Friday, March 1, 2013

Trouble Finding Canadian Companies to Buy

After receiving my year-end bonus from work last week, I have been looking for Canadian companies to add to my portfolio.  Despite going through the names on my watch list portfolio (about 20 companies I keep an eye on), two screens I have set up in CapitalIQ to identify reasonably priced dividend growers, and my current holdings, I haven’t found any companies that have caused me to pull the trigger and invest this week. Even though I realize that keeping a little extra cash to take advantages of market over-reactions is not a bad thing, I still feel down about not finding any Canadian companies to invest in or add more to my holdings.

I’ve read lately about a run-up in prices of shares of dividend paying companies. Although I appreciate the valuation of my investment holdings is up substantially in the first two months of 2013, I’m not crazy about buying stocks in this type of market.  Between an influx of money into the market (especially in ETFs, which tend to invest in the types of stable, large cap companies I like), individual investors buying dividend growers in their search for yield, and some dividend increases from the big names lately (BMO, TD, TransCanada, Enbridge, etc.), it seems like a perfect storm for dividend stocks. On the other hand, when I look at potential US stocks…I see a lot of opportunity. I’m thinking of selling the shares I own in Dundee REIT (down a bit lately, but still run-up past the point of logic) in my RRSP to take advantage of some bargains I see in the US markets. In particular, I’m really fond of Coca-Cola lately (if only it would dip again so I could buy it with a 3% dividend yield) and would also consider adding to my positions in Microsoft and Pfizer if I could catch a dip in either company.

On the Canadian side of things, to be fair, I still think a couple of stocks don’t look bad; I just don’t like the idea of buying a stock near its 52-week high.  Laurentian Bank, Shaw, and Corus Entertainment are all at the top of my watch list.  I’m hoping for a market over-reaction to bump them down long enough for me to load up on them. 

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