Deep value to be found in natural resource space

But stock pickers "need to be highly-selective," says Mackenzie's Scott Carscallen.

Sonita Horvitch 22 July, 2015 | 5:00PM
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Scott Carscallen, vice-president and portfolio manager at Mackenzie Investments, has adopted a two-pronged strategy for tackling the Canadian small-cap universe. A specialist in this asset class and a value manager, Carscallen has been staying clear of gold and metal stocks, "which have been under strong selling pressure on-and-off for some time."

Carscallen has also been emphasizing larger small-caps and mid-cap stocks. "These have performed better than smaller, small caps." Investors are risk averse and have been gravitating toward bigger-cap stocks, he says.

The weakness in the materials sector has weighed heavily on the S&P/TSX SmallCap Index, says Carscallen. At the end of June, materials represented 30.9% of this small-cap index versus 10.8% of the S&P/TSX Composite Index. The energy sector has also been a weak performer, says Carscallen. It represented 12.5% of the small-cap index at the end of June versus a 20.4% weighting in the bigger-cap index.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Aecon Group Inc16.46 CAD2.88
Badger Infrastructure Solutions Ltd30.91 CAD0.39
Canaccord Genuity Group Inc14.76 CAD2.86
CCL Industries Inc B- Non-Voting64.04 CAD1.25
Element Fleet Management Corp12.72 CAD3.04
RF Capital Group Inc1.96 CAD-1.51
Winpak Ltd35.58 CAD0.01

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Sonita Horvitch

Sonita Horvitch  

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