Jeff Parent is vice-president and portfolio manager at Matco Financial. His focus is technical analysis.
Hardwoods is a Canadian-domiciled company that generates 60 per cent to 75 per cent of their top line in the U.S., which will lead to translation gains from a weaker Canadian dollar. After consolidating in the $8.30 range, it has begun to breakout nicely. Use the 100-day moving average as an exit point (now at $8.75).
CCL Industries Inc.
CCL is a market leader and natural consolidator of the industry with approximately 4 per cent of the current market share. It has high EBITDA margins compared to competitors, and nice consecutive runs in the price after periods of consolidation in 2013. Use $73 as a stop point.
Raging River Exploration
Focused on the Viking light oil resource play in southwest Saskatchewan, Raging River boasts impressive production and cash flow. It recently released strong reserve growth. A very steady chart helps identify turning point. The company could consolidate around $7 before breaking out. Use 100-day moving average as a stop.
Past Picks: December 21, 2012
Then: $10.79; Now: $13.80; Total return: +46.65%
Canaccord Financial Inc.
Then: $6.08; Now: $6.62; Total return: +13.31%
Then: $0.33; Now: $0.62; Total return: +90.77%
Total return average: +50.24%
In the bigger picture, we see markets reverting back to the normal. This will be negative for bonds and good for equities. Although U.S. markets are selling off, it looks more like profit-taking now. Canadian markets should catch up with more stability or rising prices in commodities. It’s a critical year for one of our big themes, LNG development. We foresee important announcements in the next 12 to 18 months as significant catalysts in a multi-year investible theme.