Looking for investing ideas? Here’s your weekly digest of the Globe’s latest insights and analysis from the pros, stock tips, portfolio strategies plus what investors need to know for the week ahead.
Brace yourself: Volatility is set to return in the big bank stocks
The slowing economy is making it more difficult for equity analysts to accurately predict bank profits, suggesting that investors may want to get used to the kind of volatility that follows earnings misses, Tim Shufelt writes. Last quarter, four of the Big Six banks – Toronto-Dominion, Scotiabank, CIBC and National – fell short of earnings forecasts as higher credit losses stemming from slower growth took a toll on income statements. And when analysts’ forecasts are misaligned with actual results, stock volatility is sure to follow, particularly around earnings season. The banks’ next round of quarterly financial statements is slated for late May.
Read more: The returns of this little bank stock are putting the Big Six to shame - and it’s still cheap
This lender ranks at the top of Canada’s most abhorred stocks
What is Canada’s most hated stock? Laurentian Bank of Canada, please step forward, David Berman writes. The Montreal-based lender is a standout – in a bad way – among analysts. According to Bloomberg, just one brave soul recommends the stock as a buy, among the 10 analysts who cover the bank. Four of the 10 analysts say the stock is a sell. This is unusual. Analysts tend to have sunny dispositions toward most stocks, but lose hope in the case of companies where uncertainty is rife and quarterly disappointments are common. Laurentian is not alone in meeting overwhelming disapproval. Hudson’s Bay isn’t liked either. Nor is Cronos Group, Hydro One and New Gold.
Read more: These 11 TSX financial stocks still shine for value hunters
Are you an aggressive investor? These ETFs are for you
Gordon Pape breaks down aggressive investors into four types:
- The gains chaser: Dividends are secondary – you want to see your money grow at an above-average rate
- The futurist: You want to be on the leading edge of new developments.
- The risk taker: You want profits and aren’t concerned if it involves a high degree of risk.
- The gambler: You’re the type who wants to win big and is prepared to bet the pot to do so.
Here he offers two ETFs for each kind of aggressive investor.
Read more: A contrarian argues against building wealth and creating income through dividend stocks
A blessing for dividend investors: Debt ratings giant S&P shifts view on Canada’s telecom giants
Rating agency Standard & Poor’s is relaxing its recent warnings about the debt burdens shouldered by Canada’s largest telecom companies, Tim Kiladze writes. That’s easing the financial pressure on BCE, Rogers Communications and Telus as they spend tens of billions of dollars to build out their 5G networks. S&P’s rationale, in a nutshell, is a rather Canadian one: The three giants dominate the country’s telecom market, and that gives them pricing power. While their oligopoly can frustrate customers, it is helpful for healthy balance sheets – and it is extremely beneficial to dividend investors, who have long relied on the telecoms’ hefty payouts. If the telecoms’ debt ratings were downgraded, they probably could not keep hiking their dividends as frequently.
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Three ways to get a second opinion on your investment portfolio
As long as there have been investment advisers, there have been clients who wanted second opinions on their work, Rob Carrick writes. Money Coaches Canada has just launched the On Your Side Investment Report Card, a service that offers a thorough portfolio review by people who get paid a flat rate for their work and are not compensated through the sale of investments. There are also second opinions are available online from the independent stock analysis firm 5i Research and a software company called Wealthscope. All three work just as well for do-it-yourselfers as for people who have advisers.
More from Rob Carrick: The good advisers out there did this for their clients in early 2019
What investors need to know for the week ahead
The U.S. Federal Reserve will make its latest policy announcement on Wednesday, when it is widely expected to hold rates steady. There’s nother full roster of corporate earnings is coming in the week ahead, from companies including BCE, Canadian National Railway, Restaurant Brands International, Apple, Airbus, Encana, General Electric, General Motors, Glencore, McDonald’s, Pfizer, Shopify, A&W, Cameco, Canfor, Fortis, Loblaw, Manulife, Metlife, Suncor, Dow, Bombardier, Goldcorp, Great West Lifeco, Linamar and Maple Leaf Foods, Economics data on tap include: Canada’s GDP for February, as well as its industrial price index and raw materials price index for March (Tuesday); U.S. construction spending for March and Canadian and U.S. auto sales for April (Wednesday); U.S. factory orders for March and U.S. productivity for the first quarter (Thursday); U.S. employment figures for April (Friday).
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