The Canadian Core Buy list posted weak performance during the month of March compared to the S&P/TSX 60 Index. The Core Buy list underperformed the index with a total return of -3.85% compared to a loss of 2.08% for the S&P/TSX 60 Index.
Poor performance from Encana Corp. ECA and Potash Corp. of Saskatchewan POT drove the Buy list's underperformance, with total returns of -12.7% and -9%, respectively. The strongest result from the Core Buy list came from IGM Financial IGM during the month of March, with a total return of 2.9%. The Core Buy list retains its cumulative outperformance against the benchmark with a total return since inception of 158.9% versus 104.1% for the S&P/TSX 60 Index, a difference of 54.8 percentage points.
Our model recommended several changes to April's Core Buy list. Encana Corp. and IGM Financial were transferred from the Core Buy list to the Core Hold list. These names were replaced by Suncor Energy SU and Canadian Imperial Bank of Commerce CM, both of which were in the Core Hold list last month. Cenovus Energy CVE was removed from the Core Buy list due to its recent economic moat downgrade from narrow to none. The space was filled by Peyto Exploration & Development PEY, which is new to all lists in April. BCE Inc. BCE was transferred from the Core Sell list to the Core Hold list, while Great-West Lifeco GWO was moved from the Core Hold list to the Core Sell 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 38.4% discount to our fair value estimate of $29.
Canadian Imperial Bank of Commerce was added to the list this month. The stock trades at a 15.3% discount to our fair value estimate of $108.
National Bank of Canada remains on the list from last month. The stock trades at a 18% discount to our fair value estimate of $56.
Peyto Exploration & Development was added to the list this month. The stock trades at a 20.9% discount to our fair value estimate of $43.
Potash Corp. of Saskatchewan remains on the list from last month. The stock trades at a 21.8% discount to our fair value estimate of $52.
Rogers Communications remains on the list from last month. The stock trades at a 10.9% discount to our fair value estimate of $48.
Suncor Energy was added to the list this month. The stock trades at a 17.2% discount to our fair value estimate of $45.
Valeant Pharmaceuticals International remains on the list from last month. The stock trades at a 13.5% discount to our fair value estimate of $288.
The Canadian Income Buy list was outperformed by the S&P/TSX 60 index during the month of March, posting a total return of - 2.64% to the benchmark's loss of 2.08%. The Buy list's weak performance was driven by poor results from ARC Resources ARX and Potash Corp. of Saskatchewan POT with total returns of -9.5% and -9%, respectively. The Income Buy list has generated a cumulative return since inception of 172.4%, while the S&P/TSX 60 has returned 104.1% over the same period, a difference of 68.3 percentage points.
Our model recommended several changes to our Income Buy list for the month of April. National Bank of Canada NA and Peyto Exploration & Development Corp. PEY were transferred to the Income Buy list from the Income Hold list, and Enbridge ENB was newly added to the Income Hold list. These additions displaced ARC Resources and AGF Management AGF.B from the Income Buy list, while Cenovus Energy CVE was removed from the Buy list due to its recent economic moat downgrade from narrow to none. BCE Inc. BCE was transferred from the Core Sell list to the Core Hold list, while Great-West Lifeco GWO was moved from the Core Hold list to the Core Sell list.
A recap of stocks on this month's Consider Buy List
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 15.3% discount to our fair value estimate of $108.
Enbridge was added to the list this month. The stock offers a dividend yield of 3.1% and trades at a 4.8% discount to our fair value estimate of $63.
IGM Financial remains on the list from last month. The stock offers a dividend yield of 5% and trades at an 8.8% discount to our fair value estimate of $49.
National Bank of Canada was added to the list this month. The stock offers a dividend yield of 4.4% and trades at an 18% discount to our fair value estimate of $56.
Peyto Exploration & Development was added to the list this month. The stock offers a dividend yield of 3.9% and trades at a 20.9% discount to our fair value estimate of $43.
Potash Corp. of Saskatchewan remains on the list from last month. The stock offers a dividend yield of 4.7% and trades at a 21.8% discount to our fair value estimate of $52.
Rogers Communications remains on the list from last month. The stock offers a dividend yield of 4.5% and trades at a 10.9% discount to our fair value estimate of $48.
TransCanada Corp. remains on the list from last month. The stock offers a dividend yield of 3.9% and trades at a 2.3% discount to our fair value estimate of $55.
