend, which is a positive scenario. They're building a base pattern. Chart shows it is forming a couple of little tops and if gold does slide down, you are probably looking at $.70. Look for a little bit of resistance at $1.20. If it pulls up it probably represents…
Giga Metals Corp (GIGA-X) TSXV
Has a massive nickel deposit in northern British Columbia. Low grade, but can be mined as an open pit. The jury is out on this one. Looks intriguing.
MacDonald Mines Exploration (BMK-X) TSXV
Financed about a month ago with some great, great investors. Would wait until they have a discovery of their own. If you own, be cautious of the last few days in December or early January as a lot of investors will take profits. If you are a trader, you can pick it up in January.
Integra Resources Corp (ITR-X) TSXV
Management is first-class. The stock may be fully priced given where they are in the assets that they acquired. However, if you go back in time with this management, you don’t do poorly investing with them.
BCE Inc. (BCE-T) TSE
A bond proxy? A steady stock with a good dividend. The price war in wireless is canalizing some margins. He thinks the fundamentals of the company will likely deteriorate over the next couple of years. A 5.3% yield. He will continue to hold for now.
(A Top Pick Feb 21/19, Up 3%) A beautiful chart and story. Good performer in the past month with new all-time highs. It's been on a sharp upswing since the start of 2019. Loves it.
Ilookabout Corp (ILA-X) TSXV
Provides a service very similar to Alphabet (GOOGL-Q), which is provided for free. When your competitor is providing your services free, it is tough to be competitive.
He likes management. They have a big land area in Indonesia. It looks like a very interesting story but he is waiting for a meeting with management.
Here’s this week’s 52-week lows stocks on Stockchase…
(A Top Pick December 29/17 Up 4%). Agriculture is a growing segment due to changing demographics and growth in developing economies, he says. This company handles grain storage and are immune to fluctuations in grain prices as they are compensated by volume. He continues to like it.
Dorel Industries (DII.B-T) TSE
They make bikes, baby furniture, baby equipment, car seats, etc. The family that is involved in it owns a significant stake. He sees better days ahead. It is trading at a reasonable valuation. Dividend yield of about 4%.
Greenspace Brands Inc (JTR-X) TSXV
A developer brand in organic food space. Recently broke into Loblaw’s (L-T) and some other food chains. An acquisition driven story. They have quite strong organic growth of 20%+ a year, but will continue to acquire brands, develop them, and expand them from within. It is everything from baby food to pet food to drinks.…
They are exposed to hot emerging areas: self-driving cars and the internet of things. It is also very well-run. He looks at this stock sometimes. On his radar.
Siyata Mobile Inc (SIM-X) TSXV
They are building an integrated device allowing for two way talk within fleets. It has taken time for them to get all the certifications and approvals to get here. There were concerns that are now behind them. We need to see sales start to transpire into fleets in the US.
Crew Energy Inc. (CR-T) TSE
BIR-T vs. CR-T. BIR-T has much larger production than CR-T. BIR-T is a large cap vs. CR-T being a small cap. He likes both companies and owns them. He does not have a preferred one.
Gran Tierra Energy Inc. (GTE-T) TSE
Mullen Group Ltd (MTL-T) TSE
Trucking and well completion services. Pre-eminent logistics player on oil sands. Expected them to make acquisitions by this time. Long-term, great company to own. 3.4% yield.
Obsidian Energy (OBE-T) TSE
They have gone through a lot of stress at the Board level but that seems to have cleared up. They have a strong balance sheet, with $328 million in debt compared to $2.17 billion of equity. Their production this year will be about the same as last year. He thinks this stock is cheap, like…
Peyto Exploration & Develop. (PEY-T) TSE
Great driller and a low-cost producer of natural gas. However, the problem is the price of natural gas and how to get it out of Alberta and into a market that will pay more for it. That is a problem with a lot of natural gas stocks these days. Dividend yield of 8.96%, a warning…
Paramount Resources (POU-T) TSE
They did a good deal with VII-T. They build long term assets before the stock got beat up. It has recovered nicely. If the price of oil comes down then it is possible after the winter we could see lower prices of $4-5. Hold off and wait until about late Q2 of this year.
