The Motley Fool

Resources Out, Defensives In

If you’ve ever wondered whether or not a stock that you own is “defensive”, there is perhaps no better litmus test than a 2% market pull-back.  In a sea of red, a handful of Canadian large-caps are actually up today – so far.

The telecom sector is holding up very well in the face of this resource related meltdown.  Shares in BCE Inc. (TSX:BCE,NYSE:BCE), Telus (TSX:T), and Rogers (TSX:RCI.B,NYSE:RCI) are all benefitting from the river of money currently rushing from the resources.  These 3 stocks are currently up 1.0%, 1.2%, and 0.7% respectively.

Also showing green are the likes of Valeant Pharmaceuticals (TSX:VRX,NYSE:VRX) and Thomson Reuters (TSX:TRI,NYSE:TRI) up 1.0% and 0.3% respectively.  Valeant is probably benefitting from its status as the go-to name in Canada’s healthcare sector.  Healthcare is typically viewed as a defensive sector in most markets, however, given Valeant’s extensive record of acquisitions and highly leveraged balance sheet, this is not your garden variety, steady-eddy healthcare stock.

The Canadian market’s exposure to risky, resource oriented stocks is on full display today.  Because of a reliance on such uncontrollable variables as Chinese GDP growth, the business model of many resource oriented companies is relatively weak.  Canadian investors however deserve to own great businesses and the U.S. market is home to some of the best in the world.  We have created a special report that identifies 3 U.S. businesses that are worthy of your hard earned investment dollars.  Simply click here to receive “3 U.S. Stocks Every Canadian Should Own” – FREE!

Follow us on Twitter and Facebook for the latest in Foolish investing.

Fool contributor Iain Butler does not own shares in any of the companies mentioned at this time.  The Motley Fool has no positions in the stocks mentioned above.

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.