The Canadian Core Buy list began 2014 on a positive note by returning 1.1% during January and outperforming the S&P/TSX 60 Index, which only gained 0.5%. The majority of the portfolio's growth during the month was driven by Cameco Corp. CCO and Telus Corp. T, which grew 7.4% and 6.5% respectively, and successfully offset losses from Power Corporation of Canada POW and Cenovus Energy CVE, down 5.3% and 4.1% respectively. The Core Buy list has generated a cumulative return since inception of 132.8%, while the S&P/TSX benchmark has only returned 78.4% -- a difference of 54.4%.
Our model recommended two changes to February's Core Buy list. Canadian Imperial Bank of Commerce CM and National Bank of Canada NA both reappeared on the Consider Buy list, bumping Cameco and Telus to the Consider Hold list. Additionally, Shaw Communications SJR.B was dropped after spending over three months on our Consider Sell list.
A recap of stocks on this month's Consider Buy List
Canadian Imperial Bank of Commerce was added to the list this month. The stock trades at an 8.9% discount to our fair value estimate of $95.
Canadian Natural Resources remains on the list from last month. The stock trades at a 20.6% discount to our fair value estimate of $46 per share.
Cenovus Energy remains on the list from last month. The stock trades at a 28.9% discount to our fair value estimate of $41.
National Bank of Canada was added to the list this month. The stock trades at a 7.3% discount to our fair value estimate of $90.
Potash Corp. of Saskatchewan remains on the list from last month. The stock trades at a 13.6% discount to our fair value estimate of $41 and offers a wide economic moat.
Power Corp. of Canada remains on the list from last month. The stock trades at a 13.6% discount to our fair value estimate of $35.
Rogers Communications remains on the list from last month, and trades at a 17.8% discount to our fair value estimate of $57.
Tourmaline Oil Corporation remains on the list from last month. The stock trades at a 41% discount to our fair value estimate of $63.
The Canadian Income Buy list underperformed the S&P/TSX 60 during January, falling 1.8% while the index returned 0.5%. While Telus Corp. T turned in a strong monthly performance, up 6.5%, six of the eight companies on the Consider Buy list lost ground, led by an 8% fall in Bank of Nova Scotia BNS. Since its inception in 2009, the Income Buy list's returns have still far outstripped the S&P/TSX 60 Index, returning 164% while the benchmark has only returned 78.4%.
Our model recommended three changes to February's Income Buy list. AGF Management AGF.B, Canadian Imperial Bank of Commerce CM and Rogers Communications RCI.B were upgraded to the Consider Buy list, bumping Power Financial Corp PWF, Bank of Nova Scotia and Telus to the Consider Hold list. Additionally, Shaw Communications SJR.B was dropped after spending over three months on our Consider Sell list.
A recap of stocks on this month's Consider Buy List
AGF Management was added to the list this month. The stock offers a dividend yield of 9.5% and trades at a 5% discount to our fair value estimate of $12.
Bank of Montreal remains on the list this month. The stock offers a dividend yield of 4.5% and trades at a 5.5% discount to our fair value estimate of $72.
Canadian Imperial Bank of Commerce was added to the list this month. The stock offers a dividend yield of 4.4% and trades at an 8.9% 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.
Potash Corp. of Saskatchewan remains on the list this month. The stock offers a dividend yield of 4.5% and trades at a 14.8% discount to our fair value estimate of $41.
Power Corp. of Canada remains on the list this month. The stock offers a wide economic moat, a dividend yield of 3.8% and trades at a 13.6% discount to our fair value estimate of $35.
Rogers Communications was added to the list this month. The stock offers a dividend yield of 3.7% and trades at a 17.8% discount to our fair value estimate of $57.
TransCanada Corp. remains on the list this month. The stock offers a dividend yield of 3.8% and trades at an 8.6% discount to our fair value estimate of $53.
