Blogs

When mining engineer Bruce McLeod took the helm at Nunavut gold play Sabina Gold and Silver (SBB) in mid-February, he promptly bought 36,500 shares in the public market at 39 cents.

Like many junior gold stocks, Sabina has been pummelled on the Toronto Stock Exchange, falling from highs above $7 in 2011. Unlike most, Sabina has a resource estimate exceeding 5 million ounces of high-grade gold in the measured and indicated categories.

Earlier this week we wrote "Here comes the changing of the guard" reflecting our sense that insiders are favouring cyclical over defensive names. That theme is being put to the test in light of today's negative GDP numbers in both Canada and the U.S. As of mid-day, cyclical and reflation-oriented stocks are holding up rather well. On a combined basis, the Materials Select Sector SPDR (XLB*US) and Energy Select Sector SPDR (XLE*US) ETFs are outperforming the broad market SPDR S&P 500 Trust (SPY*US) ETF.

What are we looking for?

Looking at all the stocks on the TSX, we want to screen for the highest ranking REITs. Rankings are determined by the INK Edge V.I.P. criteria (valuations, insider commitment and price momentum). This is the same approach we apply across the broad market to determine membership for the INK Canadian insider index, which is used by the Horizons Canadian Insider Index ETF (HII-TSX).

As we head towards summer, tourists to Ottawa can look forward to the daily red coat changing of the guard ceremony on Parliament Hill. For Canadians, it is a must see. We give our nation's capital a nod this morning, not to recognize the pre-election vote-buying in Parliament by both the government (seniors-focused giveaways) and the opposition (millennial-focused giveaways). Instead, we would be remiss not to acknowledge another milestone achieved by Ottawa-based entrepreneurs, this time at Shopify (SH).

Sean Roosen wasted no time establishing a gold royalty powerhouse, Osisko Gold Royalties (OR), last year after selling his Osisko Mining and its Malartic gold mine in Quebec to a Yamana Gold (YRI)/Agnico Eagle (AEM) consortium for $3.9 billion.

The Osisko Gold Royalties chairman and CEO added another prize royalty with the friendly takeover of Quebec-focused Virginia Mines. That deal gave Osisko a 2-3.5% NSR on Goldcorp's Eleonore mine in Quebec, which recently went into commercial production.

In our last piece, we shared our bullish view on the stock market and highlighted the iShares Russell Microcap (IWC*US) chart. Since that time the index has shaken out investors and bullishly powered back above its 50 day moving average. The microcap index finds itself again trading near all time highs. What’s impressive about this move is it's happened with the pessimistic investor sentiment rolling across Wall Street and Twitter like a smoldering tumbleweed in a post-apocalyptic Mad Max movie.

It never ceases to amaze us how much attention is given to consumer sentiment surveys south of the border. On Friday, a widely followed sentiment survey was released that indicated American consumer sentiment had dropped. Only a month ago that same survey indicated that consumer confidence was soaring, hitting its second highest point since 2007 according to Business Insider. More remarkably, this same survey hit an 11-year high in January of this year according to Thomson Reuters.

Move over real estate, insiders appear to be setting up for a long-rate rebound. REITs and other defensive stocks such as utilities lost ground in the semi-annual rebalancing of the 50-stock INK Canadian Insider (CIN) Index. Taking their place is a mix of resource and economically-sensitive industrial stocks.

Can two of Canada’s best known billionaires be on to something? Investors may learn more when Just Energy Group (JE) releases year-end results next Friday, May 14th, after the market closes.

Shares of Just Energy have been in the penalty box for years. Volatile prices for energy, notably natural gas and electricity, played havoc on margins at the wholesaler, whose army of door-knocking sales representatives offer homeowners long-term fixed price contracts for home heating fuel and related services.