Chevron Corp.
New York symbol CVX, is the second-largest integrated oil company in the United States after ExxonMobil. Production accounts for about 80% of its earnings. The remaining 20% comes from refineries and retail gas stations.
ENCANA CORP. $88 (New York symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 749.7 million; Market cap: $66.0 billion; WSSF Rating: Average) produces oil and gas in Canada and the United States. Unlike Chevron (see at left), it favors unconventional production sources such as oil sands and shale gas deposits. Unconventional deposits take more time and money to bring into production, but they tend to have longer lives. Unlike regular natural gas, shale gas pools inside rock formations and does not easily flow to the surface. Gas producers use specialized techniques to release gas, such as cracking the rock with high water pressure and sand. That makes extracting shale gas about twice as expensive as production from traditional gas wells. EnCana’s daily gas output now runs to 3.7 billion cubic feet. It just bought new shale gas properties in British Columbia, Texas and Louisiana. In several years, EnCana feels each of these deposits could produce 1 billion cubic feet of gas a day....
UNITED CORPORATIONS $62 (Toronto symbol: UNC) (165 University Ave., 10th Floor, Toronto, ON M5H 3B8. 416-947-2583. Buy or sell through a broker) invests in a wide variety of average-quality to above-average quality Canadian and foreign stocks. At last report, 35.3% of the fund’s $1.0 billion portfolio was invested in Canadian equities, 23.7% in the U.S., 20.2% in Europe, 6.3% in the UK, 12.5% in Asia and 1.0% in Mexico and Latin America. The fund’s largest holdings included Bank of Nova Scotia, Royal Bank of Canada, Manulife, Talisman Energy, Algoma Central Corporation, Nexen, TransCanada Corporation, Pfizer Inc., TD Bank and Chevron....
CHEVRON CORP. $94 (New York symbol CVX; Conservative Growth Portfolio, Resources sector; Shares outstanding: 2.1 billion; Market cap: $197.4 billion; WSSF Rating: Above average) has gained just 24% since January 2008. Oil is up 40% since then. In general, oil stocks have lagged because oil prices rise or fall in response to short-term changes in oil supply or demand, which can reverse overnight. Despite the recent gains, a slowing U.S. economy could spur a large drop in oil prices. We recommend conservative investors stick to industry leaders like Chevron. Its wide sources of revenue (production, refining and retail gas stations) helps shield it from volatile oil prices....
Oil has shot up 40% since January 2008, from around $85 a barrel to nearly $120. However, many oil stocks have failed to rise along with it. For example, CHEVRON CORP. $94 (New York symbol CVX; Conservative Growth Portfolio, Resources sector; Shares outstanding: 2.1 billion; Market cap: $197.4 billion; WSSF Rating: Above average) has gained just 24% during the same time. In general, oil stocks have lagged because oil prices rise or fall in response to short-term changes in oil supply or demand, which can reverse overnight. Despite the recent gains, a slowing U.S. economy could spur a large drop in oil prices....
FIRSTSERVICE CORP. $24 (Toronto symbol FSV; SI Rating: Extra Risk) (416-960-9500; www.firstservice.com; Shares outstanding: 28.8 million; Market cap: $687.4 million) operates in the rapidly growing service sector, providing services in the following areas: commercial real estate; residential property management; integrated security services; and property improvement services. The company continues to expand profitably through acquisitions and internal growth. Both avenues still offer lots of potential for expansion in the fragmented service sector. FirstService reported 34% higher revenues in the three months ended December 31, 2007, to $502.2 million from $374.8 million a year earlier. (All figures except share price in U.S. dollars.) Excluding one time items, earnings per share rose 31.8%, to $0.29 from $0.22. Cash flow per share rose 35.3%, to $0.92 from $0.68. FirstService now trades at 6.5 times cash flow....
ECONOMIC INVESTMENT TRUST $81.51 (Toronto symbol: EVT) holds a well-diversified portfolio of high-quality Canadian, U.S. and foreign stocks. The $691.3 million fund’s largest holdings include E-L Financial, Algoma Central Railway, Chevron, CBS Corp., Marathon Oil, Altria Group, Dow Chemical, ConocoPhillips, Alliance SE, Arcelor Mittal, ING Groep, Vodafone Group plc, Renault, Xstrata plc and Sumitomo Mitsui Financial. The fund breaks down geographically as follows: Canada, 46.9%; the U.S., 18.6%, Europe, 19.0%, Asia, 13.8%; and Latin America, 1.2%....
J.P. MORGAN CHASE CO. $36.54, New York symbol JPM, fell 4% on Friday after it agreed to participate in an emergency loan package for troubled investment broker Bear Stearns Cos. Inc. (New York symbol BSC). J.P. Morgan will borrow funds from the Federal Reserve, and loan the money to Bear Stearns for 28 days. The Federal Reserve will guarantee the loan, so the risk to J.P. Morgan is minimal. Meanwhile, J.P. Morgan will help Bear Stearns find permanent financing. It’s possible J.P. Morgan may try to buy Bear Stearns. However, anti-trust regulators would probably block a merger. J.P. Morgan is still a buy....
S&P DEPOSITORY RECEIPTS $135 (American Exchange symbol SPY; buy or sell through brokers) are commonly called ‘Spiders’. The fund holds the stocks in the S&P 500 Index. This index is comprised of 500 major U.S. stocks chosen for market size, liquidity, and industry group representation....
We think high-quality mutual funds with a long term focus will beat indexes over long periods. If funds invest as we advise — sticking with well established companies and spreading their assets out across the five main economic sectors — they will tend to lose a lot less than the market indexes in periods when the indexes fall sharply. That’s because big market slides are particularly hard on the hottest, most popular stocks of the preceding market rise, and investing as we do leads you to avoid excessive investment in the hot stocks. Index funds, in contrast, do tend to load up on the hottest, most popular stocks as they rise. That’s because, as they rise, these stocks make up a rising proportion of the index. Index funds are a better deal than the majority of funds now available, however. So if you merely want to equal the indexes, here are some of the best deals available in ETFs. We’ve also analysed one we don’t like....
TD RESOURCE FUND $32.78 (CWA Rating: Aggressive) (TD Asset Management, P.O. Box 7500, Station A, Toronto, Ontario. M5W 1P9. 1-800-386-3757; Web ite:www.tdcanadatrust.ca. No load — deal directly with the bank) invests in companies with superior asset bases, proven management and the ability to internally finance growth. The $259.3 million TD Resource Fund’s top stock holdings are mostly of ‘Average’ quality or higher. The fund’s holdings include Suncor Energy, EnCana Corporation, Talisman Energy Inc., Timminco Ltd., Goldcorp, Yamana Gold Inc., Petro- Canada, Nexen, Alcoa, BHP Billiton, Husky Energy, Chevron Corporation, Marathon Oil Corporation, Coeur d’Alene Mines Corporation and FNX Mining Company....