The Canadian Core Buy list outperformed the S&P/TSX 60 Index during the month of December, posting a total return that came in at -1.6% compared to the benchmark's -3.1%. The top performer for the period was Valeant Pharmaceuticals International VRX with a total return of 16.8%. However, the strong result was more than offset by poor performance from Potash Corp. of Saskatchewan POT and Tourmaline Oil TOU with total returns of -12.3% and -12.0%, respectively.
The Core Buy list retains its cumulative outperformance against the benchmark with a total return since inception of 147.2% versus 83.8% for the benchmark S&P/TSX 60, a difference of 63.4 percentage points.
Our model recommended several changes to January's Core Pick list. Restaurant Brands International QSR was moved from the Core Buy list to the Core Hold list. Tourmaline Oil Corp. was removed from the Core Buy list as its market cap fell below our minimum criteria of $5 million. Canadian Imperial Bank of Commerce CM and Canadian Pacific Railway CP were each added to the Core Buy list from the Core Hold list, and Rogers Communications RCI.B was raised from the Core Sell list to the Core Hold list.
A recap of stocks on this month's Consider Buy List
Bank of Nova Scotia remains on the list from last month. The stock trades at a 27.9% discount to our fair value estimate of $77.
Cameco Corp. remains on the list from last month. The stock trades at a 29.9% discount to our fair value estimate of $24.
Canadian Imperial Bank of Commerce was added to the list this month. The stock trades at a 31% discount to our fair value estimate of $133.
Canadian Pacific Railway was added to the list this month. The stock trades at a 17.3% discount to our fair value estimate of $213.
Enbridge remains on the list from last month. The stock trades at a 15% discount to our fair value estimate of $54.
National Bank of Canada remains on the list from last month. The stock trades at a 37.7% discount to our fair value estimate of $64.
Potash Corp. of Saskatchewan remains on the list from last month. The stock trades at a 42.4% discount to our fair value estimate of $42.
Valeant Pharmaceuticals International remains on the list from last month. The stock trades at a 34.6% discount to our fair value estimate of $210.
The Canadian Income Buy list underperformed the S&P/TSX 60 Index during the month of December, posting a total return of -4.3% compared to the benchmark's -3.1%. The weaker performance of the Buy list was primarily driven by poor performance from Potash Corp. of Saskatchewan POT and Ritchie Bros. Auctioneers RBA with total returns of -12.3% and -6.7%, respectively.
The Income Buy list has generated a cumulative return since inception of 135.1%, while the S&P/TSX 60 benchmark returned 83.8% over the same period, a difference of 51.3 percentage points.
Our model recommended several additional changes to our Income Pick list for the month of January. Ritchie Bros Auctioneers, Suncor Energy SU and Enbridge ENB were each moved from the Income Buy list to the Income Hold list. Peyto Exploration & Development PEY and TELUS T were raised to the Income Buy list from the Income Hold list, and Shaw Communications SJR.B was newly added to the Income Buy list. Rogers Communications RCI.B was lifted from the Income Sell list to the Income Hold list.
A recap of stocks on this month's Consider Buy List
AGF Management remains on the list from last month. The stock offers a dividend yield of 6.2% and trades at a 25.9% discount to our fair value estimate of $7.
IGM Financial remains on the list from last month. The stock offers a dividend yield of 6.4% and trades at a 15.8% discount to our fair value estimate of $42.
National Bank of Canada remains on the list from last month. The stock offers a dividend yield of 5.4% and trades at a 37.7% discount to our fair value estimate of $64.
Pembina Pipeline remains on the list from last month. The stock offers a dividend yield of 6.1% and trades at an 11.6% discount to our fair value estimate of $34.
Peyto Exploration & Development was added to the list this month. The stock offers a dividend yield of 5.1% and trades at a 0.1% discount to our fair value estimate of $26.
Potash Corp. of Saskatchewan remains on the list from last month. The stock offers a dividend yield of 8.7% and trades at a 42.4% discount to our fair value estimate of $42.
Shaw Communications was newly added to the list this month. The stock offers a dividend yield of 4.9% and trades at a 3.8% discount to our fair value estimate of $25.
TELUS was added to the list this month. The stock offers a dividend yield of 4.6% and trades at a 9.6% discount to our fair value estimate of $42.
