Covestor model manager Robert Gay of Global Equity Analytics and Research Services (GEARS) runs his Bluenose model as a Canadian dollar model. He invests in Canadian companies that are listed on exchanges in the U.S. He then looks at the individual stocks in terms of their longevity and recent improvement in the company’s growth.
One of the top positions in the Bluenose model is EnCana Corp (NYSE:ECA). ECA is an oil exploration, development, production and marketing company that searches for oil in Canada as well as the United States. Their net tangible assets have grown over the past three years. They have a very low price to earnings ratio and their price to earnings and price to book are also low. With the current crisis in the gulf, it is difficult to know what the future holds for oil exploration and development. As environmentalists further their message of renewable energy and the world population explodes, it could spell trouble or continued success for companies like EnCana.
Another position that looms large in the model is Agrium Inc (NYSE:AGU). AGU is an agriculture supply, product and service producer. Unlike ECA, AGU’s net assets declines in 2009 but their net income grew substantially. They have a relatively high price to earnings ratio compared to competitors but their price to sales is attractive. Their work creating fungicides and pesticides may go far in keeping them in the forefront of the industry.