The Canadian Core Buy list posted muted performance during the month of October after outperforming the S&P/TSX 60 Index in September. The Core Buy list trailed the index with a total return of -3.6% compared to -1.4% for the index.
Total returns from constituents of the Core Buy list were varied, as TELUS Corp. T recorded the largest gain at 5.6% while Tourmaline Oil Corp. TOU weighted down the portfolio with a loss of 19.3%. Other large moves include Cenovus Energy Inc CVE and IGM Financial Inc. IGM, with total returns of -7.4% and -6.7%, respectively. The Core Buy list retains its cumulative outperformance against the benchmark, with a total return since inception of 164.2% versus 97.1% for the benchmark S&P/TSX, a difference of 67.1 percentage points.
Our model recommended several changes to November's Core Buy list. SU and TELUS Corp. were moved to the Consider Hold list and were replaced by two previous "Hold" names, Encana Corp. ECA and Power Corporation of Canada POW.
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 18.5% discount to our fair value estimate of $24.
Cenovus Energy Inc. remains on the list from last month. The stock trades at a 28.5% discount to our fair value estimate of $39.
Encana Corp. was added to the list this month. The stock trades at a 38.2% discount to our fair value estimate of $34.
IGM Financial Inc. remains on the list from last month. The stock trades at a 9.8% discount to our fair value estimate of $50.
Potash Corp. of Saskatchewan Inc. remains on the list from last month. The stock trades at a 16.4% discount to our fair value estimate of $46.
Power Corporation of Canada was added to the list this month. The stock trades at a 15% discount to our fair value estimate of $35.
Rogers Communications Inc. remains on the list from last month. The stock trades at an 11.7% discount to our fair value estimate of $48.
Tourmaline Oil Corp. remains on the list from last month. The stock trades at a 38.7% discount to our fair value estimate of $66.
The Canadian Income Buy list underperformed the S&P/TSX 60 Index in October, posting a total return of -3.8% to the benchmark's -1.4%. AGF Management AGF.B and ARC Resources Ltd. ARX were the primary lagers of the Income Buy list, with total returns of -10% and -9.7%, respectively. TELUS Corp. T led the constituents' gains with a total return of 5.6% during the month of October.
The Income Buy list has generated a cumulative return since inception of 181.3%, while the S&P/TSX benchmark has returned 97.1% over the same period, a difference of 84.2% percentage points.
Our model recommended one change to our Income Buy list for the month of November. BCE Inc. BCE was transferred to the Consider Hold list from the Consider Buy list, switching positions with Cenovus Energy Inc. CVE.
A recap of stocks on this month's Consider Buy List
AGF Management Ltd. was added to the list this month. The stock offers a dividend yield of 9.1% and trades at a 1.5% discount to our fair value estimate of $12.
BCE Inc. was added to the list this month. The stock offers a dividend yield of 5% and trades at a 1.2% discount to our fair value estimate of $50.
IGM Financial Inc. remains on the list from last month. The stock offers a dividend yield of 4.2% and trades at a 6.5% discount to our fair value estimate of $55.
Power Financial Corp. remains on the list from last month. The stock offers a dividend yield of 4% and trades at a 5% discount to our fair value estimate of $37.
Potash Corp of Saskatchewan Inc. remains on the list from last month. The stock offers a dividend yield of 3.9% and trades at a 12% discount to our fair value estimate of $44.
Rogers Communications Inc. remains on the list from last month. The stock offers a dividend yield of 4.3% and trades at a 11.3% discount to our fair value estimate of $48.
TELUS Corp. remains on the list from last month. The stock offers a dividend yield of 4% and trades at a 9.4% discount to our fair value estimate of $42.
TransCanada Corp. remains on the list from last month. The stock offers a dividend yield of 3.5% and trades at a 5.7% discount to our fair value estimate of $58.
