Market Overview

Silver Wheaton, HudBay Minerals and Other Hot Canadian Stocks

All the hot Canadian stocks on the U.S. exchanges right now are in the basic materials sector: gold, silver, oil and gas, or industrial metals and minerals. Four of the top performing Canadian stocks over the past 90 days are Enerplus (NYSE: ERF), HudBay Minerals (NYSE: HBM), IAMGOLD (NYSE: IAG) and Silver Wheaton (NYSE: SLW). They are all dividend payers, analysts tend to recommend buying shares, and the share prices have all taken a pause recently from racing higher.

Enerplus

This Calgary-based company explores and develops crude oil and natural gas in United States and Canada, and it pays a monthly dividend. The dividend yield is about 6.6 percent, despite Enerplus slashing its dividend back in June. The company's market capitalization is about $3.3 billion and the long-term earnings per share (EPS) growth forecast is more than 35 percent. But the return on equity is in negative territory. Back in August, the company announced it would sell its interest in Laricina Energy and use the proceeds to repay outstanding bank loans. Short interest is more than two percent of the float. Two out of six analysts surveyed by Thomson/First Call recommend buying shares. The mean price target, or where analysts expect the share price to go, is about six percent higher than the current share price. Despite the recent run up, the share price is still about 42 percent lower than the 52-week high set last November. But over the past 90 days, Enerplus has outperformed Canadian Natural Resources (NYSE: CNQ) and the Dow Jones Industrial Average.

HudBay Minerals

Shares of this integrated mining company are up more than 23 percent from three months ago. The company is based in Toronto and has a market cap of about $1.6 billion. It pays a semiannual dividend and has a yield of about 2.1 percent. Note that per-share earnings have declined in each of the past four months, and EPS and revenue for the quarter that ended in September are expected to be down significantly from a year ago. But the long-term EPS growth forecast is about 43 percent and the operating margin is better than the industry average. The short interest is less than one percent of the float. Three of the six analysts polled recommend buying shares. The upside potential, based on the analysts' mean price target, is almost 16 percent. Despite the recent run up, the share price is still about 23 percent lower than the 52-week high from last March. The stock has outperformed competitor Rio Tinto (NYSE: RIO) over the past six months.

IAMGOLD

Shares of this mid-tier gold mining company are about 37 percent higher than three months ago. The company has a market cap of near $6.1 billion and it is headquartered in Toronto. The long-term EPS forecast is more than 11 percent. The price-to-earnings (P/E) ratio is a bit higher than the industry average but expected to come down, and the operating margin is greater than the industry average. Short interest is less than one percent of the float. Analysts expect the company to report per-share earnings and revenue that are near flat compared to a year ago. Ten of 14 analysts polled recommend buying shares; none recommend selling. Their mean price target, or where analysts believe the share price may go, is about 10 percent higher than the current share price. Shares pulled back about seven percent last week but have recovered. IAMGOLD has outperformed the Dow and larger competitors Barrick Gold (NYSE: ABX) and Newmont Mining (NYSE: NEM) over the past six months.

Silver Wheaton

Based in Vancouver, this mining company has seen its share price rise more than 44 percent in the past three months, hitting a 52-week high on Monday. The market cap is about $13.8 billion and the company offers a dividend yield of about one percent. The P/E ratio is in line with the industry average, the return on equity and return on investment are more than 20 percent, and the operating margin is higher than the industry average. The company completed an acquisition from HudBay last week. Short interest is less than two percent of the float. All 11 analysts surveyed rate the stock at Buy or Strong Buy. They believe the stock has room to run, as their mean price target is about 12 percent higher than the current share price. The stock has faced resistance at $40 for the past two weeks. Year to date, the stock has outperformed competitor Coeur d'Alene Mines (NYSE: CDE) and the Dow.

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