Market Call Tonight:
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Michael Sprung, President, Sprung Investment Management
FOCUS: Canadian Large Caps
Market Outlook:
Recent volatility in the global markets is reflective of the uncertainty with respect to the sustainability of the current economic recovery. The Canadian stock market has lagged the U.S. given our much larger exposure to commodities that have been under pressure. We anticipate that this state of uncertainty will be with us over the coming months. Investors should be prepared to take advantage of setbacks as they occur to position portfolios for the next business cycle.
TOP PICKS:
Royal Bank of Canada (RY TSX) Last purchase June 11, 2013, $59.70.
RBC is Canada's largest financial institution with extensive domestic banking and wealth networks as well as large global capital markets and global custody operations. Royal has a strong capital base and and earns a return on equity around 18 percent. Recent pressure on the stock has caused the price to pull back to attractive levels with a current dividend yield of 4.2 percent.
Goldcorp (G TSX)Last Purchase June 11, 2013, $28.58
Goldcorp is one of North America's largest gold companies with a number of promising development projects in the western hemisphere. Gold production is anticipated to increase dramatically over the next four years. The prices of the gold producers have significantly reduced with the price of bullion falling over the last year. Goldcorp has a disciplined management team that will focus on cost control and returns on investment. At current prices, the stock offers good long term prospects for price appreciation.
HudBay Minerals (HBM TSX)Last Purchase June 18, 2012, $7.66
HudBay Minerals is a major producer of zinc, copper and precious metals. With recent financing in place and several projects coming on-stream in the near term, production levels will increase. The key is the Company's ability to finance the large Constancia project in Peru. Management is exploring several alternatives. With a number of development projects nearing production, the shares should react positively from the current depressed levels.
| Disclosure: |
Personal |
Family |
Portfolio/Fund |
| RY |
N |
N |
Y |
| G |
N |
N |
Y |
| HBM |
N |
N |
Y |
Past Picks: June 10, 2012
Precision Drilling (PD TSX)
| Then: $7.79 |
Now: $9.13 |
+14.55% |
TR: +16.67% |
Barrick Gold (ABX TSX)
| Then: $40.13 |
Now: $20.24 |
-49.56% |
TR: -48.16% |
Progressive Waste Solutions (BIN TSX)
| Then: $18.60 |
Now: $22.48 |
+20.86% |
TR: +24.18% |
Total Return Average: -2.44%
| Disclosure: |
Personal |
Family |
Portfolio/Fund |
| PD |
N |
N |
Y |
| ABX |
N |
N |
Y |
| BIN |
N |
N |
Y |
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