David Cockfield.
David Cockfield is managing director and portfolio manager at Northland Wealth Management. His focus is on Canadian equities.
Top picks:
Bell Aliant
Bell Aliant is a previous subsidiary of BCE and still 44-per-cent owned by BCE. The company offers telephone wire line service and TV services in the Maritimes, Quebec and Eastern Ontario. With 5.3 million customers, the company has been very successful in growing its fibre optics penetration and thus billings. The stock presently yields 7.03 per cent – the best of all the telecoms.
Agrium
A producer and distributor of a wide range of products, mainly fertilizer, sold to the agricultural industry, Agrium company operates globally with its major facilities in North and South America and Australia. The recent collapse of the potash cartel has driven the share price down sharply despite the fact that potash is only part of their fertilizer line. As world population expands, so will the demand for agricultural products and thus for products that Agrium distributes. The P/E ratio of the stock is under 10 times with a dividend yield of 3.45 per cent.
Crescent Point Energy
Crescent Point is one of the best-managed Canadian oil companies focused in the Bakken oil play in Saskatchewan and North Dakota. The company has been quick to ship oil via rail by building oil shipping facilities and production has again increased ahead of projections. The company has made no major acquisitions recently, responding to investor concerns about share dilution. The stock provides a generous yield of 6.80 per cent.
Past Picks: Oct. 19, 2012
Pacific Rubiales
Then: $24.91
Now: $22.58
Total return: -7.00 per cent
Baytex Energy
Then: $47.60
Now: $42.91
Total return: -4.04 per cent
SNC-Lavalin
Then: $38.25
Now: $43.11
Total return: +15.20 per cent
Total return average: +1.39 per cent
Market outlook:
The S&P/TSX composite index recently penetrated the 13,000 level with little difficulty, although this market level was expected to offer resistance. With the U.S. debt ceiling limit, budget problems, and Federal Reserve tapering postponed for the time being, equity markets should move higher. Canadian equity markets have significantly under-performed U.S. equity markets in the first half of 2013. However, since early July, the TSX has out-performed the Dow Jones industrial average by 6 per cent and the S&P 500 by 2 per cent and has been less volatile. We expect this pattern to continue through the fourth quarter.