UBS Updates Its 12 Stock Portfolio

Bring on the laggards, says UBS' strategist George Vasic.

In his latest report, Mr. Vasic told clients to take advantage of the S&P/TSX composite index's 20% rise in value over the past month, by replacing two of the stars in the recent rally with a couple of stocks whose best days are still ahead of them.

"As Teck-Cominco (TCK) has more than doubled over the last month, we are replacing it with Potash Corp. of Saskatchewan (POT), which is up by a lesser 22% and still has 25% upside potential [based on UBS analyst Brian MacArthur's price target]," he wrote.

"We are replacing Canadian Tire (CDNTF.PK) (up 16% with 19% upside potential to Vishal Shreedhar’s target) in favour of Shoppers Drug Mart (SHDMF.PK), which has increased just 2% with 30% upside potential to his target."

Mr. Vasic made one more change to his 12-stock portfolio, adding Petro Canada (PCZ) in favour of Suncor Energy Inc. (SU), based on advice from analyst Andrew Potter.

Mr. Potter believes there is the potential for incremental returns in buying Suncor through Petro-Canada in the wake of their proposed business combination," Mr. Vasic wrote.

The updated 12-stock list consists of Bank of Nova Scotia (BNS), Bombardier Inc (BDRAF.PK), EnCana Corp. (ECA), Goldcorp Inc. (GG), Petro-Canada., Potash Corp of Saskatchewan Inc., Research In Motion Ltd. (RIMM), Royal Bank of Canada (RY), Shoppers Drug Mart Corp., Tim Hortons Inc. (THI), Toronto-Dominion Bank (TD), and TransCanada Corp. (TRP).