Stockwatch – Michael Sprung’s Top Picks
Manulife Financial Corp. (TSE:MFC, Mkt cap 37.99B, P/E 11.68, Div/yield 0.13/2.54, EPS 1.75, Shares 1.85B) Owned personally and by Clients, Last Purchase: April 10, 2014, $20.54
Manulife is a leading Canadian-based financial services group with operations in Asia, Canada and the United States. Over the past five years, the company has made tremendous strides in de-risking the balance sheet and improving profitability through increasing wealth management operations as well as redirecting the mix of products sold. The insurance companies will be amongst the beneficiaries should interest rates start to rise. MFC has one of the strongest capital bases in the industry and future dividend increases would not be unexpected.
HudBay Minerals Inc. (TSE:HBM, Mkt cap 1.83B, P/E – , Div/yield 0.01/0.21, EPS -0.75, Shares 193.01M) Owned by Clients, Last Purchase: June 3, 2014, $9.85
HudBay Minerals is one of Canada’s leading producers of zinc, copper and precious metals. As the Reed and Lalor mines ramp up production in the second half of 2014, investors’ attention will shift to the anticipated start of production at Constancia in Peru late this year or in early 2015. After completing a streaming agreement with Silver Wheaton on Constancia, HBM has arranged extended credit facilities with BNP Paribas and ING Capital. At current prices, long term investors can initiate positions and participate as HBM’s projects mature.
North West Company Inc (TSE:NWC, Mkt cap 1.14B, P/E 17.89, Div/yield 0.29/4.93, EPS 1.31, Shares 48.42M) Owned by Clients, Last Purchase: June 12, 2014, $23.52
North West Company is one of Canada’s oldest retailers with operations in Canada, Alaska, the South Pacific and Caribbean. Recent results reflecting a weaker retail environment in Northern Canada and greater competition in some Giant Tiger and Cost-U-Less banners has caused the share price to pull back to attractive levels. Management has outlined a plan to focus more on the company’s top 40 markets, optimize inventory and in-store mix as well as improve the customer experience. In the interim, the 4.9% yield will appeal to investors.
Stockwatch – Market Outlook:
North American markets have demonstrated a great deal of resilience in the the past few years during a slow, fragile recovery in business conditions. In Canada, 2014 has been particularly strong despite weakness in the materials sector and manufacturing. Individual stocks representing good long-term value are becoming harder to uncover. Investors would be well advised to have funds available to take advantage of a market setback.
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