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NatCan Investment Management Inc. is a management subsidiary of National Bank of Canada. The firm manages Altamira series of funds, in additional to other funds. NatCan Investment Management Inc. invests on a global basis, seeking secular growth opportunities with reasonable valuation. The firm takes on a global perspective and carries out fundamental analysis to identify attractive investments.

The investment process is driven by a bottom-up approach, targeting companies with the best business models. NatCan prefers companies operating in sectors that offer sustainable growth and low volatility. The firm places emphasis on each company's ability to generate and properly deploy free cash flow, analyzing management quality and the ability to balance profitability and growth. Investments are predominantly placed in mid and large cap companies.

The following is a list of NatCan's top buys in the December quarter as reported in their recent 13F filing with SEC.



Shares Held 09/30/2011

Shares Held 12/31/2011

Change in shares

Teck Resources Limited





Barrick Gold Corporation





Motorola Solutions Inc.





International Paper Co.





Caterpillar Inc.





I will recommend going long Teck Resources, Motorola Solutions, International Paper and Caterpillar among the above stocks. However, I would avoid Barrick Gold Corporation.

Teck Resources Limited is one of the largest integrated zinc and metallurgical coal producers in the world and is a major producer of copper. Teck's shares have a lot of positive catalysts in the near to medium term. Some of them are met coal expansion to 28 mtpa by 2013; Quinttete feasibility study; QBH feasibility study, Relincho new resource estimates, Andacollo expansion and Fort Hills oil sands project sanctioning. From the long-term perspective, Teck's exposure to coal and copper gives it a good exposure to emerging market industrialization. I will recommend buying the stock, given its long-term secular growth potential and the near- to medium-term catalysts.

Caterpillar Inc. makes earthmoving, construction and materials-handling machinery and equipment. It is also a leading manufacturer of diesel engines and turbines for transport and industrial applications, and a provider of various financial products and services.

CAT reported record quarterly results with an EPS of $2.32 against a consensus if $1.74 and increased its guidance for 2012. The solid performance seems to be driven by internal improvements and timely shift in end market focus towards China. The company highlighted the breadth of opportunity available in China and is expected to roll out its full product and service capabilities in 2012.

CAT is expected to deliver robust earnings growth in 2012 as spending levels increase in Mining and Oil & gas industry and construction equipment markets show signs of improvement. Further with production increases to match underlying demand in NA and Europe and solid mining backlog, I am optimistic on CAT's near-term performance.

International Paper Company is a global paper and packaging company, with markets and manufacturing operations in North America, Europe, Latin America, Russia, Asia and North Africa. I expect strong North American paperboard prices going forward due to industry consolidation from IP's merger with Temple-Inland. I would recommend buying the stock from a 1-2 years perspective.

Motorola Solutions, Inc. provides business and mission critical communication products and services for enterprise and government customers worldwide. The company's portfolio includes wireless and sets, wireless accessories, digital entertainment devices, wireless access systems, voice and data communications systems, and enterprise mobility products.

Motorola reported strong Q4 results with an EPS of $0.87 against consensus estimate of $0.81. Revenue growth of 5% was driven by Government with NA, Latin America and APAC regions showing improving trends. Government business revenue grew by 6.4% y-y with improved margins as there was no evidence of reduced state budget slowdown.

I believe Motorola is a defensive stock due to the mission-critical nature of its products. I don't think weakened government spending will affect its revenues. In the short term, Motorola's buyback program will continue to support the stock. In the long term, the company is in a strong position to participate in Long Term Evolution public safety deployments in the US and international markets.

Barrick Gold Corporation is engaged in the production and sale of gold, as well as related activities, such as exploration and mine development. Barrick Gold's shares are almost fully valued and trading at a premium to its peers. With relatively flat production profile expected over the next few years, I don't think the company's premium valuations are justified. Also, I am not a gold bull now, and would recommend avoiding the stock.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 4 Potential Longs From NatCan's Top Buys, 1 To Avoid