Top Stock Picks 2017 – Michael Sprung on BNN’s Market Call – April 28th, 2017

Top Stock Picks 2017 Outlook
 

As we look back at the first 100 days of the Trump administration, we see a period filled with conflicting messages. The media has been prolific in their condemnation of Trump's policies but the capital markets have been more sanguine.  Sine the election in November, the US markets have enthusiastically embrace the promises of deregulation and lower taxes that were the cornerstones of the Trump campaign. The enthusiasm paused briefly when changes to health care met with resistance and investors realized that not all of the promises are likely to be easily forthcoming. The Canadian markets were not as robust. Weak energy prices and tepid economic growth were reflected in more range bound markets. European markets were a bit more robust as factories exhibited greater activity as was the case in much of Asia as exports from Taiwan, South Korea and China were up from a year ago.

Michael Sprung Top Picks BNN Market Call April 28 2017

Michael Sprung's Top Picks BNN Market Call: April 28, 2017

There is certainly reasons to be optimistic on the global economy as orders for capital equipment are on the rise and employment improves. It has been a long, hard climb out of the financial abyss of ten years ago as is often the case in financial crisis. The difficulty of the recovery has been reflected in large part in the rise of populist politics as evidenced by the Brexit vote and the election of Donald Trump. Europe faces a few key elections this year.

Politics and economic cycles are often out of sync. The politics of populism are not as accommodating to the concepts of free trade and globalization that have sown the seeds of the current recovery; yet those very politicians may point to the recovery and take credit where none is due, In fact they may sow the seeds of the next downturn.

We Canadians are very aware of these factors as we gear up for renegotiating the NAFTA agreement.

 

Top Stock Picks 2017


Canadian Imperial Bank of Commerce, CM-T, Owned by clients and personally, Last Purchase Sept 16, 2016 $101.00

CM is Canada's fifth largest bank by market capitalization. Over the better part of the past decade, management has concentrated on de-risking and shoring up the balance sheet largely by retrenching and focusing on core competencies. The bank is now the most profitable as measured by return on equity and has one of the strongest capital bases. The recent purchase of PrivateBancorp  establishes CM with a larger foothold in US. This is a well run, well managed bank and CM has paid a premium to make this purchase. Most recently, the share price has pulled back as concerns about the Canadian mortgage market have been in the spotlight. At current prices, the bank yields around 4.6%.

Suncor Energy, SU-T, Owned by clients, Last purchase March 2, 2016 $32.94

Suncor is Canada's largest integrated oil and gas company. Suncor has 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. Management has been focused of increasing efficiencies and positioning the company for future growth. Over the remainder of the year, Fort Hills and Hebron will be coming online. Suncor has a strong balance sheet to support and expand operations. At current levels, the stock yields 3.1%.

Goldcorp, G-T, Owned by clients, Last Purchase March 30, 2017 $19.43

Goldcorp is one of North America's largest gold companies that  now beginning to reap the rewards of major capital spending over the past few years as Penasquito is in production. Joint ventures with Barrick and Teck Resources will assist in driving costs down over the next few years as management begins to prepare for future growth in Arizona and Chile.

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We believe that investment management is about managing risk, not chasing speculative returns. Like to learn more? Please contact us here>> The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.  

Goldcorp (TSE:G) & Barrick partner to tap into Chilean gold

Goldcorp Inc (TSE:G, Mkt cap 15.88B, Div/yield 0.03/0.54, EPS 0.25, Shares 853.81M) and fellow gold miner Barrick Gold have teamed up in an attempt to tap into one of the world's biggest undeveloped gold projects in Chile's Atacama Desert.

The equal-split joint venture will see Vancouver-based Goldcorp make several acquisitions as part of the deal, resulting in a total investment commitment of US$520 million, the Financial Times reports.

Goldcorp TSE:G Barrick partner Chilean gold

Goldcorp (TSE:G) & Barrick partner to tap into Chilean gold

The deal to develop projects in Chile's Maricunga gold belt in the north of the country follows years of budget cuts by gold miners due to low gold prices.

David Garofalo, chief executive of Goldcorp, said the Cerro Casale and Caspiche projects allow the company to consolidate infrastructure to reduce capital and operating costs, reduce the environmental footprint and provide increased returns.

To facilitate the 50/50 split, Goldcorp will buy out Kinross Gold Corp's 25% stake in Cerro Casale – which is majority owned by Toronto-based Barrick – and other assets in a deal that includes US$260 million cash. It has also agreed to pay the first US$260 million of Barrick's costs towards developing Cerro Casale as part of an agreement for an additional 25% stake.

