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We have to add the caveat that our comments above will not mean too much if the price of oil has a significant decline. At this moment just about all of our commodity stocks are prone to trouble if the commodity gets in trouble.
The second oils stock is Talisman ($ ) which is even cheaper than CNQ. At its low on Monday Talisman was selling at 3.7 times estimated 2006 cash flow. We should add that for these oil producers six times cash flow is about the acceptable standard.
In our next Report, published Tuesday May 30/06 , we show a 21 year chart of the U.S. Dollar Index. Every Canadian investor should see this chart and our comments.
This chart gives a very strong clue as to which way the Canadian dollar is likely to go ! To get our Report (free, no obligation) just send us an email at fraserratings@yahoo.ca
The TSX is made up mainly of financials and resource stocks; and both groups are falling apart in the short term. Bank of Montreal came out today with second quarter earnings and beat the estimate; and raised the dividend 17%. The stock, which was significantly down already, went down further. Imagine if they had raised the dividend 50% ? There would probably be no bid at all.
The market cannot be upset by the past or present; it has got the jitters because of the future. And does the future look this bleak ? Maybe, and maybe not.
Two months before we had Teck Cominco as a top pick at $11.99, we had Falconbridge as a top pick at $14.27. To round out the trio at that time Inco was selling at US $19.00. Our question is how come nobody wanted to buy anybody at these cheap prices? Now the stocks have tripled, quadrupled, and more there are buyers all over. The big boys are like most of us, stocks are most tempting when they go into new high ground.
On Feb.5/03 we selected Teck Cominco as a No.1 rated top pick at $11.99. We are enthused that they want to take over Inco, and they may have to take over Falconbridge; which was a No.1 rated top pick on Dec.5/02 at $14.27.
W are enthused because we want to see our natural resource companies stay, for the most part, controlled by Canadians.
In the past 3 months our bank stocks have been going down, by as much as 11%
One of them has gone down enough to now have the magical combination; the stock is substantially undervalued and has a fovouable chart pattern. To get our current Report, and more info on this bank stock, just email us at fraserratings@ yahoo.ca
Last Tuesday we put an appetizing chart of Bank of America in our Report; the stock was then $47.09. Two days later, on Thursday, a buying frenzy started, and by Friday the stock was at $49.95.
Just didn't realize that we had that much clout in New York.
