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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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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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.

Goldcorp Boosts Portfolio With $526m Probe Mines Purchase

Goldcorp Inc. (TSE:G, Mkt cap 22.79B, P/E – , Div/yield 0.06/2.57, EPS -1.15, Shares 813.53M) has unveiled a deal to buy Toronto-based Probe Mines Ltd. for $526 million in stock, or $5 a share, the Financial Post reports.

The deal was priced some 49% higher than Probe's closing price late last week, and analysts said that Goldcorp is paying a "healthy price" for the junior mining company.

Chief executive of Probe Mines, David Palmer, said there had been little thought about selling the firm following a successful 12 months, but he explained that changed once the project caught the attention of the bigger companies.

It's not every year that a junior mining company makes a significant gold discovery, but that was the case for Probe at its Borden Gold project, located 160 kilometres southwest of Timmins, Ont.

Last summer, Probe said it had identified two million ounces of high-grade gold resources at Borden. Whilst this might not be considered a colossal find on its own, it became much more impressive when the company made it known that the high-grade core is surrounded by large quantities of lower-grade gold, as well as untapped exploration ground.

The sale to Goldcorp seems to make sense for a number of reasons, including the fact that it knows the Timmins area well, as its Porcupine mine continues to be the region's dominant producer.

The Vancouver-based producer plans to unlock savings in this transaction by transporting ore from Borden to its Porcupine processing facilities, thus reducing capital costs and permitting requirements at Borden.

The purchase comes shortly after the news that Goldcorp will report a write-down in excess of $2 billion on its new Cerro Negro mine in Argentina. However, with the company worth in the region of $23 billion, it's unlikely to have been shaken drastically by this hit.

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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 To Announce Write-down on Argentinian Mine and Acquisition of Probe Mines

With the Argentine government clamping down on foreign mining companies, Goldcorp Inc. (TSE:G, Mkt cap 22.79B, P/E – , Div/yield 0.06/2.57, EPS -1.15, Shares 813.53M) has announced it expects to record a significant write-down of up to US$2.7 billion on its new Cerro Negro mine in the country.

As the Financial Post reports, the Argentine government has employed a number of tactics in order to bat down the profits of outside mining firms, including implementing exchange rate controls that limit companies' ability to convert Argentine pesos into U.S. dollars.

Goldcorp Porcupine MineGoldcorp said it did not envisage running into these sorts of problems when it paid $3.6 billion to acquire the Cerro Negro project back in 2010. Chief executive Chuck Jeannes says that although he expects the hurdles to fall away over time, the short-term cost of the impairment will come in at somewhere between US$2.3 billion and US$2.7 billion.

The exact reduction in the book value of the company's Cerro Negro asset will be reported in its fourth quarter earnings, but Jeannes suggests its unfortunate timing in Argentina will not have too much of a bearing on the firm's overall outlook.

"We enter 2015 with an outstanding portfolio anchored by young, low-cost mines that are positioned to contribute free cash flow this year and beyond," he said in a statement.

The Cerro Negro project encountered problems from the start, with constructions costs running well over budget. However, with the mine finally reaching commercial production at the start of January, it will produce up to 475,000 ounces this year and is expected to be a major cash flow generator for Goldcorp.

Goldcorp also announced plans to acquire Probe Mines Ltd (CVE:PRB) for 0.1755 of a G share, equivalent to C$5.00 per share or for a total cost of ~C$526M (a 49% premium to PRB's January 16 closing price). Probe Mines shareholders will also receive one-third of a New Probe share which will contain the Black Creek Deposit, Tamarack-McFauld's Lake property, Victory Property, C$15M in cash and C$4M receivable related to the previous sale of a royalty on the Goldex mine. The transaction is expected to close in March. Goldcorp already holds 9.3% of Probe Mines.  

Goldcorp 's Porcupine mine is located 160km away.  Ore could be transported to Goldcorp 's mill facility, which would reduce capital costs and permitting requirements and also deliver higher grade ore.  

What is Successful Investing? Learn more here>>

Download Our Free Special Report – How to Hunt For Value Stocks. Michael Sprung will share with you 5 stocks set for long-term gains here>>

We believe successful investors must challenge the market consensus by maintaining an independent point of view.  

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.

 

Stockwatch – Goldcorp Reports An Impressive Increase In Earnings In 2014’s Q2

Stockwatch – Vancouver-based gold producer Goldcorp Inc. (TSE:G, Mkt cap 25.90B, P/E – , Div/yield 0.05/2.06, EPS -0.98, Shares 813.40M) has reported a clear increase in earnings for the second quarter of 2014 as the company continued to cut costs in the first half of the year.

Stockwatch Goldcorp Porcupine Mine increased Q2 earnings

Stockwatch – Goldcorp reports increased earnings for Q2

Adjusted revenues for the second quarter amounted to $1.1 billion, generating adjusted net earnings of $164 million in the period — up from $117 million a year ago, the company said in a statement.

Goldcorp reported net earnings, attributable to its shareholders, of $181 million, or $0.22 per share, compared to a loss of $1.93 billion in 2013, which was mostly a result of a $1.83 billion one-off impairment charge linked to Goldcorp’s Penasquito mine in Mexico.

The company’s president and chief executive Chuck Jeannes said that among the main drivers behind Goldcorp’s positive second quarter-results were the continued solid production and cost performance across the company’s portfolio.

Goldcorp said that all-in sustaining costs stood at $852 per ounce of gold, dropping from $1,227 per ounce in the second quarter of last year. The decrease was made possible increased production efficiencies and lower sustaining capital.

Jeannes said the cost improvements Goldcorp accomplished via its Operating for Excellence program, coupled with grades and recoveries helped earnings from its Penasquito mine, which is to reach about $130 million in the quarter.

The company also announced the commencement of gold production at its Cerro Negro mine in Argentina — Goldcorp’s newest gold mine. Jeannes believes it marks the beginning of a period of increased production, decreasing costs and reduced capital spending for the company.

Goldcorp said its growth projects – Eleonore in Quebec and Cochenour in the Red Lake district, still under construction, continue to progress at a steady rate. It is expected that Eleonore and Cochenour will reach production in 2014 and 2015, respectively.

The company hopes to begin a pre-feasibility study before the end of 2014 for its new Camino Rojo project near Penasquito, and to complete the study in the first quarter of 2016.

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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.