John Stephenson is senior vice-president and portfolio manager at First Asset Investment Management. His focus is on resource stocks.
Baytex Energy Corp.
Widening Canadian heavy oil differentials due to a number of temporary factors have affected the profitability of many Canadian producers; however, with differentials expected to close over the next six months investors who buy Canadian heavy today will be rewarded tomorrow.
First Quantum Minerals Ltd.
This is quickly becoming the bellwether name in copper mining and if its proposed acquisition of Inmet Mining Corp. succeeds it will become a top ten global copper producer.
A solid 8-per-cent yield reflects worries of a sustained drop in NGL prices which is unwarranted. The company's value is compelling and the recent selloff in the shares offers an attractive entry point.
Past picks: Feb. 13, 2012
Talisman Energy Inc.
Total return: –2.64 per cent
Suncor Energy Inc.
Total return: +1.51 per cent
Canyon Services Group
Total return: –2.53 per cent
Total return average: –1.22 per cent
The global macro trade which has dominated markets over the last year will likely fade, offering stock pickers an opportunity for outperformance. While global growth will remain challenged in 2013, the unloved stock market will turn in another very solid year and cyclical companies will be the likely out-performers in the New Year.