How To Invest
In addition, Pat thinks then beginner investors should cultivate two important qualities: a healthy sense of skepticism and patience.
Investors should approach all investments with a healthy sense of skepticism. This can help keep you out of fraudulent stocks that masquerade as high-quality stocks. It will also keep you out of legally operated, but poorly managed, companies that promise more than they can possibly deliver.
If you are a new investor, you should also realize that losing patience can cause you to sell your best choices right before a big rise. All too often, investors buy a promising stock just as it enters a period of price stagnation. Even the best-performing stocks run into these unpredictable phases from time to time. They move mainly sideways in a wide range for months or years before their next big rise begins. (Stock brokers often refer to these stocks as “dead money.”)
If you lack patience, you run a big risk of selling your best choices in the midst of one of these phases, prior to the next big move upward. If you lose patience and sell, you are particularly likely to do so in the low end of the trading range, when stock prices have weakened and confidence in the stock has waned.
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Heavy equipment distributor Toromont Industries Ltd. completed the spinoff of its natural gas equipment division, Enerflex Ltd., in July 2011. Shareholders received shares of the new Toromont and shares of Enerflex. Here is our latest report on these two Canadian stocks which we follow in our advisory for more aggressive investing, Stock Pickers Digest....
GLOBAL X COPPER MINERS ETF $9.36 (New York symbol COPX; buy or sell through brokers; www.globalxfunds.com) tracks the Solactive Global Copper Miners Index, which includes 20 to 40 international companies that mine, refine or explore for copper. Germany-based Structured Solutions AG created this index.
Canadian firms make up 46.1% of the fund’s holdings. It also includes companies based in Australia (7.3%), Poland (4.3%), Peru (4.8%) and Mexico (4.4%). Global X Copper Miners ETF’s MER is 0.65%.
Its top 10 holdings are Capstone Mining at 5.5%; Freeport Copper, 5.7%; Vendanta Resources, 5.6%; Imperial Metals, 5.6%; Lundin Mining, 5.5%; Jiangxi Copper Company, 5.4%; First Quantum Minerals, 5.3%; Taseko Mines, 5.3%; Antofagasta plc, 5.2%; and Turquoise Hill Resources, 5.2%.
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Canadian firms make up 46.1% of the fund’s holdings. It also includes companies based in Australia (7.3%), Poland (4.3%), Peru (4.8%) and Mexico (4.4%). Global X Copper Miners ETF’s MER is 0.65%.
Its top 10 holdings are Capstone Mining at 5.5%; Freeport Copper, 5.7%; Vendanta Resources, 5.6%; Imperial Metals, 5.6%; Lundin Mining, 5.5%; Jiangxi Copper Company, 5.4%; First Quantum Minerals, 5.3%; Taseko Mines, 5.3%; Antofagasta plc, 5.2%; and Turquoise Hill Resources, 5.2%.
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GLOBAL X SILVER MINERS ETF $15.30 (New York symbol SIL; buy or sell through brokers; www.globalxfunds.com) tracks the Solactive Global Silver Miners Index.
This index includes 30 international companies that mine, refine or explore for silver. Germany-based Structured Solutions AG developed the Global X Silver Miners Index.
Canadian companies make up 56.2% of the fund’s holdings, but it also includes miners based in the U.S. (16.2%) and Mexico (10.4%). The fund’s MER is 0.65%.
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This index includes 30 international companies that mine, refine or explore for silver. Germany-based Structured Solutions AG developed the Global X Silver Miners Index.
Canadian companies make up 56.2% of the fund’s holdings, but it also includes miners based in the U.S. (16.2%) and Mexico (10.4%). The fund’s MER is 0.65%.
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ISHARES S&P/TSX GLOBAL GOLD INDEX FUND $12.52 (Toronto symbol XGD; buy or sell through brokers; ca.ishares.com) aims to mirror the performance of the S&P/TSX Global Gold Index.
This index is made up of 49 gold stocks from Canada and around the world. The fund’s MER is 0.60%. iShares S&P/TSX Global Gold Index Fund began trading on March 23, 2001.
The fund’s top 10 holdings are Goldcorp at 16.7%; Barrick Gold, 13.3%; Newmont Mining, 11.0%; Yamana Gold, 6.0%; Randgold Resources (ADR), 5.0%; Franco Nevada, 4.7%; Kinross, 4.4%; Eldorado Gold, 4.2%; Agnico-Eagle Mines, 3.6%; and AngloGold Ashanti (ADR), 3.6%.
