Portfolio Update – Down 0.82% in January 2015

My portfolio balances at close of trading on 30th January were:

Ticker

Price (C$)

Price Change

Percentage

AGU.TO $ 135.57

23.25%

4.8%

BBD.B $ 2.90

-30.12%

2.6%

BCE.TO $ 58.36

9.53%

4.1%

BMO.TO $ 72.93

-11.26%

3.6%

CM.TO $ 88.18

-11.68%

3.1%

CSU.TO $ 352.09

1.93%

3.6%

CVE.TO $ 24.07

0.42%

3.0%

ENB.TO $ 61.55

3.03%

4.1%

FTS $ 41.91

7.57%

4.6%

HSE $ 27.35

-0.55%

2.7%

MFC.TO $ 20.38

-8.12%

3.7%

NA $ 44.21

-10.58%

3.4%

POT.TO $ 46.26

12.64%

4.1%

POW $ 30.64

-3.53%

3.7%

RCI.B $ 45.18

0.02%

3.5%

RY.TO $ 71.74

-10.59%

3.5%

SJR.B $ 29.34

-6.41%

3.8%

SLF.TO $ 38.86

-7.30%

3.8%

SU.TO $ 37.90

2.71%

3.2%

T.TO $ 43.59

4.06%

3.9%

TCK.B $ 16.45

3.59%

2.4%

SCTY $ 61.69

-0.74%

2.2%

TRP.TO $ 56.54

-0.98%

4.0%

XBB $ 32.84

4.39%

8.1%

XSP $ 22.98

-3.20%

7.1%

Cash

3.2%

Total

100.0%

Overall my portfolio is down 0.82% since last month. There were no cash contributions. For comparison my TI Index is up 0.62%, the DOW is down 3.69% and the TSX is up 0.28%. My investments are down and performed poorly against the TSX.

Winners this month include Agrium (AGU.TO) up 23.25%, BCE (BCE.TO) up 9.53%, Fortis (FTS.TO) up 7.57%, Potash (POT.TO) up 12.64%.

Losers include Bombardier (BBD-B.TO) down 30.12%, CIBC (CM.TO) down 11.68%, Bank of Montreal (BMO.TO) down 11.26%, National Bank (NA.TO) down 10.58%, Royal Bank (RY.TO) down 10.59%, Shaw (SJR-B.TO) down 6.41% and Sun Life (SLF.TO) down 7.30%.

It was a very volatile month with many stocks experiencing big gains and many experiencing big losses.  The banks are all down 10% or more.

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Portfolio Update – Up 2.98% in July 2014

My portfolio balances at close of trading on 31st July were:

Ticker

Price (C$)

Price Change

Percentage

AGU.TO $ 99.40

1.69%

3.9%

BBD.B $ 3.73

-1.06%

3.8%

BCE.TO $ 49.38

2.02%

3.9%

BMO.TO $ 81.27

3.42%

4.5%

BNS.TO $ 74.01

4.03%

0.0%

CM.TO $ 101.21

4.23%

4.0%

CSU.TO $ 259.00

-4.77%

3.8%

ENB.TO $ 53.45

5.57%

4.0%

FTS $ 33.55

3.33%

4.1%

HSE $ 33.17

-3.74%

3.7%

L.TO $ 53.63

12.62%

4.7%

MFC.TO $ 22.28

5.04%

4.5%

NA $ 48.80

7.82%

4.2%

POT.TO $ 38.71

-4.61%

3.8%

POW $ 32.08

8.20%

4.3%

RCI.B $ 42.58

-0.84%

3.7%

RY.TO $ 80.47

5.49%

4.5%

SJR.B $ 26.72

-2.34%

3.9%

SLF.TO $ 41.57

5.99%

4.6%

SU.TO $ 44.77

-1.60%

4.3%

T.TO $ 38.06

-4.30%

3.8%

TCK.B $ 26.13

7.27%

4.2%

TD.TO $ 57.02

3.80%

0.0%

TRP.TO $ 54.70

7.40%

4.3%

XBB $ 30.96

0.23%

8.6%

Cash

0.8%

Total

100.0%

Overall my portfolio is up 2.98% since last month. There were no cash contributions. For comparison my TI Index is up 0.13%, the DOW is down 1.56% and the TSX is up 1.22%.

