David Cockfield is the senior vice-president and managing director of Northland Wealth Management. His focus is on Canadian equities.
Market outlook
After a significant decline in the second quarter, the TSX seems to find support in the 11,200 to 11,300 range. With the European situation quiet for the moment and earnings reports both here and in the U.S. mixed but not that bad, equity markets seem to be in an upwards trend.
Looking ahead, further improvements in the U.S. housing market should provide some economic lift to the U.S. and equity markets there will respond positively. Commodity markets, helped by an acceleration of Chinese growth, should provide a lift to Canadian equity markets. Somewhere in the 12,500 range, the TSX will likely run into resistance.
Past Picks: July 29, 2011
Bell Aliant
Then: $27.70
Now: $25.04
TR: -3.04 per cent
Goldcorp Inc.
Then: $45.69
Now: $36.45
TR: -19.29 per cent
Crescent Point Energy Corp.
Then: $42.95
Now: $39.68
TR: -1.40 per cent
Total return average: -7.91 per cent
Top Picks:
iShares Advantage U.S. High Yield Bond Index Fund
An ETF that mirrors an index of high yield U.S. corporate bond portfolio. The portfolio is very diversified which offers risk protection. The ETF has in the last six months traded in a fairly narrow range, between $20.84 and $19.63. This ETF is likely very negatively impacted by any rise in interest rates, but in the interim provides a yield paid monthly over 7 per cent. Recent purchase July at $20.56.
Crescent Point Energy Corp.
A fast growing Canadian oil-focused company dominant in Bakken oil play in Saskatchewan and North Dakota. The company has been very active in acquiring smaller oil companies and adding to its already large land position. The company is highly ranked for its excellent operating record. Growth through acquisition has meant dilution of the shares but the company has continued to be able to pay an excellent dividend presently close to 7 per cent. Recent purchase July at $39.40.
SNC Lavalin Group Inc.
A Canadian based world class engineering and construction company, with offices across Canada and in 35 countries worldwide. The company provides a wide range of services including engineering, procurement, construction, project management and financing. The stock has recently fallen in price due to a scandal in one of its divisions. The company has not been affected from a business standpoint and continues to sign significant lucrative deals. Recent purchase June at $39.66