BNN Top Stock Picks and Market Outlook : Market Call : September 04, 2013
We anticipate a challenging environment in the final months of 2013. Middle East tensions are escalating while concerns regarding the apparent slower growth in the emerging economies work together to confuse investor sentiment. Closer to home, fears of the effect tapering of the US Federal Reserve’s easing will have on the capital markets and speculation as to the direction the Reserve may take under new leadership, adds to investor discomfort. Disciplined investors will be taking advantage of market setbacks in this period as they position portfolios for the years ahead.
With interest rates rising, investors are re-evaluation their risk. We are pleased to offer qualified* investors our free portfolio review. It will help you to understand if your portfolio matches your personal risk tolerance. Ask us how>>
Canadian Imperial Bank of Commerce (TSE:CM)
Market cap 32.84B, P/E 10.00, Div/yield 0.96/4.68, EPS 8.21, Shares outstanding 399.99M, Last Purchase: $78.90, Date: March 27, 2013, Owned Personally and by Clients. Company website: https://www.cibc.com/ca
The Canadian Imperial Bank of Commerce is the fifth largest Canadian bank by deposits. The bank’s two strategic business units, CIBC World Markets and CIBC Retail Markets, also have international operations in the United States, the Caribbean, Asia and the United Kingdom. The company ranks at number 172 on the Forbes Global 2000 listing. CIBC was named the strongest bank in Canada and North America, and the 3rd strongest bank in the world, by Bloomberg Markets magazine, in May 2012.
The banks have just finished reporting their third quarter results for the current fiscal year. For the most part, results exceeded expectations. The Canadian Imperial Bank of Commerce in particular posted positive results across all its major business lines. The company earned C$890 million ($848.75 million), or C$2.16 a share, in the fiscal third quarter ending July 31. That compared with a profit of C$841 million, or C$2.00 a share, in Q3 2012. While some uncertainty remains regarding the future of their Aeroplan business, the stock continues to sell at a discount despite its industry leading profitability and strong capital base.
Suncor Energy Inc. (TSE:SU)
Market cap 54.17B, P/E 19.97, Div/yield 0.20/2.22, EPS 1.81, Shares outstanding 1.50B, Last Purchase $31.02, Date March 19, 2013, Owned by clients. Company website: http://www.suncor.com
Suncor is Canada’s largest integrated oil and gas company. The Company is focused on developing petroleum resources in Canada’s Athabasca oil sands. The Company also explores, acquires, develops, produces and markets crude oil and natural gas in Canada and internationally, and the Company transports and refines crude oil, and market petroleum and petrochemical products primarily in Canada. The Company operates under three segments: oil sands, exploration and production, and refining and marketing. It also markets third-party petroleum products and conducts energy-trading activities focused principally on the marketing and trading of crude oil, natural gas and by-products.
In mid-August Warren Buffett, the CEO of Berkshire Hathaway Inc. revealed in a U.S. regulatory filing that he has accumulated 17.8-million shares in Suncor Energy Inc. His investment is worth $640-million at the current share price.
Suncor is a core holding in our clients’ portfolios. It’s a significant validation to see other investors, including Mr. Buffett, the world’s bet know value investor, finally beginning to appreciate the compelling attributes of Suncor. These include a strong production base with quality long-term assets, a strong balance sheet, and an integrated business model smoothing to some extent the cash flow from the various business segments.
Agrium Inc. (TSE:AGU)
Market cap 13.13B, P/E 9.24, Div/yield 0.52/2.32, EPS 9.62, Shares outstanding 147.66M, Last Purchase $96.55, Date: May 5, 2013, Owned by clients. Company website: http://www.agrium.com
Agrium is a global producer and marketer of nutrients for agricultural and industrial markets. The Company operates through its three business units: retail, wholesale and advanced technologies (AAT). AAT uses three production methods: coating methods, in which fertilizers are encapsulated to provide a desired release profile; reacted slow release production, where urea is combined with other nitrogen elements to produce a slow release profile; and the packaging and blending of fertilizers.
All of the stocks in this segment have been depressed with weakening prices and uncertain near-term demand. Agrium is well priced at current levels to provide a well-balanced vehicle to get exposure to the positive long-term attractive fundamentals in this industry. The company has a multi-product line in all three major nutrients as well as a retail segment that exhibits lower earning volatility often offsetting weaker periods in the wholesale segment.
We are pleased to offer qualified* investors our free portfolio review. It will help you to understand if your portfolio matches your personal risk tolerance. Ask us how>>
*Canadian residents with a minimum $500,000 portfolio.
See Michael discuss these stocks with Michael Hainsworth on BNN Market Call here>>