My investments are up and performed very well against all indexes.

Winners this month include Bank of Montreal (BMO.TO) up 3.42%, CIBC (CM.TO) up 4.23%, Enbridge (ENB.TO) up 5.57%, Fortis (FTS.TO) up 3.33%, Loblaws (L.TO) up 12.62%, Manulife (MFC.TO) up 5.04%, National Bank (NA.TO) 7.82%, Power Corp (POW.TO) 8.20%, Royal Bank (RY.TO) up 5.49%, Sun Life (SLF.TO) up 5.99, and TransCanada (TRP.TO) up 7.40%.

Losers this month include Constellation Software (CSU.TO) down 4.77%, Husky (HSE.TO) down 3.74%, Potash (POT.TO) down 4.61%, and Telus (T.TO) down 4.30%.

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Portfolio Update – Up 1.72% in June 2014

My portfolio balances at close of trading on 30th June were:

Ticker

Price (C$)

Price Change

Percentage

AGU.TO $97.75

0.40%

4.0%

BBD.B $3.77

2.17%

4.0%

BCE.TO $48.40

-2.89%

3.9%

BMO.TO $78.58

3.02%

4.5%

BNS.TO $71.14

2.17%

0.0%

CM.TO $97.10

1.51%

4.0%

CSU.TO $271.96

11.00%

4.1%

ENB.TO $50.63

-1.75%

3.9%

FTS $32.47

-0.22%

4.1%

HSE $34.46

-5.77%

3.9%

L.TO $47.62

4.20%

4.3%

MFC.TO $21.21

6.85%

4.4%

NA $45.26

-0.53%

4.1%

POT.TO $40.58

3.13%

4.1%

POW $29.65

1.61%

4.1%

RCI.B $42.94

-2.01%

3.9%

RY.TO $76.28

2.20%

4.4%

SJR.B $27.36

1.37%

4.1%

SLF.TO $39.22

6.87%

4.5%

SU.TO $45.50

9.03%

4.5%

T.TO $39.77

-2.88%

4.1%

TCK.B $24.36

0.79%

4.1%

TD.TO $54.93

2.18%

0.0%

TRP.TO $50.93

0.89%

4.2%

XBB $30.89

1.05%

8.8%

Cash    

0.3%

Total    

100.0%

Overall my portfolio is up 1.72% since last month. There were no cash contributions.  For comparison my TI Index is up 2.02%, the DOW is up 0.65% and the TSX is down 3.71%.

My investments are up and performed well against the DOW, but poorly against the TSX and the TI Index.

Winners this month include Bank of Montreal (BMO.TO) up 3.02%, Constellation Software (CSU.TO) up 11.00%, Loblaws (L.TO) up 4.20%, Manulife (MFC.TO) up 6.85%, Potash Corp (POT.TO) up 3.13%, Sunlife (SLF.TO) up 6.87%, and Suncor (SU.TO) up 9.03%.

Losers this month include Husky (HSE.TO) down 5.77%.

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Beating the TSX in 2013

Back in March 2012 I performed an analysis of the Beating the TSX portfolio. I thought it might be time to take another look.  Here is the methodology:

  • Begin with the TSX60 stocks.
  • Remove any stocks with a dividend of less than 3%. This minimizes the number of stocks I need to analyze.
  • Remove any stocks that might have an unsustainable dividend. For this I remove any stock with a payout ratio above 1.2 (equivalent to a coverage of less than 83%). I also remove any former trusts.
  • Finally, select the ten stocks with the highest dividends.

The analysis looks like this:

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The resulting list is as follows.