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This index is made up of 49 gold stocks from Canada and around the world. The fund’s MER is 0.60%. iShares S&P/TSX Global Gold Index Fund began trading on March 23, 2001.
The fund’s top 10 holdings are Goldcorp at 16.7%; Barrick Gold, 13.3%; Newmont Mining, 11.0%; Yamana Gold, 6.0%; Randgold Resources (ADR), 5.0%; Franco Nevada, 4.7%; Kinross, 4.4%; Eldorado Gold, 4.2%; Agnico-Eagle Mines, 3.6%; and AngloGold Ashanti (ADR), 3.6%.
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IMPERIAL OIL $44.62 (Toronto symbol IMO; Shares outstanding: 847.6 million; Market cap: $38.0 billion; TSINetwork Rating: Average; Div. yield: 1.1%; www.imperialoil.ca) has teamed up with its parent, ExxonMobil (New York symbol XOM), to buy 226,000 acres of undeveloped oil sands properties near Fort McMurray, Alberta. (Exxon owns 69.9% of Imperial.)
Imperial will hold 27.5% of these properties, while Exxon will own the remaining 72.5%. Imperial’s share of the $751-million cost is $206.5 million. That’s equal to 63% of the $327 million, or $0.38 a share, that the company earned in the second quarter of 2013.
Purchases like this will help Imperial achieve its goal of raising its daily production from 276,000 barrels of oil equivalent (including gas) in the latest quarter to 600,000 barrels by 2020.
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Imperial will hold 27.5% of these properties, while Exxon will own the remaining 72.5%. Imperial’s share of the $751-million cost is $206.5 million. That’s equal to 63% of the $327 million, or $0.38 a share, that the company earned in the second quarter of 2013.
Purchases like this will help Imperial achieve its goal of raising its daily production from 276,000 barrels of oil equivalent (including gas) in the latest quarter to 600,000 barrels by 2020.
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PENN WEST PETROLEUM $11.75 (Toronto symbol PWT; Shares outstanding: 485.0 million; Market cap: $5.7 billion; TSINetwork Rating: Average; Dividend yield: 4.8%; www.pennwest.com) is one of North America’s largest oil and gas producers. Its output is 63% oil and 37% gas.
In the quarter ended June 30, 2013, Penn West’s cash flow per share was unchanged at $0.57 from a year earlier. A 14.2% fall in daily output, to 140,083 barrels of oil equivalent from 163,181, offset higher oil and gas prices.
Penn West continues to shore up its finances and take measures to boost its value after it appointed Rick George as chairman and Allan Markin as vice-chairman.
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In the quarter ended June 30, 2013, Penn West’s cash flow per share was unchanged at $0.57 from a year earlier. A 14.2% fall in daily output, to 140,083 barrels of oil equivalent from 163,181, offset higher oil and gas prices.
Penn West continues to shore up its finances and take measures to boost its value after it appointed Rick George as chairman and Allan Markin as vice-chairman.
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PEYTO EXPLORATION & DEVELOPMENT CORP. $28.10 (Toronto symbol PEY; Shares outstanding: 148.5 million; Market cap: $4.2 billion; TSINetwork Rating: Extra Risk; Dividend yield: 3.4%; www.peyto.com) produces and explores for oil and natural gas in Alberta. Its average daily production of 58,145 barrels of oil equivalent is 89% gas and 11% oil.
In the three months ended June 30, 2013, the company’s cash flow was $0.74 a share, up 57.4% from $0.47 a year earlier. That’s because Peyto increased its production by 40.6% from the yearearlier quarter, and natural gas prices rose.
The stock trades at 9.1 times Peyto’s forecast 2013 cash flow of $3.12 a share. The company’s long-term debt of $750 million is a low 17.9% of its $4.2-billion market cap.
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In the three months ended June 30, 2013, the company’s cash flow was $0.74 a share, up 57.4% from $0.47 a year earlier. That’s because Peyto increased its production by 40.6% from the yearearlier quarter, and natural gas prices rose.
The stock trades at 9.1 times Peyto’s forecast 2013 cash flow of $3.12 a share. The company’s long-term debt of $750 million is a low 17.9% of its $4.2-billion market cap.
