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Gold plays dominate Caldwell's top picks

What are we looking for?

What the pros are buying.

Checking the stocks they buy can be a source of tips for further research, or a way of gaining some insight into an investment fund. Today, we will look at the top 10 equity holdings in the Caldwell Meisels Canada Fund at

More about the fund

The $3.3-million Canadian small to mid-cap equity fund has been run by Brendan Caldwell of Caldwell Investment Management Ltd. since late 2004. While the fund has focused on companies with a market value of more than $500-million and opportunistic plays, it began a shift in strategy in June. Technical analyst Ron Meisels, president of Phases & Cycles Inc., has been hired as a consultant for the fund, which is transitioning to focus on the 100 largest Canadian companies.

The fund gained 39.5 per cent for the year ended July 31 compared with 38 per cent for the BMO Nesbitt Burns Canadian Small Cap Index, and 11.7 per cent for the S&P/TSX Total Return Index. Over five years, the fund has an average annual return of 2.7 per cent versus 5.4 per cent for the smaller-cap index.

Mr. Caldwell said he believes the current secular bear market has four more years to run. This fall, however, a cyclical bull market will probably take over for the next couple of years, he suggested. "You will see the Canadian market outperform the vast majority of the rest of the world led primarily by its commodity and hard assets. The sector on which we are most bullish is the gold sector."

What did we find?

Plenty of gold stocks in the top 10 holdings - part of the old guard in the portfolio. In fact, these metals stocks represent about 30 per cent of the portfolio.

Mr. Caldwell is keeping his gold plays because he is still upbeat on a rising price for the yellow metal.

Osisko Mining Corp., a junior explorer which owns the Canadian Malartic gold deposit in Quebec, still has potential despite a very robust gain this year, he said.

"It's just opening the largest active gold mine in Canada," he said. "We see a short-term target on it of $18 a share with any strength in the gold market, or with a takeover premium."

Canadian National Railway Co. is part of the new guard of securities being purchased. Technical analysis suggests a "significant breakout" above $60 a share, and the stock could hit a target of $74 to $84, he said.

With its recent rise to a high of $16.50 a share, Trican Well Service Ltd. also signalled the start of a new major leg up toward higher targets that could reach between $19 and $22 a share, he added.


Top 10 equity holdings for Caldwell Meisels Canada Fund as of July 31, 2010
Company Symbol Price as of Aug. 24 ($) 52-week high ($) 52-week low ($) YTD price chge (%) PE Ratio % Yield Market cap ($ mil.) Volume
Iamgold Corp.IMG-TSX18.6421.9512.3112.954.80.36,914.01,652,594
Ivanhoe MinesIVN-TSX17.2419.129.3111.15N/AN/A8,413.8560,876
Alamos GoldAGI-TSX16.5517.618.5331.77290.41,916.1380,028
Eldorado GoldELD-TSX19.119.7310.7428.02490.310,335.62,480,037
Trican Well ServiceTCW-TSX14.516.510.053.1338.20.72,079.7998,088
Osisko MiningOSK-TSX14.3156.8869.03N/AN/A4,808.91,511,397
Canadian National RailwayCNR-TSX62.4267.250.758.8614.11.729,050.2812,198
Carpathian GoldCPN-TSX0.350.480.23-5.41N/AN/A100.4121,000
Donner MetalsDON-TSX-V0.2350.370.17-9.62N/AN/A26.4155,770
Gold Bullion DevelopmentGBB-TSX-V0.540.710.06500N/AN/A67.2840,850

© 2007 The Globe and Mail. All rights reserved.

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