Bruce Campbell is president of Campbell & Lee Investment Management. His focus is on Canadian large cap stocks.
True North Apartment REIT
True North is a smaller, emerging apartment REIT that is being run by the former Transglobe REIT management team. They are growing through acquisition and buying buildings that can be financed with CHMC mortgages at profitable spreads. The growth and the 6.5% yield are quite attractive.
Cenovus is the lowest-cost producer of the major Canadian oil sands players and the stock has lagged the very recent bounce of the energy group. They have good production growth with a 6-8 year visible track for higher production.
McDonalds gives you solid, recession-proof growth at an attractive combination of 15 times earnings and a 3.2 per cent yield.
(August 15, 2011)
Total return: +9.14%
Total return: -25.54%
Total return: +34.83%
Total Return Average: +6.14%
The market tone had improved in the past six to eight weeks. Although Europe is still a possible problem, it appears they are on the track to at least stabilize the environment. Investors are now willing to take on a little more risk, which should be good for Canadian stock markets. Energy and metals have hugely underperformed and may be poised for some catch-up. Stick to large companies with dividends and good balance sheets as they are very cheap on a historical basis but some caution is still warranted until we see further European clarity.