Portfolio Update – Up 0.02% in January 2014

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

Ticker

Price (C$)

Price Change

Percentage

Industry

DII-B.TO $ 40.30

-0.10%

9.1%

Consumer Cyclical, Home Furnishing
JPM $ 61.62 n/a

9.8%

Finance, Insurance – Property and Casualty
CCA.TO $ 50.51

5.43%

9.1%

Consumer Cyclical, Broadcasting
LB.TO $ 45.60

-2.79%

8.9%

Finance, Financial Services – Diversified
BRK-B $ 124.17

-1.36%

9.5%

Finance, Insurance – Property and Casualty
Cash

53.6%

Cash
Total

100.0%

Overall my portfolio is up 0.02% since last month. There were no cash contributions. For comparison my TI Index is down 0.45%, the DOW is down 5.30% and the TSX is up 0.54%.

The Canadian dollar has slipped almost 5% compared with the US Dollar this month, which elevated the relative value of my US stocks (Berkshire Hathaway and JP Morgan).  This helped preserve my equity as US stocks slipped down 5%.

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

The winner this month was Cogeco (CCA.TO) which is up 5.43%.  It also paid a 30c dividend during the month, which is a further 0.6% gain.  I bought Cogeco only a month ago so I’m gratified with this performance.

The loser was Laurentian Bank (LB.TO) down 2.79%.

I am still carry a lot of cash, pending transfer.

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Portfolio Update – Up 1.50% in October 2013

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

Ticker

Price (C$)

Price Change

Percentage

Industry

POW.TO $ 30.60

5.34%

6.3%

Finance, Specialty
FTT.TO $ 24.04

1.82%

0.0%

Industrial Services and Supplies
TCK-B.TO $ 27.90

0.79%

6.1%

Basic Materials
DII-B.TO $ 38.50

3.89%

6.4%

Consumer Cyclical
IFC.TO $ 65.00

5.33%

6.7%

Finance, Insurance
LB.TO $ 46.54

4.09%

6.7%

Finance, Diversified
BRK-B $ 120.11

2.65%

6.9%

Finance, Insurance
S&P Fund $ 157.31

6.13%

0.0%

US Equities
Bond Fund $ 223.14

1.04%

0.0%

Bonds
Money Market Fund $ 123.60 n/a

43.9%

Cash Equivalent
Cash

17.1%

Cash
Total

100.0%

Overall my portfolio is up 4.24% since last month. Excluding cash contributions the portfolio is up 1.50%.  For comparison my TI Index is up 3.41%, the DOW is up 2.75% and the TSX is up 4.49%.

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

Winners this month include Power Corp (POW.TO) which is up 5.34%, Dorel (DII-B.TO) up 3.89%, Laurentian Bank (LB.TO) up 4.09%, my S&P fund up 6,13%, and Intact Insurance (IFC.TO) up 5.33%.

There were no losers.

Let’s take a look at my value stock portfolio.

Ticker Cost Basis 9/30/2013 Price Now Gain This Month Gain Total
TCK.B $27.03 $27.68 $27.90 0.79% 3.22%
POW.TO $26.20 $29.10 $30.72 5.57% 17.25%
IFC.TO $58.60 $61.78 $65.03 5.26% 10.97%
LB.TO $44.30 $44.74 $46.55 4.05% 5.08%
DII.B $41.01 $37.50 $38.74 3.31% -5.54%
BRK.B $112.48 $113.51 $115.09 1.39% 2.32%
FTT.TO $22.89 n/a $23.56 n/a 2.93%
XRX $8.90 n/a $9.80 n/a 10.11%
Average 3.39% 5.79%

In summary, my value stocks are up 5.79% since purchase, and up 3.39% this month.

I am in the process of moving my S&P fund and my Bond fund to my TD Direct account. In the interim those finds are parked in a money market fund.  I will restore my bond holdings once the transfer is complete.  I have 17.1% cash which I can use to add new positions if prices fall.

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Portfolio Update – Up 1.00% in May 2013

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

Ticker Price (C$) Price Change Percentage Industry
POW.TO $ 29.10 7.26% 6.8% Finance, Specialty
FTT.TO $ 22.66 n/a 6.7% Industrial Services and Supplies
TCK-B.TO $ 27.69 3.32% 6.5% Basic Materials
DII-B.TO $ 41.25 n/a 6.4% Consumer Cyclical
IFC.TO $ 61.35 n/a 7.1% Finance, Insurance
LB.TO $ 44.15 n/a 6.6% Finance, Diversified
XRX $ 9.11 n/a 6.9% Technology
S&P Fund $ 143.64 5.14% 12.9% US Equities
Bond Fund $ 225.35 -1.48% 33.3% Bonds
Cash 6.9% Cash
Total 100.0%

Overall my portfolio is up 1.00% since last month.  There were no cash contributions.  For comparison my TI Index is up 0.48%, the DOW is up 1.86% and the TSX is up 1.56%.

My investments have performed well against the TI Index, which was dragged down by gold and bond prices, but not so well against the pure equities indexes: the TSX and Dow. This is to be expected: it was a good month for equities but not for bonds.

The two value stocks that I bought last month did very well: Teck Resources (TCK-B.TO) is up 7.26% and Power Corp (POW.TO) is up 3.32%.  My S&P Fund is up 5.14%.  My bonds are down 1.48%.

The table above does not show the performance of stocks that were bought during the month (it only shows month-on-month performance).  I bought quite a few stocks this month so I am including an additional table to analyze their performance, as follows.

Ticker Cost basis Price today Gain (Loss)
TCK.B $27.03 $27.69 2.44%
POW.TO $26.20 $29.10 11.07%
IFC.TO $58.60 $61.35 4.69%
LB.TO $44.30 $44.15 -0.34%
FTT.TO $22.89 $22.66 -1.00%
XRX $8.90 $8.79 -1.24%
DII.B $41.01 $41.25 0.59%
Average 2.32%

In summary, my value stocks have gained 2.32% since buying them.  Performance would have been much better were it not for a sudden downturn in the two hours of trading today, during which the TSX fell 0.5% and the Dow fell 1%.  I bought Xerox (XRX) and Laurential Bank (LB.TO) today, and both are down materially!

My bond holdings are at 33.3%, which is very close to my target of 33.5%.  I have 6.9% cash which I can use to add another new position if prices fall.

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Getting into Laurentian Bank

ImageLaurentian Bank (LB.TO) meets my screening criteria.

Laurentian is a Canadian bank that provides retail and business banking services to individuals and small business across Canada.  It is headquartered in Montreal, QC.

Unlike the “big five” banks – CIBC, TD, Royal, Scotia and TD – Laurentian does not have overseas operations, which gives it a different risk profile: less risk caused by the Eurozone debt crisis and  US economic health, but less diversification in the event of economic trouble here in Canada.

ImageI analyzed the stock using my usual procedures. The results are as follows.

  • The P/E Ratio is 8.70, which is much lower than the average historical P/E of 10.43, and the Graham Number is a whopping $79.23
  • The Dividend Yield is 4.42%, and the coverage is 260%
  • Forecast Growth Rate is marginal at 3.50%, compared with 5.71% historically, which is likely why the P/E Ratio is lower than its historical average
  • The Gordon Return (Dividend + Growth) is 7.93%, which is low
  • The Margin of Safety at current prices is 15%. This is quite high, and this gives me confidence to take the risk of buying the stock with a return below 10%.

I believe that the stock is fairly priced here.

  • Buy LB.TO @ $44.30