Portfolio Update – Up 1.08% in November 2016

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

Ticker

Price (C$)

Price Change

Percentage

XSP $‎ 25.32

3.69%

21.7%

XMU $‎ 40.57

0.85%

17.1%

XMW $‎ 34.95

-1.44%

22.3%

BNS.TO $‎ 74.14

2.86%

3.6%

BCE.TO $‎ 57.89

-5.00%

3.2%

CM.TO $‎ 105.98

5.45%

3.5%

ENB.TO $‎ 56.50

-2.45%

3.3%

NA.TO $‎ 50.32

5.10%

3.6%

POT.TO $‎ 24.50

12.33%

4.0%

PWF.TO $‎ 33.92

7.00%

3.7%

SJR.B $‎ 26.29

-1.09%

3.5%

SXP.TO $‎ 5.13

-10.63%

3.2%

T.TO $‎ 41.96

-3.38%

3.4%

TRP.TO $‎ 60.33

-0.64%

3.4%

Cash

0.5%

Total

100.0%

Overall my portfolio is up 1.08% since last month. There were no cash contributions this month. For comparison my TI Index is up 0.86%, the DOW is up 5.41% and the TSX is up 2.00%. My investments are up and performed well against the TI Index (which contains gold and bonds, both down) but poorly against the TSX and the DOW.

Winners this month include CIBC (CM.TO) up 5.45%, National Bank (NA.TO) up 5.10% and Power Financial (PWF.TO) up 7.00%, and Potash Corp (POT.TO) up 12.33%.

Losers are BCE (BCE.TO) down 5.00%, and Supremex (SXP.TO) down 10.63%.

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Portfolio Update – Down 0.27% in October 2016

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

Ticker

Price (C$)

Price Change

Percentage

XSP $‎ 24.42

-1.73%

21.1%

XMU $‎ 40.23

-0.67%

17.2%

XMW $‎ 35.46

-0.87%

22.8%

BNS.TO $‎ 72.08

3.70%

3.5%

BCE.TO $‎ 60.94

0.63%

3.4%

CM.TO $‎ 100.50

-1.20%

3.4%

ENB.TO $‎ 57.92

0.45%

3.4%

NA.TO $‎ 47.88

2.97%

3.5%

POT.TO $‎ 21.81

2.15%

3.6%

PWF.TO $‎ 31.70

4.34%

3.5%

SJR.B $‎ 26.58

-0.89%

3.6%

SXP.TO $‎ 5.74 n/a

3.3%

T.TO $‎ 43.43

0.37%

3.6%

TRP.TO $‎ 60.72

-2.55%

3.4%

Cash

0.7%

Total

100.0%

Overall my portfolio is down 0.27% since last month. There were no cash contributions this month. For comparison my TI Index is down 0.78%, the DOW is down 0.91% and the TSX is up 0.42%. My investments are flat and performed poorly against the TSX but well against the DOW.

Winners this month include Bank of Nova Scotia (BNS.TO) up 3.70% and Power Financial PWF.TO) up 3.43%.

Loser is Transcanada (TRP.TO) down 2.55%.

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Portfolio Update – Up 1.32% in June 2016

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

Ticker

Price (C$)

Price Change

Percentage

XSP $‎ 23.97

-0.83%

21.3%

XMU $‎ 40.66

2.34%

17.8%

XMW $‎ 35.49

2.42%

23.5%

BNS.TO $‎ 63.31

-1.29%

3.8%

BCE.TO $‎ 61.14

1.14%

3.5%

CM.TO $‎ 97.04

-4.63%

3.7%

ENB.TO $‎ 54.73

4.69%

4.0%

NA.TO $‎ 44.19

1.54%

3.8%

POT.TO $‎ 21.00

-1.87%

3.6%

PWF.TO $‎ 29.65

-6.58%

3.2%

SJR.B $‎ 24.80

-1.12%

3.4%

T.TO $‎ 41.60

0.07%

3.5%

TRP.TO $‎ 58.46

7.58%

4.1%

Cash

0.6%

Total

100.0%

Overall my portfolio is up 1.32% since last month. There were no cash contributions this month. For comparison my TI Index is down 0.49%, the DOW is up 0.80% and the TSX is down 0.01%. My investments are up and performed very well against these indexes, as they did last month.

Winners this month include Enbridge (ENB.TO) up 4.69% and TransCanada (TRP.TO) up 7.58%. These are both pipeline companies.

Losers are CIBC (CM.TO) down 4.63% and Power Financial (PWF.TO) down 6.58%. Both financials.

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Beating the TSX (again)

After a year of lacklustre performance by the TSX I have decided to re-apply the BTSX approach. My stocks for 2016 are:

  • Bank of Nova Scotia
  • BCE Inc.
  • Canadian Imperial Bank of Commerce
  • Enbridge Inc
  • National Bank of Canada
  • Potash Corporation of Saskatchewan Inc
  • Power Financial Corp
  • Shaw Communications Inc
  • TELUS Corporation
  • TransCanada Corporation

The BTSX system underperformed the TSX by 0.9% last year. The return for the BTSX portfolio was -8.5%. XIU returned -7.6% (both losses). Generally BTSX outperforms the TSX handily.

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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