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| Jim Houston of Davis-Rea Ltd |
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| SELL | Barrick Gold | ABX-T | 37.650 | A proxy for gold bullion. Prefers GoldCorp (G-T) because of their production growth and low cash costs and are expected to increase production by about 50% by 2013. | 2010-03-25 | ||
| DON'T BUY | Bombardier Inc (B) | BBD.B-T | 5.960 | Glory days of 1990s are gone and not coming back. Rail revenues are low margins and difficult to raise because it is usually state run railway companies they deal with. This represents 50% of overall revenues. Airline side is cyclical. C series is a positive development and they have orders for 90 of them but not enough to justify long-term growth. | 2010-03-25 | ||
| Comment | BCE Inc. | BCE-T | 30.760 | Have increased dividends a couple of times and payout ratio would indicate there is still room for more increases. Their business is under a fair bit of competition in prices and new competitors. Attractive dividend. | 2010-03-25 | ||
| BUY | Bank of Nova Scotia | BNS-T | 51.820 | Very impressed with the move that the banks have shown. Has exposure to growing markets of Latin America, Caribbean and Mexico. Great yield. Banks have had a great run so that may be some backing and filling in the short term. | 2010-03-25 | ||
| DON'T BUY | Canadian Imperial Bank of Commerce | CM-T | 75.970 | Expect banks to move higher over the long term. In the short term there could be backing and filling. Too much volatility compared to Royal (RY-T) and Toronto Dominion (TD-T). | 2010-03-25 | ||
| Comment | Encana Corp | ECA-T | 30.550 | Sees it going up in the long-term. Recently announced doubling production in the next 5 years, which has caused a problem for natural gas and share price. Fantastic inventory of projects with good positions in the shale play. Low-cost producer. Hedged about 60% of production at over $6 this year. | 2010-03-25 | ||
| TOP PICK | Enbridge | ENB-T | 49.170 | Had a fantastic combination of earnings and dividend growth providing very solid returns. Dividend has grown at an average annual rate of about 10% over the last 10 years and expects this to continue for the next 5 years. | 2010-03-25 | ||
| BUY | Goldcorp Inc | G-T | 37.500 | Should outperform bullion because its production will be growing by about 50% by 2013 at reasonably low costs. | 2010-03-25 | ||
| SELL | Manitoba Telecom Services | MBT-T | 31.950 | Low growth and high dividend yield in a difficult industry. Borrowing to pay the dividend is not a great model. Recently forced to pay $100 million into an under funded pension but are appealing it. Yielding about 8%. | 2010-03-25 | ||
| DON'T BUY | Manulife Financial | MFC-T | 20.130 | Prefers Sun Life (SLF-T), which yields about 4.5%. Had some issues last year. Almost became a 2X proxy on the market because of their leveraged ETF. Since then have raised equity twice and cut the dividend. Expects Canadian insurance industry can do quite well. | 2010-03-25 | ||
| HOLD | Power Financial Corp | PWF-T | 33.850 | Underlying assets of Great West (GWO-T) and IGM (IGM-T) gives good reason to think they will continue to grow. Will probably be increasing its dividend over time. 4% yield. | 2010-03-25 | ||
| BUY | Royal Bank | RY-T | 60.380 | Expect banks to move higher over the long term. In the short term there could be backing and filling. Fantastic domestic franchise. | 2010-03-25 | ||
| BUY | Sunlife Financial | SLF-T | 32.720 | Lots of evidence they will do well in the US, where they have about 40% of their business. MFS business looks like it is turning around quite nicely and should be able to gain market share. 4.5% yield. | 2010-03-25 | ||
| TOP PICK | Toronto Dominion | TD-T | 76.500 | Could be backing and filling in the short term. Will have a marvellous opportunity to consolidate their Northeast US business. Dividends have been growing at 12% a year over the last 10 years. | 2010-03-25 | ||
| TOP PICK | Thomson Reuters Corp | TRI-T | 36.770 | When they acquired Reuters in 2008, it significantly increased exposure to financial markets vertical but thinks they have a significant value proposition advantage to principal competitor Bloomberg. When contracts are up, there is a good chance they will increase market share. Also have accounting, legal and medical that are somewhat recession proof. | 2010-03-25 |
