The Canadian Core Buy list posted muted performance during the month of November compared to the S&P/TSX 60 Index. The Core Buy list trailed the index with a total return of 0.64% compared to 1.74% for the index.
Total return from the Core Buy list was negatively impacted in November by the heavy presence of energy names among the group, which generally saw poor performance during the month following a prolonged decline in benchmark commodity prices. Consequently, total returns from Encana Corp. ECA and Cenovus Energy CVE of -14.2% and -8%, respectively, more than offset gains from Rogers Communications RCI.B of 8% and Power Corp. of Canada POW of 9%. The Core Buy list retains its cumulative outperformance against the benchmark; with a total return since inception of 165.9% versus 100.6% for the benchmark, a difference of 65.3 percentage points.
Our model recommended several changes to December's Core Buy list. Tourmaline Oil Corp. TOU and IGM Financial IGM will be removed from the Consider Buy list and added to the Consider Hold list. Suncor Energy SU will move from the Consider Hold to the Consider Buy list, while CI Financial Corp. CIX will be newly added to our Consider Buy list. Thomson Reuters Corp. TRI will be transferred to the Consider 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 an 11.4% discount to our fair value estimate of $24.
Cenovus Energy Inc. remains on the list from last month. The stock trades at a 34.2% discount to our fair value estimate of $39.
CI Financial Corp. was added to the list this month. The stock trades at a 5.9% discount to our fair value estimate of $36.
Encana Corp. remains on the list from last month. The stock trades at a 45.4% discount to our fair value estimate of $33.
Potash Corp. of Saskatchewan Inc. remains on the list from last month. The stock trades at a 14.5% discount to our fair value estimate of $46.
Power Corp. of Canada remains on the list from last month. The stock trades at a 7.3% discount to our fair value estimate of $35.
Rogers Communications Inc. remains on the list from last month. The stock trades at a 4.6% discount to our fair value estimate of $48.
Suncor Energy Inc. was added to the list this month. The stock trades at a 27.8% discount to our fair value estimate of $50.
The Canadian Income Buy list outperformed the S&P/TSX 60 Index in November, posting a total return of 2.81% to the benchmark's 1.74%.
The largest moves during the month stemmed from Power Financial Corp. PWF and Rogers Communications RCI.B with total returns of 8.3% and 8%, respectively. The relative strength of these names helped to offset losses from Cenovus Energy CVE and AGF Management Ltd. AGF.B of -8% and -2.7%, respectively. The Income Buy list has generated a cumulative return since inception of 189.2%, while the benchmark has returned 100.6% over the same period, a difference of 88.6% percentage points.
Our model recommended a number of changes to our Income Buy list for the month of December. TELUS Corp. T will be moved to the Consider Hold list and will be replaced by TransCanada Corp. TRP, a previous constituent of the Consider Hold list. Thomson Reuters Corp. TRI will be moved to the Consider Sell list from the Consider 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 10.8% and trades at a 9.5% discount to our fair value estimate of $11.
ARC Resources Ltd. remains on the list from last month. The stock offers a dividend yield of 4.4% and trades at a 12.8% discount to our fair value estimate of $31.
Cenovus Energy Inc. remains on the list from last month. The stock offers a dividend yield of 4.2% and trades at a 34.2% discount to our fair value estimate of $39.
IGM Financial Inc. remains on the list from last month. The stock offers a dividend yield of 4.7% and trades at a 5% discount to our fair value estimate of $50.
Potash Corp. of Saskatchewan Inc. remains on the list from last month. The stock offers a dividend yield of 4% and trades at a 14.5% discount to our fair value estimate of $46.
Power Financial Corp. remains on the list from last month. The stock offers a dividend yield of 3.9% and trades at a 3.4% discount to our fair value estimate of $37.
Rogers Communications Inc. remains on the list from last month. The stock offers a dividend yield of 4% and trades at a 4.6% discount to our fair value estimate of $48.
TransCanada Corp. was added to the list this month. The stock offers a dividend yield of 3.5% and trades at a 6.1% discount to our fair value estimate of $58.
