Every year, investment houses generate a list of investing ideas that they think will reward investors. RBC Capital looked for companies with a market capitalization of $2-billion or more, along with an average daily liquidity of at least $20 million. Some of the companies making the list were:
Most of the companies in the above list are Canadian-listed companies.
Magna International (MGA) shares nearly doubled in 2012. The company makes automobile parts and trades with a valuation of just 10 (price of profit). With a lack of a catalyst for higher demand for automobiles, investors should not expect significant upside with Magna.
Companies with a large market capitalization are telecom company Telus (TU), TD Bank (TD), and Valeant Pharmaceuticals (VRX). The former two companies pay a dividend that yields 3.92% and 3.72% respectively. Valeant does not pay a dividend, but grows by acquiring companies and improving their return on equity.
Dollarama has a similar business to that of Family Dollar Stores (FDO). Both companies sell inexpensive items to thrifty consumers. Dollarama shares peaked recently at CAD $66.30 and traded recently at CAD $58.00. Family Dollar Stores also sold-off recently, pays half the dividend (by yield) but has a lower valuation.
In the real-estate sector, Brookfield Asset Management Inc. (BAM) shares are recommended by RBC. Like some of the other recommended companies, Brookfield shares are at a 52-week high.
In the resource sector, Silver Wheaton (SLW) shares traded lower in recent sessions. A loose monetary policy did not help gold or silver prices, which in turn is weighing on this company. Higher economic activity would help raise the demand for silver.
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