Goldcorp will also contribute two other adjacent exploration developments, the Caspiche and Quebrada Seca projects, as part of the joint venture.

Barrick president Kelvin Dushnisky said Goldcorp will bring a "fresh perspective" to Cerro Casale, as well as "the potential for synergies in the district".

It's estimated that Cerro Casale has 23 million ounces of gold reserves and 5.8 billion pounds of copper, with Barrick yet to make attempts to mine any of it having cited unfavourable economics for several years.

The deal with Goldcorp follows a regulatory filing on March 23 which revealed that Barrick would look for alternative ways to develop the project.

Goldcorp Inc. is a gold producer engaged in the operation, exploration, development and acquisition of precious metal properties in Canada, the United States, Mexico, and Central and South America. The Company is engaged in the sale of gold, silver, lead, zinc and copper. The Company's segments include Red Lake Gold Mines Ontario Partnership (Red Lake), Goldcorp Canada Ltd./Goldcorp Inc. (Porcupine), Musselwhite, Les Mines Opinaca Ltee (Eleonore), Minera Penasquito S.A. de C.V. and Camino Rojo S.A. de C.V. (Penasquito), Desarrollos Mineros San Luis S.A. de C.V. (Los Filos), Montana Exploradora de Guatemala S.A. (Marlin), Oroplata S.A. (Cerro Negro), Corredor SpA (Project Corridor), Minera Alumbrera Limited (Alumbrera), El Morro and Pueblo Viejo Dominicana Corporation (Pueblo Viejo). The Company's principal product is gold dore with the refined gold bullion sold primarily in the London spot market. More from Reuters »

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The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.  

Goldcorp swoops to buy Kaminak as gold prices surge

Goldcorp Inc. (TSE:G, Mkt cap 20.35B, P/E – , Div/yield 0.03/0.45, EPS -6.19, Shares 832.22M) is set to make its biggest acquisition in five years after agreeing to buy Canadian explorer Kaminak Gold Corp. in a $520-million share swap.

Goldcorp Inc Kaminak

Goldcorp swoops to buy Kaminak as gold prices surge

With gold prices surging 20 cent this year and Goldcorp announcing its first profit in three quarters, the move appears well timed, the Globe and Mail reports.

It’s understood that Goldcorp’s CEO, David Garofalo, has identified Kaminak’s Coffee project in the Canadian Arctic as a potential new source of output to help close the gap with more valuable rivals Barrick Gold Corp. and Newmont Mining Corp.

The world’s third-most valuable bullion producer is heading for its best year in the stock market since 2009, which helps explain why it has swooped to buy Kaminak. Pending approval, it will represent Goldcorp’s biggest buy since Andean Resources Ltd., which was completed in 2011 when gold soared above $1,900 an ounce.

“This acquisition is consistent with our strategy of partnering with junior exploration companies to identify and develop mining districts with significant exploration potential that is expected to grow our net asset value per share,” Garofalo said in a statement.

Each Kaminak share will be exchanged for 0.10896 Goldcorp shares in an arrangement that values Kaminak stock at $2.62, or 40 per cent more than the 20-day average. About 21.6 million Goldcorp shares will be issued for the deal.

Gold miners have announced $1.22 billion-worth of mergers and acquisitions so far this quarter, pushing it beyond the $1.12-billion in deals last quarter, although still less than half the levels of 12 months ago, according to data compiled by Bloomberg.

Goldcorp Inc. is a Vancouver based gold producer engaged in the operation, exploration, development and acquisition of precious metal properties in Canada, the United States, Mexico, and Central and South America. The Company is engaged in the sale of gold, silver, lead, zinc and copper. The Company’s segments include Red Lake Gold Mines Ontario Partnership (Red Lake), Goldcorp Canada Ltd./Goldcorp Inc. (Porcupine), Musselwhite, Les Mines Opinaca Ltee (Eleonore), Minera Penasquito S.A. de C.V. and Camino Rojo S.A. de C.V. (Penasquito), Desarrollos Mineros San Luis S.A. de C.V. (Los Filos), Montana Exploradora de Guatemala S.A. (Marlin), Oroplata S.A. (Cerro Negro), Corredor SpA (Project Corridor), Minera Alumbrera Limited (Alumbrera), El Morro and Pueblo Viejo Dominicana Corporation (Pueblo Viejo). More from Reuters »

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We believe that investment management is about managing risk, not chasing speculative returns. Like to learn more? Please contact us here>>

The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.

