As we prepare to douse the flame on another Winter Olympics this weekend, we may choose to reflect fondly on them and their host country, Canada. Regardless what you may think about the sports of Ice Dancing or the Skeleton competition, stories of performance excellence and remarkable perseverance always accompany any Olympiad. Plus, more than a few of us would gladly switch fiscal positions with gold medalist Shaun White, aka “The Flying Tomato,” in 2010.
So let’s look beyond the Russian tantrums and the fact that the Olympic Village is leaving the picturesque city of Vancouver $1 billion in the hole, and get to what might be in it for us, the average investor. How is Canada these days? Surely our neighbor to the north has a choice stock pick in it somewhere? Sure it does.
Anyone with a passing knowledge about Canada knows that it is home to extraordinary natural resources — oil sands, natural gas, gold, lumber, fishing and farming. It is, after all, one of the top ten economies in the world. But the time to buy Potash (POT) or Kinross Gold (KGC) or Agrium (AGU) was a couple years ago — those stocks all have a Zacks #3 Rank these days.
Research In Motion (RIMM) is perhaps Canada’s most well-known stock, though the BlackBerry is not exactly synonymous with the Maple Leaf. Besides, Research In Motion is another stock that came back down to earth during the crash of late ’08, and hasn’t managed those lofty heights since — and has lots more competition now, too. RIMM is a Zacks #3 Rank stock, as well.
Believe it or not, resource-rich as Canada is, three-quarters of its workforce — and two-thirds of Canada’s GDP — is in the Service sector. Surprised? Time to get past it. Clearly, Canada is more than the U.S.’s Cap — it’s the U.S.’s kid brother, economically speaking.
OK, so where’s the Zacks #1 Rank Canadian stock? Here it is: Rogers Communications (RCI), Canada’s top cable TV and wireless company. Its Wireless business has a 37% market share in Canada, as well as 44% of Canadian Internet cable operations. Revenue growth was up 4% year over year in the latest quarter, and it beat Zacks’ estimate by more than $100 million, to nearly $3.1 billion.
Rogers Communications’ solid fiscal first quarter 2010 was reflected by all 11 analysts covering the stock — each one has upped fiscal 2010 estimates within the past month. Rogers has a strong recent history of posting positive earnings surprises, with an average of 25+% over the past 4 quarters.
The longer term Zacks Recommendation of Outperform was bestowed on Rogers Communications Feb. 21st, and its Zacks #1 Rank came on Feb. 24th. Even if we can’t handle a snowboard like the Flying Tomato, at least we can still get some height from diversifying into a winning Canadian stock.
Read the full analyst report on “POT”
Read the full analyst report on “KGC”
Read the full analyst report on “AGU”
Read the full analyst report on “RIMM”
Read the full analyst report on “RCI”
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