May 2016 Stock Considerations

With a new month upon us, it is time once again, for me to lay out my potential stock buys. Typically, I have a fairly long list of stocks to pick from as values and yields for many names appeared attractive. Those names in the past have also allowed me to average down on my purchase price which I was more than happy to do. Today, for the first time in a very long time I have only two potential stock buys that I am considering.

The first stock I am considering in May is The Bank of Nova Scotia (BNS). As many of you already know, I have been slowly adding to my Canadian bank holdings for quite a while, nibbling on positions as prices, values and yields looked too good to pass up. Today, however, after climbing significantly in the last couple of months those once compelling buys don’t look as attractive anymore. The one exception, BNS which seems to offer the greatest reward and potential risk among the large Canadian banks.

The second stock I am considering is health REIT giant, HCP, Inc. (HCP). We all saw how HCP’s earnings and guidance essentially brought down the entire health REIT sector in February which no doubt created some interesting buying opportunities within the space as stock price swoons gave us some very enticing yields in several health REIT names. A significant bounce since the February lows, however, has made many of the other health REITs less attractive than in days and weeks past. HCP still remains relatively weak for a variety of reasons and presents the best value (and risk) for potential returns today.

Of course, I realize that we are in the very beginning of the month and as May unfolds I have a feeling that more names will join the two above as potential buys. April finished on a weak note and I if I had to guess, I would say May will start out weak as well, but it’s just a guess.

What do you think about my potential stock picks for May? Are any of the above names on your monthly watch list? Please let me know below?

Disclosure: Long BNS, HCP

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Keith Park 5 years ago Author's comment

I'm not too worried over PR. It kind of reminds me of all the panic we saw with Greece, Ireland, Cyprus and more. In the end it all passed.

Moon Kil Woong 5 years ago Contributor's comment

#1 Puerto Rico should be the big concern more than earnings. Sadly, I expect the rest of corporate returns to be worse given usually the better returns are scheduled for release first. The worst are the ones that need to file for delay. Thus, the general trend is down after the sharp unjustified rally back to the top of the trading range.