Saskatchewan stocks: Grin and Bear it. (Highlights).

Mothers everywhere must be so proud of the chieftains in our speaks-with-one-voice investment advisor community. The financial wizards didn't have anything nice to say about 2001 50 they didn't say anything at all.

Given the chance to play Quincy they decided instead to let the previous 12 months rest in peace. Barely a 'no comment' from any advisor attached to Canada's big banks and hardly an 'at least it's over' from the semi-independents. A colorful 'I'd love to talk but there's a bear on my front porch' couldn't fully hide the distress of one besieged financial analyst.

Even from within the halls of academia the most sage commentary on the past year is to accept it for what it was and move on.

"Even if you've had a bad year, as was the case in 2001, you can't dwell too much on the past," advises professor of finance Dale Domian, an instructor in the College of Commerce at the University of Saskatchewan who also owns stock in more than 100 Canadian companies.

"As an investor a bad year doesn't mean one should be pessimistic about the coming year. If the stock prices have adjusted themselves downward enough then there can be definite opportunities for gains."

While 2001 was certainly no picnic for the squeamish advisor or the faint-of-heart investor, the numbers prove Domian correct in his assertion that the year served a valuable function. Look past the rubble of the Nortel meltdown and beyond the retreating Toronto Stock Exchange and you see many sectors -- particularly those with strong Saskatchewan connections -- either held their own or queued up for growth.

Lump together mining and miningrelated companies in Saskatchewan and they far outweigh any other sector on the scales of finance measured by national and international stock markets. As go the mining companies so goes Saskatchewan's presence on the markets. Exerting the heaviest influence are Potash Corporation of Saskatchewan (POT) and Cameco Corporation (CCO).

PotashCorp is Saskatchewan's largest company in terms of stock market valuation and has been steady fixture on the Toronto Stock Exchange (TSE). Cameco recently joined PotashCorp on the highly visible S&P/TSE60, an index of Canada's top 60 publicly traded companies.

"I'm certainly glad my shares of Cameco have done well," Domian says, noting the share price for the Saskatoon-based uranium producer has risen steadily from a cost of about $15 in early 2000. Highlighted by a surge to $43 in May the stock closed out the year near $40.

"I expect the company will see further gains if the world continues to be concerned about things like the environment and greenhouse gases," Domian says, tempering his optimism by noting uranium prices have been known to quickly seesaw at the whim of world demand.

Domian points Out PotashCorp has been fairly stable in relation to a lot of the smaller Saskatchewan-based stocks. Their share price came off a two-year spike of $118 as the calendar turned to 2001 and by February it had settled in between $80-100 where it remained the rest of the year.

"In the case of PotashCorp they had earlier made a conscious effort to diversify their operations," Domian says. "Those moves and especially their focus on nitrogen production really paid off last year."

A company known for its gold production, Saskatoon-based Claude Resources (CRJ), also benefited from diversified holdings in 2001. Natural gas rode in on a white horse during an atypical spell of diminished gold fortunes and carried the bottom line for a few months. Share price on the TSE peaked at 88 cents in early February and trawled below a half-dollar before perking up late in the year.

Finding a toehold in the quagmire that was the Canadian Venture Exchange (CDNX) has been a challenge for Saskatchewan's small public companies, a task made more difficult as the Montreal Exchange rolled into the junior exchange. The CDNX has recently shown signs of righting the ship and two Saskatchewan-headquartered companies have secured spots on the S&P/CDNX Composite Index.

Shore Gold (SGF) kept afloat during the rough seas of 2001. While its stock price didn't sail much above 80 cents all year, nor did it often sink below 50 cents. It ended the year at a steady and ready-to-move 60 cents. The other S&P/CDNX Composite Index entry, Boston Development Corporation (BTN), slipped as low as 16 cents before ending the year near 30 cents on sporadic trading.

A 2001 snapshot of the Saskatchewan Wheat Pool (SWP.B) also shows a company with a steady hand on its core resources during tough times for its signature product. Cropped out of the picture but ingrained in the memory of many investors is the stock price's steady slide the previous few years, yet over the course of a drought-inflicted 2001 the stock stayed mainly between the $2- and $3-rows and finished the year headed toward three dollars.

"What you could say about the Wheat Pool is that it's down so low now that there's not a whole lot of room for more downward movement," Domian says of Saskatchewan's corporate leader in the agriculture sector.

"There's still not a large corporate component to the agriculture sector," Domian says, explaining the industry's dependence on the weather makes it less obviously cyclical. Investors have to realize, he says, even though many parts of Saskatchewan were hit by drought last year producers around the world also deal with adverse climate conditions.

Challenges in agriculture may rightfully push many investors toward value-added ventures but Domian is hesitant about leaning too heavily toward ag biotech stocks, touted by many in 2001 as a safe haven.

"I wish I could be more optimistic about the industry because there are a number of Saskatchewan companies involved but I'm concerned about the public perception and the knee-jerk reaction that may be coming against genetically modified foods," Domian says, asserting his belief 'safe havens' don't exist on the stock market and encouraging portfolio diversification.

Saskatchewan companies were largely unaffected by the continued flight away from tech stocks in 2001 and the terrorist attacks that shut down markets in September. Tech-related companies in this province had little connection with Nortel and its crash while manufacturers were more likely to be affected by the 'less strong' global economy.

International Road Dynamics (IRD) rose steadily above the one-dollar mark on the TSE during 2001, closing the year at $1.30 before surging ahead on the strength of new contracts in mid-January. The Saskatoon-based transportation technology company continued its push into new markets and its stock price reflected the company's ambition and innovation.

Regina steel producer IPSCO (IPS) began 2001 on a low of close to $11 but quickly moved to $25 by the spring. The stock steadily corrected to just under $16 by winter -- showing no discernable effects from the turmoil of September -- and pushed back over $20 shortly after New Year's Day.

With a few winners, no losers and a majority of companies holding steady, the Saskatchewan portfolio was a strong bet for investors in 2001. Overall positive performance gives Domian reason for optimism heading into 2002.

"I don't think most companies out there are over-valued, which means there is room for growth," Domian says. "My standard prediction is that I'm expecting the markets to rise by 10 per cent and Saskatchewan companies should be within that range."

CONTACT

Dale Domian

Professor of Finance

College of commerce

University of Saskatchewan

[phone]