Canadian Investors Seeing Red

Another rough day for the Materials space. Starting to sound familiar.

Iain Butler

Chief Investment Advisor, Motley Fool Canada Fool since November 2012 Iain Butler, CFA, is Lead Advisor on Discovery Canada 2017. He is also the Chief Investment Advisor for Motley Fool Canada and is the lead advisor on its flagship Stock Advisor Canada product. Before joining the Fool, Iain was a “buy-side” analyst and through this experience is well-versed in the idiosyncratic ways of the Canadian market. His investing interests are centred on scouring the market for interesting businesses that trade at reasonable prices and offer an appealing risk/reward relationship. Since joining the Fool in 2012, Iain dedicates each day to spreading Foolishness throughout this great country!

Published April 17, 2013 4:38 pm EDT

Lot’s of red. Consider yourself lucky if you owned a Canadian stock that went up today as there were just 24 issuers in the S&P/TSX Composite (out of about 240) that were flashing green with a few minutes left in the trading day. Only 5 of the top 60 large caps were up and none of them by more than 1%.

Barrick Gold (TSX:ABX,NYSE:ABX) was again the biggest contributor to the index’s near 173 point decline. The price of gold was down another 1.3% and Barrick was down more. With today’s 5.5% decline Barrick has now booked a 45% year-to-date loss. The stock trades with a dividend yield of 4.5% and at less than 0.9 times book value – remarkable stats. And, Barrick has lost its crown as the gold company with the biggest market cap. Goldcorp now holds this, um honour.

Other resource names that had a rough day and were significant contributors to the overall index decline were Teck Resources (TSX:TCK.B,NYSE:TCK) and First Quantum (TSX:FM). These stocks were down 5.1% and 9.2% respectively, giving up all of what they had gained in yesterday’s rally. The price of copper fell by close to 4%, a likely cause of the hair cut that both companies took.

Since last Friday, Barrick, Teck, and First Quantum are down 21%, 10%, and 14% respectively. Great, if the market was down 30%. Unfortunately, it’s only down 2%. It’s been one tough week, and we’re just over half-way home.

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Fool contributor Iain Butler is short $26 August 2013 put options on Teck Resources and owns shares in Teck and Barrick Gold outright. He has thoroughly enjoyed the week thus far. The Motley Fool has no positions in the stocks mentioned above.