Louis James' Canvest 2015 Stock Picks

Louis James' Canvest 2015 Stock Picks

Held in Vancouver from May 31 to June 1, the 2015 Canadian Investor Conference was a bit of a different ballgame than it's been in previous years.

For one thing, for the second year in a row, the conference included companies focused not only on resources, but also on tech and diversified investment opportunities. Speaking to the Investing News Network prior to the event, Cambridge House International President Jay Martin said the strategy saw success in 2014. "We wouldn't be doing it again if we didn't have a positive response," he pointed out.

However, despite the interesting mix of companies on the floor, there's no doubt conference attendance was a little sparse this year. That might sound disappointing, but speakers at the show were quick to emphasize that a lack of investor enthusiasm is only a bad thing for those with a short-sighted view of the market. Indeed, that perspective came up immediately in a Monday morning talk from Louis James of Casey Research.

Like many, James believes that while the resource sector has "been through a bear mauling," it's now "showing real signs of a bottom." Furthermore, he thinks that one benefit of the situation is that investors now have a shopping list for stocks.

Explaining, he said that if a company can make money in today's tough markets, it's very likely to succeed when the downturn ends. "When the market does cycle up again, these guys that are making money now are going to make so much money going forward ... the market's just going to love them, and we know what that will do to the stock," he said.

On that note, he listed some of his "win-win picks" — companies that are currently making money — for attendees. Here's an overview of what he said:
  • Dynacor Gold Mines (TSXV:DNG) — "This is our 'makes money at any gold price' pick," said James. He explained that the company's success stems from the fact that it processes gold for third parties in Peru. "Because of the political situation in Peru they're one of six legal mills that can do this," he said, adding, "they have consistently made money through this downturn. Doesn't matter what the gold price is." Klondex Mines (TSX:KDX) — Like Dynacor, Klondex is "consistently making money," according to James. The company holds the Midas mine, which is a "very high-grade operation in mining-friendly Nevada," as well as "an even higher-grade development story right nearby called Fire Creek." Kirkland Lake Gold (TSX:KGI,LSE:KGI) — James described Kirkland Lake as a "former market darling," noting that its share price used to be over $20, but was brought low when management didn't deliver. Management has since been replaced, and the company is now making money. While James said that a valid question is if new management has truly fixed operations, he believes the answer is "yes."

    Looking at the silver space, James described Silver Wheaton (TSX:SLW,NYSE:SLW) as an "absolute no brainer," commenting, "they are making money hand over first, and they have made money during the downturn. There just isn't a better silver pick, and the royalty model is fantastic." On the production side, he said he likes Fortuna Silver Mines (TSX:FVI,NYSE:FSM), which is profitable and has been able to control its costs.