 

Goldcorp data breach a sign of the times, says lawyer

“There’s more and more hacking, year after year,” a corporate lawyer warned, after Goldcorp Inc. (TSE:G, Mkt cap 19.25B, P/E – , Div/yield 0.03/0.46, EPS -6.18, Shares 832.22M) became the latest organization to fall victim to a data breach, the Financial Post reports.

Goldcorp data breach

“There’s more and more hacking, year after year,” a corporate lawyer warned, after Goldcorp fell victim to a data breach

Vanessa Coiteux, a lawyer in the Montreal office of Stikeman Elliott LLP, told the FP: “I think Goldcorp is a good example that every company is at risk.”

The Goldcorp breach is said to have amounted to 14.8 gigabytes of data, as per the Daily Dot website. The online newspaper claims that leaked data includes payroll information, private budget documents, bank account specifics, and employee passport scans, among other things.

However, David Garofalo, Vancouver-based Goldcorp’s chief executive, would not be drawn on what exactly was obtained by hackers, stating that “It’s a police matter now.”

“What I can tell you is our business is operating normally. And as a public company, we are obliged to disclose all material information and I’m confident we have,” he added.

Garofalo agreed with Coiteux that it was now commonplace for hackers to steal private data from companies and then try to extort money from them in exchange for keeping it confidential.

Goldcorp is certainly not the only big business to come under fire from hackers in the past few years. Target Corp., for example, has paid more than US$250 million in costs related to a 2013 data breach in its operations – of which US$90 million was covered by insurance.

In 2014, Sony Corp. famously drew the wrath of hackers, who took exception to The Interview, a Sony film that mocked North Korean leader Kim Jong Un.

Indeed, Goldcorp is not the only victim in Canada’s mining sector, with Detour Gold Corp. hacked last year by a group that claimed to be from Russia.

Goldcorp Inc. is a Vancouver based gold producer engaged in the operation, exploration, development and acquisition of precious metal properties in Canada, the United States, Mexico, and Central and South America. The Company is engaged in the sale of gold, silver, lead, zinc and copper. The Company’s segments include Red Lake Gold Mines Ontario Partnership (Red Lake), Goldcorp Canada Ltd./Goldcorp Inc. (Porcupine), Musselwhite, Les Mines Opinaca Ltee (Eleonore), Minera Penasquito S.A. de C.V. and Camino Rojo S.A. de C.V. (Penasquito), Desarrollos Mineros San Luis S.A. de C.V. (Los Filos), Montana Exploradora de Guatemala S.A. (Marlin), Oroplata S.A. (Cerro Negro), Corredor SpA (Project Corridor), Minera Alumbrera Limited (Alumbrera), El Morro and Pueblo Viejo Dominicana Corporation (Pueblo Viejo). More from Reuters »

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We believe that investment management is about managing risk, not chasing speculative returns. Like to learn more? Please contact us here>>

The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.

 

Canada Stockwatch – Goldcorp Puts Positive Spin On Disappointing Earnings In Q1

Canada Stockwatch – Goldcorp Inc. (TSE:G, Mkt cap 18.22B, P/E – , Div/yield 0.06/3.30, EPS -3.57, Shares 829.40M) remains optimistic about the second half of 2015, despite reporting much weaker-than-expected first quarter results last week.

Canada Stockwatch Goldcorp House Perth Mint

Canada Stockwatch – Goldcorp House at the Perth Mint: putting a positive spin on disappointing Q1 earnings.

As the Financial Post reports, shrinking margins, higher depreciation and depletion expenses, combined with a higher effective tax rate, all took their toll on the gold producer’s bottom line in the first three months of the year.

Adjusted profit came in at just US$12 million, or a penny a share – lower than even the most pessimistic analyst estimates. With one-time items factored in, Goldcorp showed an overall net loss of US$87 million for the three-month period.

However, the Vancouver-based company may take some solace in the fact that fellow gold businesses Barrick Gold Corp. and Yamana Gold Inc. both also reported disappointing earnings in the past week.

Goldcorp’s average gold sale price in Q1 was US$1,217 an ounce, which represents a relatively modest decline from US$1,297 in the same period 12 months ago. Meanwhile, all-in sustaining costs were US$885 an ounce, up US$40 year-over-year.

Goldcorp, the world’s biggest gold miner in terms of market value, has said it will not restrict its production demands in light of the results, nor has it chosen to alter its cost guidance for the year. However, the company raised its tax guidance.

Chief executive Chuck Jeannes said the firm remains resilient in face of disappointing earnings, adding that it is remains on the lookout for possible acquisitions.

“We are pleased to begin 2015 with strong cash flow performance,” he said in a statement. “Our primary focus in 2015 is on safely executing our plans and forecasts.”

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The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.