The Canadian Core Buy list turned in a solid February performance, growing 3.6%, but still underperformed the S&P/TSX 60 index's 3.7% gain. The majority of the portfolio's growth during the month was driven by Canadian Natural Resources CNQ, up 11%, which offset an 8.6% decline in Rogers Communication RCI.B shares. The Core Buy list has generated a cumulative return since inception of 141.2%, while the S&P/TSX 60 benchmark has only returned 85.0% -- a difference of 56.2%.
Our model recommended three changes to March's Core Buy list. Enbridge ENB, Telus Corp T and Power Financial Corp PWF all moved up from the Consider Hold list to the Consider Buy list, bumping Tourmaline Oil TOU, National Bank of Canada NA and Canadian Imperial Bank of Commerce CM to the Consider Hold list.
A recap of stocks on this month's Consider Buy List
Canadian Natural Resources remains on the list from last month. The stock trades at a 19% discount to our fair value estimate of $50 per share.
Cenovus Energy remains on the list from last month. The stock trades at a 28.5% discount to our fair value estimate of $41.
Enbridge was added to the list this month. The stock trades at an 11.7% discount to our fair value estimate of $53.
Potash Corp. of Saskatchewan remains on the list from last month. The stock trades at a 10.7% discount to our fair value estimate of $41.
Power Corp. of Canada remains on the list from last month. The stock trades at a 13.5% discount to our fair value estimate of $35.
Power Financial Corp. was added to the list this month. The stock trades at a 5.8% discount to our fair value estimate of $37.
Rogers Communications remains on the list from last month, and trades at a 10.8% discount to our fair value estimate of $48.
TELUS Corp. was added to the list this month. The stock trades at a 6.6% discount to our fair value estimate of $42.
The Canadian Income Buy list underperformed the S&P/TSX 60 Index during February, only returning 1.6% while the index gained 3.6%. Bank of Montreal BMO and Canadian Imperial Bank of Commerce CM turned in strong monthly performances, up 7.2% and 7.1% respectively, but the majority of names were flat while Rogers Communication RCI.B fell 8.6%. Still, since its inception in 2009, the Income Buy list's returns have far outstripped the S&P/TSX 60 Index, gaining 168.2% while the benchmark has returned 85%.
Our model only recommended one change to March's Income Buy list. National Bank of Canada NA was upgraded to the Consider Buy list, while Bank of Montreal fell to the Consider Hold list.
A recap of stocks on this month's Consider Buy List
AGF Management remains on the list this month. The stock offers a dividend yield of 9.4% and trades at a 4.4% discount to our fair value estimate of $12.
Canadian Imperial Bank of Commerce remains on the list this month. The stock offers a dividend yield of 4.2% and trades at a 2.4% discount to our fair value estimate of $95.
Fortis remains on the list this month. The stock offers a dividend yield of 4.2% and trades at a 1.2% discount to our fair value estimate of $31.
National Bank of Canada was added to the list this month. The stock offers a dividend yield of 4.1% and trades at a 1.2% discount to our fair value estimate of $45.
Potash Corp. of Saskatchewan remains on the list this month. The stock offers a dividend yield of 4.3% and trades at a 10.7% discount to our fair value estimate of $41.
Power Corp. of Canada remains on the list this month. The stock offers a dividend yield of 3.8% and trades at a 13.5% discount to our fair value estimate of $35.
Rogers Communications remains on the list from last month. The stock offers a dividend yield of 4.3% and trades at a 10.8% discount to our fair value estimate of $48.
TransCanada Corp. remains on the list this month. The stock offers a dividend yield of 3.9% and trades at an 8% discount to our fair value estimate of $53.
