Thursday, February 6, 2014

A Little Shifting Around

I recently sold 2/3's of my shares of Magna International (MG.TO) @ 96 1/2. Business at MG is humming along quite nicely. Europe, which makes up 40% of their business is finally turning around. But the stock price is fast approaching my estimate of intrinsic value (raised from $50's to mid $90's), and it's time to scale this position back. I don't like holding fully valued stocks, when the market is frothy ( more downside risk ). I wrote about MG here.

I used some of the proceeds from the sale of MG to add to PWT.TO at 8 1/8. PWT is cheap and un-loved. I wrote about PWT here. This year will likely prove interesting for the Canadian oils, as several major pipeline initiatives are underway (pending approval), potentially paving the way for narrower oil differentials. Combined with a lower $CAD and reduced capital spending by the oils, the Canadian oils may finally attract some attention by the market.

I expect 2014 to be a positive year, but no where near the +41.5% (in CAD) return of the S&P 500 in 2013. Expect volatility - but with that comes opportunity, as the past 2 weeks have shown.



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