Safe Haven With Canadian Stocks: Investors Seeking Diversification Away From US Dollar Find Growth And Value North Of The Border

• On 11:14 am EDT, Sunday October 25, 2009

67 WALL STREET, New York - October 25, 2009 - The Wall Street Transcript has just published its TWST Investing Strategies Report offering a timely review of the sector to serious investors and industry executives. This 34 page feature contains expert industry commentary through in-depth interviews with award winning and highly experienced Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Top-down and Bottom-up Opportunities-Active Management-Multiple Asset Allocation-Tactical Asset Allocation-Canadian Stocks-Debt/Equity Ratios-Qualitative and Quantitative Approach-Large Cap Opportunistic Value-Low Valuation-Sustainability of Return-Price-to-Earnings-Price-to-Book Value Basis-Uncovering Compelling Values-High Returns on Investment

Companies include: Agrium (AGU); Airgas (ARG); American Express (AXP); Anadarko Petroleum (APC); Analog Devices (ADI); Avnet (AVT); BCE Inc. (BCE); Bank of America (BAC); Bank of Montreal (BMO); Broadcom (BRCM); CVS Caremark (CVS); Canadian National Railway (CNI); Chevron (CVX); Cisco (CSCO); Conoco (COP); Devon Energy (DVN); Disney (DIS); Enbridge (ENB); Garmin (GRMN); Genzyme (GENZ); Johnson Controls (JCI); McKesson (MCK); Medtronic (MDT); Mettler-Toledo (MTD); Microsoft (MSFT); Monster Worldwide (MWW); Morgan Stanley (MS); Mosaic Corp (MOS); Novellus (NVLS); Omnicare (OCR); Potash Corp of Saskatchewan (POT); Shoppers Drug Mart (SC); Tim Hortons (THI); Time Warner (TWX); TransAlta (TAC); TransCanada (TRP); Tyco International (TYC); Valero (VLO); Wal-Mart (WMT); Walgreen's (WAG); Wendy's (WEN); Western Union (WU); Yahoo! (YHOO); Zimmer (ZMH); asterCard (MA); eBay (EBAY).

In the following brief excerpt from just one of the in depth articles in the 34 page report, a top tier Canadian fund manager discusses the outlook for the sector and for investors.

NEIL WICKHAM, President of Wickham Investment Counsel Inc., has extensive experience as an investment Portfolio Manager with two of the largest Canadian trust companies, having managed portfolios for individuals, estates and trusts, foundations, pension funds, corporations, and charitable organizations. Prior to becoming PortfolioManager in January 1992, he had more than 23 years of experience with stock brokerage firms (including two firms as Vice President), as an investment Research Analyst and as an investment research department manager. Mr. Wickham has worked on a variety of corporate financing projects with several major Canadian stock/securities brokerage firms. He has earned his Chartered Financial Analyst designation. He has also been very involved in a national charitable organization for 25 years, on the local, provincial, and national levels.

TWST: Would you take us through your selection process and discuss what criteria you look for in value stocks with a growth orientation?

Mr. Wickham: I think I probably went through this last year and the year before in my comments, but the essential process hasn't changed a lot. We've become a little more sophisticated in what we do. In the last year, we have added some levels of sophistication to our valuation process. We use a data service that provides us with core data on most of the stocks listed on the Toronto Stock Exchange. We have always used free cash flow return on enterprise value as a key measure of value. Free cash flow is essentially earnings plus depreciation less committed expenses. So, the free cash flow, that number as a percentage return on market cap, which is stock price times the number of shares plus corporate debt, you add that together. The free cash flow as a percentage of enterprise value is our key statistical measure. We also use a bunch of others like debt/equity ratios, debt coverage, average growth over a five-year period, average growth expected, and a whole bunch of other things. There are about 15 or 16 core measures that we use. The other thing, which is even more important, is we run about 650 stocks on those statistics and we only select from the top part of the list that those statistics give us in relation to specific industries that we like. We would look for the best oil stocks in terms of those statistics, but also in the oil and gas business we look for things like new fields, rising production capabilities, a look at management, have they been any good in the past or do we think they're good going forward. Those are almost immeasurable things but those are the things that are the most important and the hardest to measure. You have to look at management in any business when you look at it and that's one of the key things for us too. We look for other kinds of information as well. We like, for example, Shoppers Drug Mart (SC), which is one of my favorite stocks. It's a Canadian drugstore company. I think the demographics today say that how can you go wrong in a drugstore company if it's properly operated and I think that's true in Canada and it's also true in the United States. We own some CVS Caremark (CVS) in the American side and we own some Shoppers in the Canadian side. Those in my view are probably two of the best drugstore chains in North America. Those are the kinds of things we like to look at. Is the industry right for what we want to do.

TWST: What about the composition of your portfolio, are they mostly large-cap stocks or are you an all-cap investor?

Mr. Wickham: They're mostly large-cap. We do a bit of mid-cap stuff but we tend not to do any small-caps. However when I say mid-cap, the Canadian market obviously is much smaller than the US market so Canadian mid-caps are probably equivalent to US small-caps. We look at an oil stock like Petrobank, which is a mid-cap. It's been a spectacular performer and it's one that we really like in the mid-cap sector.

The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 34 page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online .

The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.

For Information on subscribing to The Wall Street Transcript, please call 800/246-7673

Buzz up!