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Five favourite stocks of 2021 return 16 per cent - miss benchmark

Ron Walter writes about his five favourite 2021 stocks
BizWorld_withRonWalter
Bizworld by Ron Walter

The five favourite stocks selected by Bizworld column last year under performed the benchmark Toronto Stock Exchange Composite index.

The favourite five gained a respectable 16.2 per cent in value during the year, including 2.1 per cent from dividends

The TSE Composite gained 22.4 per cent as of Dec. 29 not including dividends. It was an awesome year for the TSE index.

One of two gold favoured companies lost ground and one gained.

Equinox Gold took a 37.6 per cent hit to $8.29 partly from Covid-related production declines and losses at a Mexican mine where local unions and the community blockaded access and operations several times.

Substantial rains didn’t help matters any. Equinox is still on track to produce one million ounces of gold.

New Found Gold, exploring deposits near Gander, Newfoundland, continues to report exceptional consistently high grades from drilling. The stock value was up 95.8 per cent to $8.42 and was over $12 at one point.

The big loser was Exbec Adsorption, the designer and builder of equipment to produce renewable hydrogen gas as fuel from natural gas or biogas, lost 70.6 per cent to $2.36

Exbec rose to $11.15 early in the year then dropped off a cliff when revenues fell 53 per cent and expenses rose 58 per cent.         Even though Exbec has made a couple of company changing acquisitions, share price stayed low. Investors possibly realized the market for renewable fuels is flooded with competitors.

Canadian grocer Loblaws gained 70.8 per cent as pandemic restrictions kept people from restaurants and the home stoves were turned on more than ever.

Pipeline operator Enbridge Inc. gained 19 per cent to $49.12 plus adding 8.3 per cent with a juicy dividend.

The five favourite stocks for 2022 are one repeat New Found Gold, banker BMO, retailer Pet Valu, miner HudBay Minerals and US retail service company Rent-A-Center.

New Found at $8.42 with a market value of almost $1.4 billion, has yet to come up with an estimate of gold resources. In over 50 years this Scribbler has never seen such high and consistent grade values from the drill bit.

 As part of the Canadian banking oligopoly BMO, $136.94, should do well while a recently announced acquisition doubles U.S. bank branches and gives BMO a foothold in California and the Great Plains.

Higher interest rates will increase profits.

Pet supply retailer Pet Valu, $35.07, continues to build the chain of Canadian and U.S. stores on the way to doubling store count.

HudBay, $9.16, should do well as copper production increases by nine million pounds with gold production up 15,000 ounces while costs decline.

Hudbay is a long-term investment with planned construction of three copper mines in the U.S. during the next few years.

U.S. Rent-A -Center, $49.36 US$ is opening new stores as the popularity of rent-to-own grows. Inflation should boost earnings. The company has almost 2,000 corporate and franchised stores in the U.S., Mexico and Puerto Rica.

Growth range is in the 25 per cent to 30 per cent area with an acquisition last year almost doubling revenue.

CAUTION: Remember when investing, consult your adviser and do your homework before buying any security. Bizworld does not recommend investments.

Ron Walter can be reached at ronjoy@sasktel.net

The views and opinions expressed in this article are those of the author, and do not necessarily reflect the position of this publication.