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TOP PICK

(A Top Pick Dec 21/12. Up 12.27%.) Has been making great strides in getting its Book in order. Have some big development projects coming up. They were criticized for taking on the Constancia project in South America because of the large capital costs. Have done a lot lately to defray the fears of how they are going to finance. Did a streaming deal with Silver Wheaton (SLW-T), which means they get capital of front today to help them. Issued some unsecured notes to raise capital. Next year should be a much better year for them with projects coming on.

precious metals
BUY on WEAKNESS

Auto cycle continues to be in a recovery phase. This one is extremely well-positioned to take advantage of that. US consumer has a little bit more disposable income now. With more stability in the European economies, car companies, and the parts makers will continue to do well. Another 10%-15% drop and he will be seriously looking at this.

Automotive
N/A

Tapering. When this happens, what effect will this have on Canadian and US stocks? In the last year or so, just the threat of tapering has caused markets to have a hiccup. It has tended to be fairly short-lived. Really believes markets will take a hit when tapering begins to phase in. However, he does not think they will begin tapering until they’re fairly convinced that the economic recovery is strong enough to exist on its own merits. If anything, it should present a bit of a buying opportunity.

Unknown
COMMENT

Last quarter had a slight miss and that was because shipments were quite a bit lower than people had anticipated. This is something that can always be made up in the next quarter. Demand for coal seems to be coming back to a great extent. He finds this a very expensive stock, trading at a very significant multiple to cash flow.

INDUSTRIAL PRODUCTS
DON'T BUY

A stock like this can be very sensitive as to how people feel about what spending is going to be like, especially around Christmas. We are entering a very, very competitive retail landscape. Although this has very good customer loyalty and very good store positioning, more and more of their lines are going to have severe competition in the next couple of years.

specialty stores
DON'T BUY

There is a chance for a dividend increase. Their dividend is fairly small relative to their cash flow. The problem he has with Canadian railroads is that they have done so well and so fast. Trading at 20X earnings which seems to be fairly aggressive in an industry that can grow a whole lot more than the GDP of the economy they sit in. Trading at more than 4X BV.

Transportation
BUY

Prefers Bank of Nova Scotia (BNS-T) because of their international diversification and their tight, tight credit and the Royal Bank (RY-T), which seems to be firing on all cylinders. This is an area where he is going to continue to hold his bank stocks. Would have no hesitation in buying this bank.

banks