The Canadian Core Buy list posted weak performance during the month of May compared to the S&P/TSX 60 Index. The Core Buy list underperformed the index with a total return of -4.05% compared to -1.16% for the S&P/TSX 60 Index.
The largest drags on the Core Buy list's performance came from Cameco Corp. CCO and Suncor Energy SU with total returns of -12.2% and -7.5%, respectively. The Core Buy list retains its cumulative outperformance against the benchmark with a total return since inception of 162.3% versus 106.3% for the S&P/TSX 60 Index, a difference of 56 percentage points.
Our model recommended several changes to June's Core Pick list. Canadian Pacific Railway CP and Toronto-Dominion Bank TD were added to the Core Buy list, and Potash Corp of Saskatchewan POT was raised from the Core Hold list to the Core Buy list. These changes caused National Bank of Canada NA, Canadian Imperial Bank of Commerce CM and Valeant Pharmaceuticals International VRX to be moved from the Core Buy list to the Core Hold list. Great-West Lifeco Inc. GWO was raised from the Core Sell list to the Core Hold list.
A recap of stocks on this month's Consider Buy List
Cameco Corp. remains on the list from last month. The stock trades at a 32.4% discount to our fair value estimate of $28.
Canadian Pacific Railway Ltd. was added to the list this month. The stock trades at a 5.5% discount to our fair value estimate of $222.
IGM Financial Inc. was added to the list this month. The stock trades at a 14.3% discount to our fair value estimate of $49.
Peyto Exploration & Development Corp. remains on the list from last month. The stock trades at a 19.5% discount to our fair value estimate of $42.
Potash Corp. of Saskatchewan Inc. remains on the list from last month. The stock trades at a 22.2% discount to our fair value estimate of $50.
Rogers Communications Inc. remains on the list from last month. The stock trades at a 10.6% discount to our fair value estimate of $48.
Suncor Energy Inc. remains on the list from last month. The stock trades at a 19.6% discount to our fair value estimate of $45.
Toronto-Dominion Bank was added to the list this month. The stock trades at a 16.6% discount to our fair value estimate of $65.
The Canadian Income Buy list underperformed the S&P/TSX 60 Index during the month of May, posting a total return of -3.81% to the benchmark's -1.16%. The weak performance of the Buy list was primarily driven by AGF Management Ltd. AGF.B and IGM Financial Inc. IGM with total returns of -9.72% and -7.74%, respectively. The Income Buy list has generated a cumulative return since inception of 169.2%, while the benchmark has returned 106.3% over the same period, a difference of 62.9 percentage points.
Our model recommended several changes to our Income Pick list for the month of June. TransCanada Corp. TRP was moved to the Income Buy list from the Income Hold list, which displaced TELUS Corp. T from the Income Buy list to the Income Hold list. ARC Resources Ltd. ARX and Great-West Lifeco Inc. GWO were raised from the Income Sell list to the Income Hold list.
A recap of stocks on this month's Consider Buy List
AGF Management Ltd. remains on the list from last month. The stock offers a dividend yield of 4.8% and trades at a 25.1% discount to our fair value estimate of $9.
Canadian Imperial Bank of Commerce remains on the list from last month. The stock offers a dividend yield of 4.6% and trades at a 12.2% discount to our fair value estimate of $108.
IGM Financial Inc. remains on the list from last month. The stock offers a dividend yield of 5.4% and trades at a 14.3% discount to our fair value estimate of $49.
Peyto Exploration & Development Corp. remains on the list from last month. The stock offers a dividend yield of 3.9% and trades at a 19.5% discount to our fair value estimate of $42.
Potash Corp. of Saskatchewan Inc. remains on the list from last month. The stock offers a dividend yield of 4.9% and trades at a 22.2% discount to our fair value estimate of $50.
Rogers Communications Inc. remains on the list from last month. The stock offers a dividend yield of 4.5% and trades at a 10.6% discount to our fair value estimate of $48.
Suncor Energy Inc. remains on the list from last month. The stock offers a dividend yield of 3.1% and trades at a 19.6% discount to our fair value estimate of $45.
TransCanada Corp. was added to the list this month. The stock offers a dividend yield of 3.9% and trades at a 2.7% discount to our fair value estimate of $55.
