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.
They’re all ‘buys’: Analysts are unanimous on these Canadian stocks
Analysts have clear favourites among Canadian stocks trading on the S&P/TSX Composite Index, and what’s interesting about their top picks is that most are smaller companies that aren’t household names, David Berman writes.
To find analysts’ favourite stocks, we ran a simple screen: We ranked companies in the S&P/TSX based on analyst recommendations – from the stock with the most bullish coverage to the stock with the least, based on buy, sell and hold recommendations. Fourteen companies had nothing but buy recommendations, according to Bloomberg. We then narrowed the list of favourites to the 12 companies that have more than one analyst following them.
While a few were large, well known names, such as George Weston, others generate little publicity, including Parex Resources and Ag Growth International.
Heinzl’s mailbag: Don’t fret over Fortis’s share issue, banks that are poised to hike dividends, and my advice on pot stocks
John Heinzl responds to a reader question on possible future bank dividend hikes: Bank of Nova Scotia reported fourth-quarter earnings on Nov. 26 and didn’t raise its dividend. Bank of Montreal is up next on Dec. 3, and will likely raise its dividend by about 3 per cent, in keeping with its pattern of semi-annual increases, Canaccord Genuity analyst Scott Chan said in a note. Mr. Chan also sees National Bank of Canada and Laurentian Bank of Canada, both of which report Dec. 4, raising their dividends by 4 per cent and 1 per cent, respectively. Royal Bank of Canada, which also reports Dec. 4, and the remaining banks – Toronto-Dominion Bank, Canadian Imperial Bank of Commerce and Canadian Western Bank, all of which report Dec. 5 – will likely hold their dividends steady, he said. Read more answers to reader questions here.
More from John Heinzl: Best Buy, Hudson’s Bay and more investing stars and dogs for the week
As a seismic shift in retailing continues, this stock is worth targeting
A large part of the retail industry is in deep trouble, Gordon Pape writes. We’ve seen it developing for years: Consumers are abandoning traditional department stores, opting instead for big discounters and online shopping. The beneficiaries of this seismic shift are companies such as Costco, Walmart, Amazon – and Target. Remember it?
This is the company that blew more than US$5-billion in an abortive attempt to enter the Canadian marketplace a few years ago. Since that debacle, Target has refocused its attention to its U.S. home base and is doing very well. Third-quarter results released last month were so good they drove the stock sharply higher. And the outlook going forward is bright.
Valuations are flashing a warning sign about the high-flying utility stocks of the TSX
The utilities sector picked an odd time to shine, with Canadian stocks having their best calendar year in a decade, Tim Shufelt writes. Companies that generate power and distribute natural gas are typically prized by investors during times of financial or economic distress, when defensive stocks tend to hold their value better than the overall market.
And yet, in a year that has seen the S&P/TSX Composite Index ride a global rally in stocks to record highs, the S&P/TSX Capped Utilities Index sits close to the top of the leaderboard, with a sizzling 32-per-cent gain year to date. The spike in popularity of utilities stocks, however, is now starkly reflected in valuations, which are at record highs by some measures.
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What investors get wrong about holding cash
The question of what the best parking spot for cash is right now is best answered with a two-word phrase that I usually hate, Rob Carrick writes. “It depends.” Is the cash part of your savings for short- or long-term purposes, or is it a component of your investment account that might be deployed at any time? In the latter case, maybe it’s to take advantage of bargains after a horrible run for the stock market.
For liquidity purposes, one option is a high-interest savings account that trades like a mutual fund and offers a yield of 1.6 per cent these days. Another is a savings account exchange-traded fund, which offers a yield closer to 2 per cent.
Also from Rob Carrick: Six things you may not know about robo-advisers but should
What investors need to know for the week ahead
In the week ahead, the Bank of Canada makes its latest policy announcement on Wednesday, when it’s expected to keep rates unchanged. Companies releasing their latest results this week include Bank of Montreal, Royal Bank of Canada, Toronto-Dominion Bank, and Canadian Imperial Bank of Commerce, Dollarama and Roots.
Economic data on tap this week include: U.S. construction spending for October (Monday); Canadian and U.S. auto sales for November (Tuesday); Canada’s labour productivity for the third quarter (Wednesday); Canada’s merchandise trade balance as well as U.S. goods and services trade balance for October (Thursday); Canadian and U.S. employment numbers for November plus U.S. consumer credit and wholesale trade for October (Friday).
Also of note this week is the two-day NATO Summit in London starting on Tuesday, and the Canada’s new government convenes on Thursday with the Prime Minister’s Throne Speech.