Five of the worst

GOLD STOCKS

Nothing has been hit harder this year than the gold miners — it’s not even close. The 10 worst performers on the TSX 60 were all related to gold with losses as high as 60% and no less than about 28%. The sell-off’s culprit: slumping bullion prices, which could fall even further now that the u.S. Federal reserve has signalled an ending to its quantitative easing program. A few gold miners, though, are better positioned to weather the looming storm. “Among the larger producers, Goldcorp Inc., yamana Gold Inc. and eldorado Gold Corp. are the clear winners,” said Steven Green, an analyst at Td Securities.

ROGERS COMMUNICATIONS INC. (RCI.B/TSX): $41.20, -8.8%

rogers shares were almost flat on the year heading into the last week of June, but then plummeted on heightened expectation that Verizon Communications Inc. will buy its way into Canada’s $19-billion wireless market. The u.S. phone giant represents major competition for Canada’s telcos, but could particularly threaten roger’s stronghold in major markets such as Toronto. “Overall, we believe a Verizon Canada scenario would result in value erosion of 5-10% for Canadian incumbent stocks,” said Greg Macdonald at Macquarie Securities. “We remain cautious in the near term, with rogers being the most exposed in our view.

ENCANA CORP. (ECA/TSX): $9.51, -9.5%

Four straight quarterly losses and a series of necessary asset sales to strengthen its balance sheet have encana floundering. doug Suttles, the company’s new chief executive, will try to right the ship by focusing capital towards the highest-return projects. But Greg Pardy, an analyst at rBC Capital Markets, said any upside

for encana’s stock depends on the company further monetizing existing assets and achieving commercial success in its oil and liquids-rich plays. He added, however, the company’s true fortunes may rely on a global economic upturn and improved commodity prices. The same could also be said of most energy plays, including encana spinoff Cenovus energy Inc., which has fallen nearly 10% this year.

AGRIUM INC. (AGU/TSX): $91.18, -8%

Agrium shares slumped in a first half marked by weaker profits and an exhausting proxy fight with Jana Partners LLC, but most analysts agree they will rebound if demand for fertilizer picks up. National Bank Financial’s robert Winslow said Agrium could also benefit from a rising u.S. dollar, estimating a 5% increase in the greenback would translate into a 4% increase in the company’s earnings per share. But such a rise could be tempered, because commodity prices are generally bought and sold in u.S. dollars, and any price increase would likely curb demand.

FORTIS INC. (FTS/TSX): $32.2, -5.9%

Fortis still faces a major headwind in rising interest rates, but the Canadian dividend aristocrat is expected to perform better in the months ahead. Cory O’Krainetz, an Odlum Brown analyst, said Fortis offers reasonable value in an expensive area of the market and will hold up better than some of the higher-flying yield plays if rates keep rising. He noted Fortis’s dividend yield is still attractive relative to bonds and the electric utility has a strong track record of steadily growing earnings and dividends that should continue at a measured pace.

Note: Stocks were chosen Friday at 11 a.m. Share price information shown is as of Friday’s close.