3 Stocks to Watch This Week

Key company results that will set the tone for the week.

| More on:
The Motley Fool
You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

The Toronto Stock Exchange 300 Composite Index (^GSPTSE) ended last week slightly higher after it lost some of its earlier gains during the last two trading days. The gain so far this year has been 6.7% with 75% of the stocks in the index posting a positive return.

Some big names are noticeable among the bottom-ranked performers including Bombardier and Rogers Communications, but the worst performer was Westport Innovations, which is down by 31% so far this year. The top of the pile belongs almost exclusively to the gold miners and the energy companies.

The results season will pick up further steam this week and we have selected some of the highlights below.

Suncor Energy (TSX: SU)(NYSE: SU) will report quarterly results on Monday. The market consensus expectation is a profit of $0.93 per share compared to $0.90 a year ago. Management estimates crude production will remain flat in in 2014 compared to 2013 at between 525,000 and 570,000 barrels daily while oil sands production is expected to increase by more than 10% to between 400,000 to 430,000 barrels per day.

Suncor’s share price lagged the Canadian oil and gas producers so far this year, most probably as a result of its low exposure to natural gas production. However, shareholders will be expecting substantial benefits in the form of increased dividends and share buybacks over the medium term as ongoing capital investment actions and productivity improvement actions start to deliver results in the form of higher profits and free cash flow.

Thomson Reuters (TSE: TRI)(NYSE: TRI) is expected to report unchanged profits per share of U.S. $0.38 for the first quarter on Wednesday. The largest division in the company (Financial and Risk) has been undergoing a major restructuring over the past 18 months with significant “simplification” charges regularly flowing through the income statement. Further charges of U.S. $120 million will continue to dampen profits in 2014.

The company expects the corrective measures taken in 2012-13 to provide U.S. $300 million of ongoing savings by 2015, which will support a considerable improvement in the gross profit margin of the Financial and Risk division to around 30% by 2015.

Thomson Reuters regularly buys back shares and continues to pay an attractive dividend and the share price also performed reasonably well over the past year (+13%). However, at some point investors may start to lose patience with the ongoing “work in progress” reports and demand real, visible results.

On Wednesday, Barrick Gold (TSX: ABX)(NYSE: ABX) is expected to report a profit per share of around U.S. $0.23 compared to $0.92 for the same quarter last year. The average gold price for the quarter was down by more 20%, production should be somewhat lower and cash production cost a little higher – this will explain the sharply lower expected profits.

The company has been struggling over the past year with the share price down by almost 50% since the early part of 2013. Recent talks of a merger with Newmont have not as yet materialised and a class action law suit has recently been filed in Canada against the company and some of its officers for allegedly misrepresenting the status of the now halted Pascua-Lama mining project in Chile and Argentina. Shareholders continue to live in hope.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Deon Vernooy holds shares in Thomson Reuters. The Motley Fool owns shares of Westport Innovations.

More on Investing

Workers use a microscope to do medical research in a modern laboratory.
Investing

Is Now the Time to Buy Health Care Stocks?

Health care stocks are on the up, but does that mean you should go ahead and buy anything? In short:…

Read more »

Volatile market, stock volatility
Investing

2 Volatile Stocks to Hold for a Decade

The market is full of opportunities for investors. But does that opportunity include some volatile stocks to hold?

Read more »

Arrowings ascending on a chalkboard
Investing

1 Under-the-Radar U.S. Stock to Buy in August

Canadians on the hunt for an undervalued and under-the-radar U.S. stock should consider Match Group Inc.

Read more »

Woman has an idea
Dividend Stocks

2 Low-Risk Growth Stocks Paying Great Dividends

These top TSX dividend stocks give investors exposure to interesting growth opportunities.

Read more »

A person builds a rock tower on a beach.
Dividend Stocks

Got $300? 2 Simple TSX Stocks to Buy Right Now

These two simple TSX stocks have everything a long-term investor looking to dollar cost average into a position wants right…

Read more »

A golden egg in a nest
Dividend Stocks

Millennials: No Excuses! Start Saving for Retirement Right Now.

Millennials, we need to stop complaining and start bragging. We're great savers, so it's time to start investing in TSX…

Read more »

Value for money
Dividend Stocks

3 UNDERVALUED TSX Stocks to Buy in August

Here are some attractively valued TSX stocks for the long term.

Read more »

A young man throwing and catching his daughter above his head
Dividend Stocks

Parents: Double Your CCB Payments This Month!

Parents can use those CCB payments to their benefit and double them this year month after month -- no waiting,…

Read more »