The Successful Investor Hotline – Friday, March 28, 2008

Article Excerpt

NOVA CHEMICALS CORP. $24.66, Toronto symbol NCX, is down from its peak of $43.70 in July 2007, mostly due to fears of a slowing economy in the United States. Sales in the U.S. accounted for 43% of Nova’s 2007 sales. Manufacturers use the company’s products to make a wide variety of plastic products including auto parts, construction materials and packaging. Nova also needs large amounts of crude oil and natural gas to make its products, which increases its exposure to rising energy costs. However, Nova’s proximity to Alberta’s large natural gas reserves helps keep its input costs down. The recent merger of its money-losing foam cup business into a 50:50 joint venture also cuts its costs. Nova’s highly cyclical operations make it riskier than most of our recommendations. However, it’s cheap at just 7.3 times its likely 2008 earnings of $3.30 U.S. a share. Nova Chemicals is still a buy for long-term gains. TORONTO-DOMINION BANK $60.98, Toronto symbol TD, expects to complete its acquisition…