Petrus Resources Ltd (PRQ-T) TSE
They are 9,200 boed and 71% natural gas. They are working at reducing debt and building a position in the Cardium area. He has a $2.40 per share target in the next 12 months and he holds it personally. Yield 0%. (Analysts’ price target is $1.75)
Shawcor Ltd. (A) (SCL-T) TSE
Global pipeline coatings. As a Canadian we should all be very proud of this company. There are not many Canadian companies that are a world leader in what they do. Has held this as a Long position many times. The downside is that they are going through a rough patch right now. Management feels that…
Toscana Energy Income Corp. (TEI-T) TSE
This was one of the first royalty plays. Now that the pension funds have bought into the PrairieSky (PSK-T) business model, they understand the royalty play, and he thinks this will start to move. Reserve life on the proven is seven years. Yield of 11.62%. (Careful on this. They quoted a 11.62% yield a couple…
Tourmaline Oil Corp (TOU-T) TSE
(A Top Pick Mar 08/18, Down 8%) One of the biggest gas producers in Canada. He is surprised it has been as stable as it has. It has done a good job with hedging and market diversification. Still a core holding.
Delphi Energy Corp. (DEE-T) TSE
(A Top Pick April 6/15. Down 32.4%.) Natural gas producer in the Montney. Very well-run. Likes the story longer-term. This could be a $3-$4 stock again, but the problem is low natural gas prices. They are managing themselves frugally for these tough times. A name that you want to buy on weakness. If they got…
Precision Drilling (PD-T) TSE
PD has done relatively well, considering the drillers have been hammered in this sell-off. Need to see this hold at $2.80. There's been heavy tax-loss selling in oil. Don't step until January. See if resistance holds.
Zargon Oil & Gas Ltd (ZAR-T) TSE
(Market Call Minute.) Just acquired one of her junior companies and she intends to take the shares and hold.
Pinnacle Renewable Holdings Inc. (PL-T) TSE
Biofuel. Canada has an incredible forestry industry with a huge emphasis on planting trees. PL takes wood waste like sawdust and turns it into energy. This fuel can replace coal that is also carbon-neutral.
Painted Pony Energy (PONY-T) TSE
The chart looks good at the moment. This has formed a double bottom around $1.70 and has been trading steadily higher. This is a good bargain potentially and has moved through resistance around $3. As long as energy prices continue to do well, it could rally by another $0.50 with $2.60 as key support.
Leucrotta Exploration Inc. (LXE-X) TSXV
He is quite bearish on the broader markets, but the sentiment in the energy sector in Canada has been so negative that he thinks it is undervalued. They have no debt and has 900 prime low-cost Montney drilling locations with significant infrastructure and only about 10% of it is dry gas. CEO owns about 30%…
STEP Energy Services (STEP-T) TSE
Coming out of Arc Financial (private equity). Clean balance sheet. Trading at 1.9 times next year EBITDA. Historical average in Canada of a pumper is 7. Liquidity vacuum in the stock market is creating this opportunity. (Analysts’ price target is $18.20)
🛢 Basic Materials
Has a very good project in China. If you are okay with investing in China, there are two companies that stand out, this one and Sino Gold. Not a fan of China.
Nevada Copper (NCU-T) TSE
Quite a nice chart. Found a bottom in 09 followed by a nice rise. Looking pretty good but definitely into a consolidation stage. Potential to pause for a long time. Essentially going sideways since Nov/09. Exit if it goes below $2.80. If it starts moving up, has the potential of $4.50.
Teck Resources Ltd. (B) (TECK.B-T) TSE
Likes it, but concerned right now because it's a world economy stock. Not the time to step in. If you own it, hold. One of the best managed Canadian mining companies. If you're looking ahead to the 2020s, you could buy it on a dip.
Medgold Resources Corp. (MED-X) TSXV
He is a geological advisor to them. Consulted on a project in Italy, but it was not what he thought it would be.
Copper Mountain Mining (CMMC-T) TSE
A fantastic story. Have about 5 billion pounds of copper and gold. Cash costs in this environment should be about negative. Sees upside in this one.
Candente Resource Corp (DNT-T) TSE
Have properties in Peru and Newfoundland. Extended their Newfoundland properties from one to 3 km. Some risks involved. If you like the people that promoted Ivanhoe, it might be worth the risk, but put a stop under it at $.50.
Copper Fox Metals (CUU-X) TSXV
Has had a pretty significant run over the last few weeks and looks like it is consolidating. Have huge copper/gold deposit in northwestern British Columbia. At one of upside potential over the next year or two.
