Stocks we’re watching (10 Aug 2012)

Following worse-than-expected Chinese trade data released on Thursday, investors are in a risk-adverse mood. The economic data calendar for Friday is thin, it's possible trading will be also as we head into the weekend:

*Pengrowth Energy Corp., is a dividend-paying, intermediate Calgary-based oil and natural gas company, slated to report its second quarter earnings on Friday. The company recently cut its monthly cash dividend to 4 cents per common share, down from 7 cents per share. True, natural gas prices are showing improvement but they're still below 2011 levels and there's reportedly a glut of supply that in-turn doesn't bode well for natural gas stocks.

*Silvercorp Metals Inc. reported its earnings data on Thursday, as earnings fell to 5 cents per share from 15 cents per share one year ago, largely due to lower sales, higher production costs, and higher administrative expenses. SVM's revenue is down 36.2 per cent compared to the same quarter last year. The company recently acquired silver, gold, lead, and zinc mines in China, furthering its position as the primary silver producer in that country. It's also pursuing a mine in northern B.C. as a means of future growth and geographic diversification. But many analysts have cut their price target shares of SVM from a "buy" to "neutral" rating.

*Russel Metals Inc., one of the largest metals distribution companies in North America, reported its second quarter profits fell by 26 per cent, with earnings of $23 million, or 38 cents per share, on revenues of $719 million. One year ago the company reported earnings of $31 million, or 52 cents per share. Higher material costs were cited for the poor performance. The company did complete acquisitions of Siemens Laserworks and Alberta Industrial Metals during the quarter. Both of these western Canadian operations are expected to improve overall performance going forward.

*Brookfield Asset Management Inc. will report its second quarter earnings on Friday. The finance and investment management company is expected to post high earnings growth, ahead of competitors in its industry. The Toronto-based real estate company's subsidiary Brookfield Infrastructure Partners recently stated it would undertake a number of strategic initiatives including acquiring the remaining stake of the Autopista Vespucio Norte toll road in Chile, a key artery in the ring road around the capital city of Santiago with an attractive revenue framework whereby tolls escalate annually at inflation plus 3.5 per cent.

*Enerplus Corp., the Canadian oil and gas producer, saw its profits fall by 63 per cent due to weak natural gas prices in the second quarter. Net income fell to $100.3 million, or 51 cents per share, from $268 million, or $1.50 per share, a year earlier. Enerplus did raise its average production forecast for the second time in three months, expecting production to average 83,500 barrels of oil equivalent per day (boe/d), up from a prior forecast of 83,000 boe/d. But with natural gas prices falling by 46 per cent from last year, Enerplus halved its monthly dividend to 9 cents per share in June.

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