Canadian Stocks – Practicing What It Preaches It’s actually quite suiting that some of the most exciting Canadian stocks are those in the resource sector. Canada is abundantly rich in natural resources. In recent times, the Canadian tar sands have been much talked about. This is even moreso true as oil prices increase and confidence in various supplies wanes. The tar sands are said to be the second largest reserve of crude oil in the world. Only Saudi Arabia reportedly has more oil reserves. As a result, it should come as no surprise that Canada is the greatest foreign supplier of oil to the Unites States. And they can easily outpace something like a gold ETF tied to physical bullion. Apart from oil, Canada boasts vast quantities of other key resources. Canada produces more uranium than any other country on Earth. It also has strict reinforcement measures to help ensure that all the uranium it sells is used for power generation, which seems to “complete” the resource cycle. Adding to its diversity, Canada also tops the list as the greatest producer of fertilizer for agricultural purposes. In times like these, key agricultural ingredients, such as potash, are highly sought after commodities. In addition to these remarkable number one rankings, Canada also places in the top ten for other key resources. For instance, and not surprisingly since half of all mining companies are traded there, this massive country produces huge quantities of gold, copper, nickel, aluminum, and zinc. In fact, the Yukon is a fast-growing region of serious attention for a fleet of mining companies looking to exploit the great deposits there. Diamonds are also mined in notable quantities. On top of all the oil, you’ll also find natural gas. Lumber is produced is sizeable quantities. And you’ll also find Canada dipping its toe in agriculture with big wheat harvests. Canadian Stocks And How Rich Rewards Await Early Arrivals Junior resource companies offer a fascinating feature that primes them to be superior investments. Efficient Market Hypothesis theory anticipates that all known information about a given company is already factored into the share price. In other words, notice of impending patent application approvals, FDA approval, greater than expected earnings, and so on are already priced into a company. As a result, you cannot wait for the news to happen, because it’s priced into the stock from the moment it is known to be anticipated. However, particularly with Canadian stocks in the junior resource sector, these companies are so small that they are off the radar of the prying eyes of multitudes of analysts and money managers. See, even if the fund managers took a big position in such a company, they are so small that it could be hard to liquidate a massive position. What this means is that you can often find solid companies that are mostly undiscovered, in comparison to something like popular silver ETF funds. These hidden jewels can be chronically on sale, with a share price below what the company is actually worth. In fact, there have even been Canadian stocks selling for less than the actual cash on the books.

This entry was posted on Monday, January 9th, 2012 at 8:14 pm and is filed under . You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.