Canadian stocks rated by Iain Fraser

The TSX is lagging New York

Now what? The Dow and the S&P 500 keep going to new highs but not the TSX. The reason we are behind of course, is some trouble in the commodity sectors. Gold is up but black gold is down; nickel is up but copper has fallen apart. We have two comments to make.

The first one is that it is very risky to try and figure what these commodity prices are going to be 3 months from now. We prefer to stick with the charts; there has been an upside breakout in nickel; gold is right at the breakout point; crude oil has broken down.

Our second point is that the heaviest weighted single sector on the TSX is the financial sector, and there is little or no trouble with the banks. As far as we are concerned the big two insurance stocks; Manulife and Sunlife; are excessively undervalued and technically in the right position, right now. For more on this get our latest Report (number 6); free and no obligation: fraserratings@yahoo.ca

Let's sell Alberta

Let's sell Alberta. We have already sold the Sudbury basin, one of the richest nickel, copper deposits in the world. We sold Sudbury to the Swiss and Brazil. Now the rumour is we are going to sell Nexen to France. How about selling CNQ to Iraq ? It seems that Canada has accepted that it is a global economy and therefore our natural resources are available to any outsider. In a few years the TSX may have shrunk to trading a few stocks like Loblaws and BCE. Maybe not even our banks are sacrosanct.

CIBC--big news !

There is a Report on the street that CIBC's earnings are estimated to go up 16% this year. Gazooks ! Does this mean the other big banks will also have a big year; could be.

Some months ago we said the technical target for CIBC was $104 to $114; the stock is working its way up to this range.

crude oil--look out !

Today crude traded close to  $50.00. Some big name analysts thought $52.00 was the low.

As we se it the odds are 3 to1 or 4 to 1 that crude is going down into the $40.00's; this is good for just about everyone excepts the oil companies.

Nasdaq 100

In some cases it has taken 7 years for some technology stocks just to get out of the swamp. They are still a long way down from where they were but at least they are showing a little bit of life.

The facts are that on our model many of them are now undervalued, and some are substantially undervalued.

The Nasdaq 100 to us looks like it can outperform the S&P/TSX Composite in the next 12 months.

crude oil-trouble

The price of crude is now at, or close to, $53.50. Crude has found support at $55.00 on two previous occasions; but not this time. From the chart point of view this is an unfavourable event.

Stocks for 2007 !

Our forte is undervalued stocks; we have one Canadian and one U.S. stock that are top picks for 2007.

On the Canadian side our top pick is Sun Life Financial ($47.75). This company is one of the old time blue chip stocks. Our rating number is a very desirable 0.79 and this stock is excessively undervalued.

On the U.S. side we have another blue chip life insurance stock; American International Group ($71.00) which has an even better rating at 0.75.

We have liked insurance stocks for several years and so has the market. The bottom line is that just about every parent in the world needs life insurance; there are billions of customers out there.