‘Richest country on earth run by idiots’: Kevin O’Leary says Canada … – Yahoo Finance

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‘Richest country on earth run by idiots’: Kevin O’Leary says Canada is ‘very, very wealthy’ and has every resource the world wants — but it’s poorly managed. 3 top stocks to play a comeback

“Shark Tank” star Kevin O’Leary is a Canadian businessman and investor who has never shied away from voicing his opinions, however controversial they may be. Despite his deep Canadian roots, O’Leary has been openly critical of his home country’s management.

“Canada is the richest country on earth run by idiots,” he said in a YouTube video posted to his official channel, which has received over 1.3 million views and 31,000 likes.

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“The country has every resource the world wants. It’s a very, very wealthy country, but it’s poorly managed,” he added. Back in 2017, O’Leary appeared willing to do the job himself. He entered and then dropped out of the race to become leader of the country’s Conservative Party and challenge Prime Minister Justin Trudeau in the 2019 federal elections. Besides a Canadian passport, he also has Irish and UAE citizenship.

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The Montreal-born TV personality might not be alone in his discontent with the Canadian government. A recent Leger poll conducted for The Canadian Press reveals notable public disapproval, with only 30% of Canadians saying they are satisfied with Prime Minister Justin Trudeau’s government. In contrast, a significant 63% report dissatisfaction. Canada is also nowhere near the top on The World Bank’s Ease of Doing Business ranking at the 23rd spot.

Regardless of one’s view on the Trudeau administration, it’s hard to argue that the country is rich in resources. From the sprawling, forest-covered landscapes of British Columbia to the oil-rich sands of Alberta, Canada’s natural bounty is both diverse and vast.

Companies operating in natural resources also comprise a sizable portion of the S&P/TSX Composite Index, the benchmark index for the Canadian stock market. But investors might also feel a sense of discontent: While the S&P/TSX Composite Index has seen a return of 32% in the past five years, this figure seems modest when compared to its American counterpart. The S&P 500 Index, a barometer for the U.S. stock market, has delivered a return of 65% during the same period.

Still, considering the strategic significance of natural resources, especially in periods of inflation, this sector might present a valuable opportunity for investors.

Here are 3 Canadian natural resource stocks that analysts find particularly attractive.

Canadian Natural Resources Ltd (CNQ)

Canadian Natural Resources (CNQ) is a prominent player in the Canadian energy sector, known for its diversified portfolio in crude oil, natural gas, and natural gas liquids. The company’s operations are spread across various regions, including North America, the North Sea, and Offshore Africa, with a significant emphasis on the oil sands of Northern Alberta.

CNQ is notable for its cost-effective and efficient operations, particularly in oil sands mining, which have been key to its resilience in a market characterized by volatile oil and gas prices.

In Q3, the company achieved record quarterly production volumes, averaging approximately 1,394,000 barrels of oil equivalent per day (BOE/d). Adjusted net earnings came in at C$2.9 billion.

Earlier this month, the company announced an 11% increase to its quarterly cash dividend to C$1.00 per share, translating to an annual yield of 4.5% at the current share price.

CNQ is listed on both the Toronto Stock Exchange and the New York Stock Exchange.

RBC Capital Markets analyst Greg Pardy has an “outperform” rating on CNQ and a price target of $96 on its TSX-listed shares, implying a potential upside of 8%.

West Fraser Timber Co. Ltd. (WFG)

West Fraser Timber (WFG) is a leading North American integrated wood products company. Headquartered in Vancouver, it operates multiple facilities in Canada, the U.S., the U.K. and Europe.

The company’s primary focus is on producing lumber, one of the most commonly used building materials. In addition to lumber, West Fraser also manufactures panels, pulp, newsprint, wood chips, and other related products.

In Q3, West Fraser generated $1.705 billion in sales and $159 million in earnings.

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More recently, the company announced that it has completed the acquisition of Spray Lake Sawmills located in Cochrane, Alberta. CEO Ray Ferris said that the acquisition is “an ideal fit” for West Fraser’s lumber and treated wood business.

Just like CNQ, West Fraser is listed on both the TSX and the NYSE.

CIBC analyst Hamir Patel has an “outperform” rating on West Fraser and a price target of C$119 on its TSX-listed shares — around 16% above where the stock sits today.

Barrick Gold Corp (GOLD)

Canada is rich in minerals — including gold. It’s also home to one of the largest gold mining companies in the world: Barrick Gold (GOLD).

Headquartered in Toronto, Barrick operates mines and projects in various countries across North and South America, Africa, and the Middle East. Besides its primary focus on gold, the company also produces copper.

In 2022, Barrick produced 4.1 million ounces of gold and 440 million pounds of copper.

Gold prices, like those of most commodities, are subject to fluctuations. However, historically, the yellow metal has been regarded as a reliable store of value and a hedge against inflation. This is largely due to its inherent scarcity and its ability to maintain its purchasing power over long periods of time.

The price of gold has climbed nearly 12% in 2023, but Barrick’s NYSE-listed shares have declined about 2.5% during the same period. The company is also listed on the TSX under the ticker ABX.

Scotiabank analyst Tanya Jakusconek has an “outperform” rating on Barrick and a price target of $25 on its NYSE-listed shares. Considering that shares currently trade at $17.38, the price target implies a potential upside of around 44%.

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