Market Call Tonight for Friday, February 3, 2017
David Cockfield, managing director and portfolio manager at Northland Wealth Management
Focus: Canadian Equities and ETFs
After an upward surge in North American equity markets after Donald Trump’s election victory, markets recently have been in a sideways pattern. While Trump has followed through on his election promises with executive orders investors are taking a ‘wait and see’ approach. It is not clear as to the support his proposals – tax cuts, simulative spending plus growing deficits will get in Congress. Trump’s approach of announcing major social and economic initiatives as a media event is somewhat unnerving for investors. For Canadians the prospect for renegotiation of US-Canadian trade pacts is particularly worrisome. Expect upcoming equity markets to be choppy but moving sideways until more clarity is available on Trump’s program.
SUN LIFE FINANCIAL (SLF.TO)
A Canadian based insurance and wealth management company. The company has made accretive acquisitions as well as growing internally. Expansion has taken the company to the US, UK and the Far East. The stock had a significant upward move late in 2016. Recently after moving sideways for three months the stock has weakened. With good growth prospects and reasonable P/E of 13 and a safe yield of 3.3 per cent the stock is a buy under $50.00. Last purchased in July 2016 at $41.02.
INTER PIPELINE (IPL.TO)
An Alberta based pipeline company that transports and stores oil and natural gas liquids in Western Canada. The company also operates three natural gas extraction facilities that produce natural gas and natural gas liquids. IPL has long term service agreements with major oil and gas producers that give the company utility characteristics. The company has had a strategy of servicing the oil sands industry which has raised concerns as oil prices declined. The recent recovery in oil prices, the potential approval of Keystone, plus significant improvement in oil sands extraction costs has improved the long term prospects for IPL. With better prospects plus a very generous yield of 5.7 per cent the stock is attractive. Last purchased in February at $28.35.
An e-commerce company based in Ottawa, the company allows merchants large and small set up online websites. Merchants can accept online payment, manage marketing and mailing lists, inventory and accounting. This sector has huge potential particularly for small vendors as it provides the structures to compete with their larger competitors. Shopify has partnered with such large firms as Facebook, Amazon, Visa and Mastercard. Last purchased in February at $68.44.
PAST PICKS: DECEMBER 4, 2015
BROOKFIELD PROPERTY PARTNERS (BPY_u.TO)
- Then: $30.00
- Now: $29.84
- Return: -0.53%
- TR: +4.60%
BMO LOW VOL U.S. EQUITY ETF (ZLU.TO)
- Then: $27.78
- Now: $29.24
- Return: +5.25%
- TR: +7.78%
SUN LIFE FINANCIAL (SLF.TO)
- Then: $44.38
- Now: $50.57
- Return: +13.94%
- TR: +18.16%
TOTAL RETURN AVERAGE: +10.18%