Northern Graphite Corp. (NGC-X) TSXV
Recently did a financing. Believes graphite, which is used in lithium batteries, is the next big wave in Canadian mining. Owns a small position in this one but may be adding to it. Wait until the financing comes off of restrictions, which could create some weakness.
Power Metals (PWM-X) TSXV
Hard to recommend this stock. Metals are like the oils now. Hold if you own it, but he wouldn’t put new money in.
Radient Technologies Inc. (RTI-X) TSXV
The extraction business is interesting because there are a lot of different forms they are using. This company has an interesting technology where they use microwave instead of flammable gas or CO2. It sounds very promising. Hasn’t looked into the details that closely. Aurora (ACB-T) has made a big investment into the company.
Columbus Gold Corp (CGT-T) TSE
Have projects in Nevada and French Guiana. Until recently, French Guiana was a tough place to explore. However, the government has mapped out areas where you can mine open pit, areas where you can mine underground and areas where you cannot mine. That is a huge plus. Have a large deposit in French Guiana of…
Advantage Lithium Corp. (AAL-X) TSXV
Last November he did a site visit in Argentina and it was the biggest site visit he ever saw. The lithium sector was hot, but now there's a fear that it might be well-supplied because SQM in Chile is now allowed to produce at a much higher volume than before. The Chinese are now partnering…
Graphene 3d Lab (GGG-X) TSXV
This is a material that is basically one layer of carbon. It is very difficult to produce. It is produced a little bit in labs and sells for a very high price, but hasn’t really been mass produced as yet. It could be the material of the future. It is revolutionary. Very light and very…
Has been a popular stock, Aurora is entitled to about half their production. High multiple, so same issue with supply coming down the pipe. There are some cheaper names, based on exports and production levels, such as Hydropothecary. Good company, but facing industry-wide issues.
Theratechnologies Inc (TH-T) TSE
Canntrust Holdings Inc. (TRST-T) TSE
This is a cannabis company that has a new product line for pets. He generally dislikes the sector and the associated valuations. You are betting this sector is going to explode and it is hard to know which companies will survive. It has a $600 million valuation on $20 million in sales.
Medx Health Corp. (MDX-X) TSXV
Their numbers were up 13%. They have a device that looks at moles for Melanoma. They are now focusing on health and safety for workers. There is a pilot going on with Loblaw’s.
Aurora Cannabis (ACB-T) TSE
He's short this. Mixed reports about the launch of cannabis in Canada since mid-October. Aurora at its peak had a $15-billion market cap, typical of investors betting on the future earnings of this sector. Auroura is highly acquisitive. Medical cannabis will be a great business. Aurora has bought in medical and recreational weed. Cannabis companies…
Acerus Pharmaceuticals (ASP-T) TSE
New drug delivery for more testosterone. Got a lot of attention because they are working on the female Viagra. It is a concept stock because they are in trials. If it works out it could be a huge win. But there are no revenue or earnings at this point so there is a lot of…
Hexo Corp (HEXO-T) TSE
They have a great opportunity in Quebec where they've just secured a big contract to supply cannabis to the retail market here. There's a good chance of it being bought out. Stock is relatively cheap compared to the big 5 as this industry consolidates.
Canopy Growth Corp. (WEED-T) TSE
These stocks had run up a tremendous amount. The valuation is insane. A lot of speculation in this space. The corporate governance in this space is not strong. For any investors that have made money in this space, should be taking profits now. It’s likely natural that they will pull back now that is legalized.…
Emerald Health Therapeutics Inc (EMH-X) TSXV
One of the 39 marijuana licensed producers. Has a small operation on Vancouver Island. Also, has property on the mainland and the goal is to build a new facility there and get it licensed. A new licensed facility, gets them into the Health Canada queue a lot faster. This company flies under the radar right…
A fairly small company. Management understands the mine. They have some natural gas storage. The price of natural gas in Alberta has been depressed and at some points in the summer it was down to zero. Having the storage facilities allows them to hold the gas from the market until the price comes back. They…
Drones. He wouldn’t want to own a drone maker, because it is going to be a Chinese industry. Instead of drones, these people are aiming for air rights, which he finds interesting. That is an asset you can’t replicate. Management is very, very skilled. They have built and sold a number of tech companies. They’ve…
Use this list wisely to identify buying opportunities.
Happy trading !!!