By Angela Harmantas
TransCanada’s new strategy to get the Keystone XL pipeline built in Nebraska may be predicated on a longer-term game plan. Today on Before the Bell we’re analyzing TransCanada’s move to withdraw lawsuits against Nebraska landowners. Also, we’re giving you our picks of well-performing financial stocks and talking about one pharmaceutical company’s struggles (and why Valeant may not be to blame) – here’s what you need to know today:
TransCanada (TSX:TRP) announced a change in strategy on Tuesday to its seemingly endless fight to build the Keystone XL pipeline. The company made the move to drop its lawsuits against landowners in Nebraska and instead reapply for state approval, despite the fact that former Governor Dave Heinemen gave them the go-ahead in 2013. Is this a victory for Keystone’s opponents? Well, not exactly. Remember, TransCanada needs US Federal approval before Keystone is built, as it crosses the Canada-US border. Barack Obama is no supporter of the project and after vetoing the bill back in March 2015, and is unlikely to approve any form of Keystone. With this new strategy, final approvals for the project could be pushed back another few years – when Obama is out of office. Will a new US president be more supportive of Keystone? Certainly not Hillary Clinton, who if you’ll remember from previous Before the Bells has come out against it. If anything, Keystone could become a major factor in the 2016 Presidential elections.
When it comes to safe bets in investing, one of the most reliable long-term performers on the TSX are financials. However, even financial stocks haven’t had a great run lately, so there may be opportunities to get in now. Today’s investing idea looks at 5 financial stocks with over 15% return on equity. That number is significant seeing as the average ROE for Canadian financial stocks is around 9% if you don’t include the Big 6 banks in the equation. What do you think about having financial stocks anchoring your portfolio – is now the time to be adding more?
Did you catch Sean Mason’s Canadian Small Cap Market Movers yesterday? Looks like pharma stocks are really suffering from Valeant’s woes this past week or so. Quebec’s AcastiPharma Inc. (TSXV: APO) dropped 25% to $0.335 as the emerging biopharmaceutical company announced a 1-for-10 reverse stock split, meaning it will consolidate its issued and outstanding Class A common shares on the basis of 1 post-consolidation common share for every 10 pre-consolidation common shares. We can’t blame all of Acasti’s problems on Valeant – the stock has been struggling for some time now – but it’s not a great sign for the TSX (and Venture in this case) when pharmaceuticals are weak, is it?
Do you have a burning question you’d like answered by an investment expert or analyst? Let me know and I can post the answer here in the blog. Contact me by email at angela@smallcappower.com or on Twitter: @aharmantas.
Interested in previous Before the Bell blogs? 