  1. BCE Inc.
  2. Bank of Montreal
  3. Canadian Imperial Bank Of Commerce
  4. Power Corporation of Canada
  5. National Bank of Canada
  6. Shaw Communications Inc.
  7. Bank of Nova Scotia (The)
  8. Husky Energy Inc.
  9. Royal Bank of Canada
  10. TELUS Corporation

Interestingly, four of the companies on the earlier list have fallen off as they no longer have a sustainable payout ratio.  These decliners are:

  • Manulife Financial Corporation
  • Sun Life Financial Inc.
  • TransAlta Corporation
  • Thomson Reuters Corporation

Portfolio Update – Up 1.86% in January 2013

My portfolio balances at close of trading on 31st January were:

Ticker Price (C$) Price Change Percentage Industry
T.TO $ 67.39 3.52% 4.9% Telecommunications
COS.TO $ 20.99 4.07% 5.6% Energy
PHY-U.TO $ 14.24 1.39% 5.3% Gold
POW.TO $ 26.23 3.35% 4.9% Financials
BMO.TO $ 62.99 3.50% 0.0% Financials
AAPL $ 454.44 -13.40% 5.9% Information Technology
INTC $ 20.99 3.24% 3.6% Information Technology
IVV $ 150.11 6.35% 9.0% US Equity Fund
XIU.TO $ 18.31 2.18% 6.2% Canadian Equity Fund
S&P Fund $ 126.65 5.49% 10.3% US Equity Fund
EAFE Fund $ 98.23 5.58% 11.1% Global Equity Fund
Bond Fund $ 223.00 -0.75% 24.4% Bond Fund
Cash 8.6% Cash
Total 100.0%

Overall my portfolio is up 1.86% since last month.  For comparison my TI Index is up 2.09%, the DOW is up 5.77% and the TSX is up 2.02%.

My investments have performed slightly less well than these indices.  Winners this month include Telus (T.TO) up 3.52%, Canadian Oil Sands (COS.TO) up 4.07%, Power Corp (POW.TO) up 3.35%, Bank of Montreal (BMO.TO) up 3.50%, Intel (INTC) up 3.24%, and my index funds which are up 3-6%.  Losers include Apple (AAPL) down 13.40% and Bonds which are down 0.75%.

My bond holdings are at 24.4%, which is a little lower than my target of 25%. I will rebalance.

Lowering risk on Canadian Banks

Bank of Montreal (BMO.TO) has had a very good run lately.  I purchased the stock on 4th September 2012 at $57; it closed today at $64.53 (up 13.2% in less than five months).  There have been rumblings about the health of Canadian banks and today Moddy’s donwgraded six Canadian banks.  It’s time to take some profits so I asked my Financial Adviser to sell 25% of my position.

  • Sell BMO.TO @ $64.50

There was a problem though.  My Financial Adviser sold 100% of my position!  This has happened before.

Analysis of the Financial Sector: the Banking and Insurance Industries

The banks are all offering a rate of return (IRR) of 9 or 10%, which is quite good.  Strongest returns (10% or more) are offered by Bank of Montreal (BMO.TO), which I own, National Bank (NA.TO) and CIBC (CM.TO).  Of these three, BMO offers the highest dividend.

Banking is a low growth industry: none of the banks offer a PEG Ratio below 1; and none of the banks has an earnings growth rate of 9% or more.

I’m happy with BMO.

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In contrast to the banks, the insurers mostly seem to offer an IRR of 11% or more.  The lowest is Power Corp (POW.TO) at 9.99%, which is the one insurer that I own!

From a PE Ratio perspective, Indus Alliance (IAG.TO) and Manulife (MFC.TO) offer the best value.  Manulife also has a PEG Ratio below 1, as do Power Financial (PWF.TO) and Power Corp.  Manulife also has a decent dividend, although second lowest amongst the six insurers analyzed.

Power Corp, which I own, has PE Ratio of 11.1 (a high price for this group) but, due to strong growth estimates, it has a has a PEG Ratio below 1 (the growth justifies the price).  It has a decent dividend but, like Manulife, not best in class.  Dividend coverage is not as strong as Manulife’s.

Overall, I’d say that Manulife is a better value stock than Power Corp, but I don’t feel strongly enough about this to trade at this point.  I’ll stick with Power Corp.

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