Seven Canadian resource stocks best positioned to rally – by Peter Ashton (Globe and Mail – January 5, 2018)

What are we looking for?

Canadian resource stocks poised to benefit from the continuing rally in commodity prices.

After several years of lacklustre performance, commodity prices saw a significant rebound in 2017, especially toward the end of the year. The forest product sub-index was up approximately 30 per cent for the year, while West Texas intermediate (WTI) crude oil hit a 2 1/2-year high.

Gold was up 12 per cent on the year while copper prices in December saw their best run in 30 years. Commodity prices look to continue their advance in 2018 on the back of strong global economic growth, thereby pulling many Canadian resource stocks higher.

The screen

We will be using Recognia Strategy Builder to search for Canadian resource stocks that may be poised to appreciate in 2018. We begin by setting a minimum market cap threshold of $1-billion. This will focus our search on mid- and large-cap Canadian resource stocks in the metals and minerals, forest products and precious metals industries.

Next, we will look for stocks that currently trade at reasonable valuations. We will filter based on a forward price-to-earnings ratio of 25 or less. We also want to focus on companies with profitable operations.

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