Top Stock Picks & Market Outlook on BNN Market Call Tonight, June 12, 2013
Royal Bank of Canada (TSE:RY) Mkt cap 97.10B, P/E 11.09, Div/yield 0.63/4.25, EPS 5.35, Shares outstanding 1.64B. Owned by clients, Last purchase June 11, 2013, $59.70 Company Website
Royal Bank of Canada (RBC,) is the largest bank in Canada as measured by assets and stock market capitalization, and the 14th largest in the world as measured by stock market capitalization. RBC provides personal and commercial banking, wealth management, insurance, corporate and investment banking, and transaction processing services on a global basis.
RBC’s international banking segment includes its banking businesses in the United States and Caribbean. RBC Bank in the United States provides a line of products and services through 426 banking centers. In July 2012, RBC acquired a 50% stake of RBC Dexia Investor Services Limited from Banque Internationale a Luxembourg S.A. In February 2013, it acquired the Canadian automotive finance and deposit business of Ally Financial Inc. In April 2013, it acquired Athena Energy Group of Cos.
The Royal Bank of Canada has a strong capital base and earns a return on equity of around 18%. Recent pressure on the stock has caused the price to pull back to attractive levels with a current dividend yield of 4.2%
Goldcorp engages in the acquisition, development, exploration, and operation of precious metal properties in Canada, the United States, Mexico, as well as in Central and South America. The company’s primary focus is gold. It also mines silver, copper, lead, and zinc ores. The company’s principal mining properties include the Red Lake, Porcupine, and Musselwhite gold mines in Canada; the Peñasquito gold/silver/lead/zinc mine, and the Los Filos and El Sauzal gold mines in Mexico; the Marlin gold/silver mine in Guatemala; the Alumbrera gold/copper mine in Argentina; and the Marigold and Wharf gold mines in the United States.
Goldcorp is one of North America’s largest gold companies with a number of promising development projects in the western hemisphere. Gold production is anticipated to increase dramatically over the next four years. The prices of the gold producers have significantly reduced with the price of bullion falling over the last year. Goldcorp has a disciplined management team that will focus on cost control and returns on investment. At current prices, the stock offers good long-term prospects for price appreciation.
HudBay Minerals Inc. (TSE:HBM) Mkt cap 1.34B, P/E -, Div/yield 0.10/2.57, EPS -0.33, Shares 172.03M. Owned by clients, Last Purchase June 18, 2012, $7.66. Company Website
HudBay Minerals Inc is an integrated mining company. The company produces copper concentrate (containing copper, gold and silver) and zinc metal and focuses on the discovery, production and marketing of base and precious metals. It owns mines, ore concentrators and zinc production facilities in northern Manitoba and Saskatchewan and South America. The South America properties include the Constancia project in Peru, Hudbay Chile, Hudbay Colombia and Hudbay Panama.
With recent financing in place and several projects coming on-stream in the near term, production levels will increase. The key is the Company’s ability to finance the large Constancia project in Peru. Management is exploring several alternatives. With a number of development projects nearing production, the shares should react positively from the current depressed levels.
Recent volatility in the global markets is reflective of the uncertainty with respect to the sustainability of the current economic recovery. The Canadian stock market has lagged the US given our much larger exposure to commodities that have been under pressure. We anticipate that this state of uncertainty will be with us over the coming months. Investors should be prepared to take advantage of setbacks as they occur to position portfolios for the next business cycle.
See Michael interviewed by Mark Bunting on BNN’s Market Call Tonight>>