Latest Stock Advice
Nutrien Ltd. offers exposure to potash and nitrogen prices, a stable retail base and strong profitability.
Toromont Industries Ltd. should see continued earnings growth thanks to its leading market share and Canada’s plan to increase spending on infrastructure projects.
Top pick Barrick Mining just raised its dividend a whopping 140% as it generates record earnings and continues its strategic asset reorganization.
Warner Music Group Corp. is well-positioned for higher-margin catalog revenues, added streaming adoption, and new AI monetization opportunities.
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The Bank of Canada is unlikely to raise interest rates any time soon. That’s because low prices for oil and other commodities will likely continue to offset higher exports due to a low Canadian dollar, as well as increased government spending. Even so, the long-term outlook is for higher interest rates. That’s because heavy deficit spending and the expansion of the money supply in the past few years make higher inflation more likely. We continue to advise against investing in bonds right now. That’s because today’s low interest rates make bonds unattractive, and rising rates would push down their future value....
TORSTAR $1.76 (Toronto symbol TS.B; Shares outstanding: 79.9 million; Market cap: $127.3 million; TSINetwork Rating: Average; Dividend yield: 14.8%; www.torstar.com) launched a digital version of The Toronto Star, its flagship newspaper, for tablet computers in September 2015. So far, Star Touch has attracted over 65,000 weekly and 26,000 daily users. The company spent $14 million in 2015 to set up Star Touch, and will spend another $10 million this year. It expects Star Touch will break even in 2017. Torstar is still a buy.
PENN WEST $1.17 (Toronto symbol PWT; Shs. o/s: 502.2 million; Market cap: $582.5 million; TSINetwork Rating: Speculative; No dividends paid; www.pennwest.com) has sold oilproducing properties worth over $1 billion since the start of 2015. Even so, its debt is still a very high $1.9 billion, or 3.3 times its market cap. In the three months ended December 31, 2015, Penn West’s production fell 20.3%, to an average of 77,398 barrels per day from 97,143. Cash flow per share fell sharply, to just $7.0 million, or $0.01 a share, from $137.0 million, or $0.28 a share. Penn West may still need to sell more assets to meet scheduled debt repayments. But without significantly higher oil and gas prices, those sales will further cut its already low cash flow....
ENCANA $7.75 (Toronto symbol ECA; Shares outstanding: 849.8 million; Market cap: $6.4 billion; TSINetwork Rating: Average; Dividend yield: 1.1%; www.encana.com) continues to focus on its four key projects: Montney (B.C.), Duvernay (Alberta) and Eagle Ford and Permian (both in Texas). These fields produce large amounts of oil and natural gas liquids such as propane and butane. The company is now using its excess cash to pay down debt. That’s because Encana’s bonds are trading well below their face value due to weak oil and natural gas prices. Encana will now repurchase up to $400.0 million of those bonds by April 12, 2016 (all amounts except share price and market cap in U.S. dollars). That’s up from its earlier goal of $250.0 million....