The Canadian Core Buy list posted strong performance during the month of August following a slight underperformance relative to the S&P/TSX 60 in July. The Core Buy list surpassed the index with a total return of 3.13% compared to 1.72% for the S&P/TSX 60 Index.
The portfolio's rise this month was primarily driven by Tourmaline Oil TOU and Encana Corp. ECA, with total returns of 7.3% and 6.8%, respectively. These gains were marginally offset by Potash Corp. of Saskatchewan POT, posting a total return of -1.3%. The Core Buy list has generated a cumulative return since inception of 180%, while the S&P/TSX benchmark has returned 107.3%, a difference of 72.7 percentage points.
Our model recommended several changes to September's Core Buy list. Cameco Corp. CCO and Power Corporation of Canada POW moved up from the Consider Hold list to the Consider Buy list, displacing Cenovus Energy CVE and TELUS Corp. T and transferring each to the Consider Hold list.
A recap of stocks on this month's Consider Buy List
Cameco Corp. was added to the list this month. The Stock trades at an 11.4% discount to our fair value estimate of $24.
Encana Corp. remains on the list this month. The stock trades at a 16.4% discount to our fair value estimate of $30.
IGM Financial remains on the list from last month. The stock trades at a 5.7% discount to our fair value estimate of $55.
Potash Corp. of Saskatchewan remains on the list this month. The stock trades at a 13.2% discount to our fair value estimate of $44.
Power Corporation of Canada was added to the list this month. The stock trades at an 8.5% discount to our fair value estimate of $35.
Rogers Communications remains on the list from last month. The stock trades at a 7.7% discount to our fair value estimate of $48.
Tourmaline Oil Corp. remains on the list from last month. The stock trades at a 16.6%% discount to our fair value estimate of $66.
Valeant Pharmaceuticals Intl remains on the list this month. The stock trades at a 12.2% discount to our fair value estimate of $145.
The Canadian Income Buy list outperformed the S&P/TSX 60 index in August, posting a total return of 2.45% compared to the benchmark's 1.72%. Leading the Buy list were TransCanada Corp. TRP and AGF Management Ltd. AGF.B with total returns of 6.8% and 5.3%, respectively. The main laggard within the Core Buy list was Potash Corp. of Saskatchewan POT with a total return of -1.3%.
The Income Buy list has generated a cumulative return since inception of 199.6%, while the S&P/TSX benchmark has returned 107.3%, a difference of 92.4 percentage points.
Our model recommended several changes to September's Income Buy list. AGF Management Ltd and TransCanada Corp were each moved from the Consider Buy list to the Consider Hold list and were replaced by Power Corp. of Canada POW and Vermillion Energy VET, each of which were previous constituents of the Consider Hold list. Additionally, Bank of Montreal BMO fell from our Consider Hold list to our Consider Sell list.
A recap of stocks on this month's Consider Buy List
BCE Inc. remains on the list this month. The stock offers a dividend yield of 5.1% and trades at a 2% discount to our fair value estimate of $50.
IGM Financial remains on the list from last month. The stock offers a dividend yield of 4.1% and trades at a 5.7 % discount to our fair value estimate of $55.
Potash Corp. of Saskatchewan remains on the list from last month. The stock offers a dividend yield of 3.9% and trades at a 13.2% discount to our fair value estimate of $44.
Power Corp. of Canada was added to the list this month. The stock offers a dividend yield of 3.6% and trades at an 8.5% discount to our fair value estimate of $35.
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.
Rogers Communications remains on the list from last month. The stock offers a dividend yield of 4% and trades at a 7.7% discount to our fair value estimate of $48.
Telus Corp. remains on the list from last month. The stock offers a dividend yield of 3.8% and trades at a 5.6% discount to our fair value estimate of $42.
Vermillion Energy was added to the list this month. The stock offers a dividend yield of 3.6% and trades at a 5.7% discount to our fair value estimate of $75.