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BELL ALIANT INC. $26.76 (Toronto symbol BA; Shares outstanding: 227.8 million; Market cap: $6.1 billion; TSINetwork Rating: Average; Dividend yield: 7.1%; www.aliant.ca) sells telephone services and Internet access to 2.4 million customers in Atlantic Canada and rural parts of Ontario and Quebec. It also provides wireless services through an alliance with BCE.
The company continues to replace its copperwire cables with fibre optic lines. That’s letting it sell more high-speed Internet and digital TV services, which is offsetting falling demand for land lines. (Traditional phones still supply 52% of Bell Aliant’s overall revenue.)
In the three months ended June 30, 2013, revenue rose 0.6%, to $691.8 million from $687.7 million a year ago.
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The company continues to replace its copperwire cables with fibre optic lines. That’s letting it sell more high-speed Internet and digital TV services, which is offsetting falling demand for land lines. (Traditional phones still supply 52% of Bell Aliant’s overall revenue.)
In the three months ended June 30, 2013, revenue rose 0.6%, to $691.8 million from $687.7 million a year ago.
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VANGUARD FTSE EMERGING MARKETS ETF $38.53 (New York symbol VWO; buy or sell through brokers) aims to track the FTSE Emerging Transitions Index, which is made up of common stocks of companies located in developing countries around the world. The fund has an MER of just 0.18%.
Vanguard FTSE Emerging Markets ETF’s top holdings include Taiwan Semiconductor (Taiwan: computer chips), China Mobile (China: wireless), Petroleo Brasileiro SA (Brazil: oil and gas), Vale SA (Brazil: mining), Banco Bradesco (Brazil: banking), Gazprom (Russia: gas utility), China Construction Bank, Tencent Holdings (China: Internet), Industrial & Commercial Bank of China and Cia de Bebidas das Americas (Brazil: beer and other beverages).
The $65.2-billion fund’s breakdown by country is as follows: China (20.7%), Brazil (13.7%), Taiwan (13.3%), South Africa (9.2%), India (8.7%), Russia (7.0%), Mexico (5.9%), Malaysia (5.0%), Indonesia (3.2%), Thailand (3.2%), Turkey (2.1%), Chile (2.0%), Poland (1.7%) and others (4.3%).
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Vanguard FTSE Emerging Markets ETF’s top holdings include Taiwan Semiconductor (Taiwan: computer chips), China Mobile (China: wireless), Petroleo Brasileiro SA (Brazil: oil and gas), Vale SA (Brazil: mining), Banco Bradesco (Brazil: banking), Gazprom (Russia: gas utility), China Construction Bank, Tencent Holdings (China: Internet), Industrial & Commercial Bank of China and Cia de Bebidas das Americas (Brazil: beer and other beverages).
The $65.2-billion fund’s breakdown by country is as follows: China (20.7%), Brazil (13.7%), Taiwan (13.3%), South Africa (9.2%), India (8.7%), Russia (7.0%), Mexico (5.9%), Malaysia (5.0%), Indonesia (3.2%), Thailand (3.2%), Turkey (2.1%), Chile (2.0%), Poland (1.7%) and others (4.3%).
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VANGUARD GROWTH ETF $82.43 (New York symbol VUG; buy or sell through brokers) aims to track the CRSP U.S. Large Cap Growth Index, a broadly diversified index that mainly consists of shares of large U.S. companies. The fund’s MER is just 0.10%.
The $32.6-billion Vanguard Growth ETF’s top holdings are Apple, IBM, Google, Coca-Cola, Philip Morris International, Oracle, Comcast, Qualcomm and Intel.
The fund’s breakdown by industry is as follows: Technology (26.1%), Consumer Services (20.9%), Financials (12.0%), Consumer Goods (10.6%), Industrials (11.5%), Health Care (9.3%), Oil and Gas (7.2%), Materials (1.6%), Telecommunication Services (0.4%) and Utilities (0.4%).
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The $32.6-billion Vanguard Growth ETF’s top holdings are Apple, IBM, Google, Coca-Cola, Philip Morris International, Oracle, Comcast, Qualcomm and Intel.
The fund’s breakdown by industry is as follows: Technology (26.1%), Consumer Services (20.9%), Financials (12.0%), Consumer Goods (10.6%), Industrials (11.5%), Health Care (9.3%), Oil and Gas (7.2%), Materials (1.6%), Telecommunication Services (0.4%) and Utilities (0.4%).
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