Peter Brieger is CEO and managing director of GlobeInvest Capital Management. His focus is on North American large caps.
Scorpio Gold Corp.
Scorpio's target for its 2012 Nevada production is about 32,000 ounces, 60,000 ounces in 2013 and, in several years, 100,000 ounces. Its aggressive exploration of its existing properties and the likely acquisition of additional highly prospective lands, as well as a new mill, auger very well for its future cash flow and share price. Our most recent purchase was Oct. 5 at 70¢.
The long-term rationale is still intact: The need for governments in developing nations to provide food for their growing populations will lead to an increasing demand for crop nutrients, particularly nitrogen for corn. In the short term it is still too early to know what next year's weather will mean for nutrient demand. Finally, activist fund manager Jana Partners is still pressing for changes and is proposing its own slate of directors. Our most recent purchase was Nov. 8 at $93.32.
We regard Canadian banks' price-earnings ratios as being at an undeserved discount to the TSX. For example, TD, at a 10.4 PER on 2013 earnings relative to the 13.1 of the TSX is too cheap. While we concede that Canadian competition and slowing consumer demand will put some pressure on Canadian operations, we think that an improving U.S. economy will help its overall growth. Our most recent purchase was Dec. 12 at $81.15.
Past Picks: Dec. 16, 2011
Canadian Natural Resources Ltd.
Total return: –22.19 per cent
Total return: +25.49 per cent
Scorpio Gold Corp.
Total return: –27.03 per cent
Total return average: –7.91 per cent
In spite of any damage to the psyches of U.S. consumers and corporate leaders caused by uncertainty surrounding the "fiscal cliff," the TSX and S&P 500 have hung in much better than we would have expected. The outlook for a pre-New Year resolution to the problem appears much brighter, a development that the S&P may have already partially discounted. Also, China's fortunes appear to be improving. Finally, there appears to be an acceptance that while Europe is not yet out of the economic and financial woods, concrete steps are starting to be taken, that is, the establishment in 2013 of a trans-national European banking supervisor. All these things auger well for markets in 2013.