Oh, Canada! 5 Stocks for Northern Exposure
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The Fiscal Times
October 9, 2012

If you’re a U.S.-based investor contemplating Canadian stocks, the name that probably pops into your mind first this year is Research in Motion (RIMM), the (very) troubled manufacturer of the BlackBerry. But Canadian markets offer more than the occasional high technology company, or high-yielding energy royalty trust.

So far this year, the S&P/Toronto Stock Exchange Composite Index, heavy in natural resources and financials, has lagged the S&P 500 considerably, gaining about 4 percent compared with an advance of nearly 16 percent for the American index. Some of Canada’s largest companies have done a better job of keeping pace. The Royal Bank of Canada (RY) is up almost 15 percent this year, and Suncor Energy has powered 15.4 percent higher. But since Monday was Canadian Thanksgiving (yes, we do it six weeks or so earlier than our American cousins), here are a handful of Canadian stocks for which investors could still be grateful.

We’re not saying that these are all raving buys at their current prices, just that investors who have held them in recent months have found that their gains probably more than offset the cost of their Thanksgiving feasts.

1. Iamgold (NYSE: IAG) – yes, that’s really its name – is, as the name implies, in the business of extracting gold from rock. And it is doing well at it, recently announcing a 274 percent increase in likely reserves of gold at a Northern Ontario project. The stock, which also trades in Toronto under the ticker IMG, is up from a May low of $9.20 to $16.24.

2. Whistler-Blackcomb Holdings (TSE: WB) owns about 75 percent of the iconic British Columbia ski resort and the related hospitality assets. The stock price gain isn’t as impressive as that of other companies on this short list, but it’s not too shabby – it’s up at C$11.90 from C$9.30 about a year ago – but its yield of 8 percent is almost as awe-inspiring as the vistas of the Canadian Rockies from the Whistler chairlifts.

3. WestJet’s (TSE: WJA) flights will get you to Whistler – and pretty much anywhere else you want to go. With the Canadian national carrier, Air Canada, perpetually in the doldrums, WestJet has thrived, and its stock price reflects it, up at C$18 now from a 52-week low of C$10.30.

4. Gibson Energy (TSE: GEI) does pretty much everything with oil and gas except for the basic job of finding it and extracting it from the ground. Once it’s out, though, Gibson transports it (via pipelines or trucks), markets it, turns it into asphalt for roads or roofing tar and sells propane byproducts to individuals who need tanks for their camper vans or summer cottages. The stock has risen from C$17.72 a year ago to about C$23.23 today, winning it a “buy” rating from UBS.

5. DirectCash Payments (TSE:DCI) is responsible for some of those prepaid phone cards that you can find in every New York City bodega – and corner stores across North America. It also owns operates a network of ATMs. A pedestrian business, sure, but the stock is at C$25.19 today, up from a low last November of C$18.58.

These stocks provide a reminder that, in spite of Peter Lynch’s mantra to buy what you know, sometimes venturing beyond your borders when you’re investing can be worthwhile, whether you’re trying to gain more access to a specific industry, add a global leader to your portfolio, or simply diversify your holdings.

Business journalist Suzanne McGee spent more than 13 years at The Wall Street Journal before turning to freelance writing. Author of the book Chasing Goldman Sachs, she has written for Barron’s, The Financial Times, and Institutional Investor.