[printfriendly] Also available in PDF for best viewing and printing results.
McMurtry Investment Report – Portfolios (June 2017)
|Cash||Alterna Bank – High Interest Savings (1.9% current rate)||Alterna Bank – High Interest Savings (1.9% current rate)|
|Bonds||iShares XSB Short Term||iShares XSB Short Term|
|iShares XFR Floating Rate||iShares XFR Floating Rate|
|iShares CBO 1-5 Ladder Corp||iShares CBO 1-5 Ladder Corp|
|iShares CLF 1-5 Ladder Gov’t||iShares CLF 1-5 Ladder Gov’t|
|Preferreds||Security||Dividend Yield %||Security||Dividend Yield %|
|Enbridge Pfd V Enb.pr.V US||4.27||Enbridge Pfd V Enb.pr.V US||4.27|
|Horizons Active Mgt. Pfd HPR||4.22||Horizons Active Mgt. Pfd HPR||4.22|
|Common Stocks||Security||Dividend Yield %||Security||Dividend Yield %|
|Financials||Royal Bank RY||3.73||Royal Bank RY||3.73|
|TD Bank TD||3.73||TD Bank TD||3.73|
|Sun Life SLF||3.92||Sun Life SLF||3.92|
|Citibank C US||1.06||Citibank C US||1.06|
|JP Morgan JPM US||2.43||JP Morgan JPM US||2.43|
|Bank of America BAC US||1.34||Bank of America BAC US||1.34|
|Manulife MFC||3.51||Manulife MFC||3.51|
|Blackrock BLK US||2.44||Blackrock BLK US||2.44|
|T. Rowe Price TROW US||3.24||T. Rowe Price TROW US||3.24|
|iUnits US Regional Banks IAT US||1.52||iUnits US Regional Banks IAT US||1.52|
|Visa V US||0.69|
|First Data FD US||0.00|
|Energy||Suncor SU||3.03||Suncor SU||3.03|
|Freehold FRU||4.64||Freehold FRU||4.64|
|Whitecap WCP||3.05||Whitecap WCP||3.05|
|Torc TOG||4.41||Torc TOG||4.41|
|Pembina Pipe Lines PPL||4.73||Pembina Pipe Lines PPL||4.73|
|Inter Pipeline IPL||5.83||Spartan SPE||0.00|
|Centennial Resources CDEV US||0.00|
|Materials||Agnico Eagle AEM||0.83||Agnico Eagle AEM||0.83|
|Franco Nevada FN||1.25||Franco Nevada FN||1.25|
|Trevali Mining TV||0.00|
|Industrials||New Flyer Ind. NFI||1.71||New Flyer Ind NFI||1.71|
|WSP Global WSP||2.98||WSP Global WSP||2.98|
|Canadian Pacific CP||1.05||Canadian Pacific CP||1.05|
|Apogee APOG US||1.05||Apogee APOG US||1.05|
|General Dynamics GD US||1.65||General Dynamics GD US||1.65|
|Consumer Discretionary||Canadian Tire A CTC.A||1.69||Canadian Tire A CTC.A||1.69|
|Home Depot HD US||2.32||Home Depot HD US||2.32|
|Sleep Canada ZZZ||1.69||Sleep Canada ZZZ||1.69|
|Stanley Black and Decker SWK US||1.69||Stanley Black and Decker SWK US||1.69|
|Telecom||BCE BCE||4.69||BCE BCE||4.69|
|Rogers B RCI.B||3.05||Rogers B RCI.B||3.05|
|Consumer Staples||Alimentation Couche Tard ATD.b||0.58||Alimentation Couche Tard ATD.b||0.58|
|Loblaws L||1.41||Loblaws L||1.41|
|Pepsico PEP US||2.76||Pepsico PEP US||2.76|
|Kraft Heinz KHC US||2.60||Kraft Heinz KHC US||2.60|
|Technology||Apple AAPL US||1.65||Apple AAPL US||1.65|
|Microsoft MSFT US||2.23||Microsoft MSFT US||2.23|
|Facebook FB US||0.00|
|Nvidia NVDA US||0.39|
|Alphabet GOOGL US||0.00|
|Utilities||Fortis FTS||3.60||Fortis FTS||3.60|
|Healthcare||AmerisourceBergen ABC US||1.59||AmerisourceBergen ABC US||1.59|
|Johnson & Johnson JNJ US||2.62||Johnson & Johnson JNJ US||2.62|
|Walgreen Boots WBA US||1.85||Walgreen Boots WBA US||1.85|
|Merck MRK||2.89||Merck MRK||2.89|
|CVS CVS US||2.60||CVS CVS US||2.60|
|IBB Biotech ETF IBB US||0.17|
|Knight Therapeutics GUD||0.00|
|Real Estate||Cdn Apt. REIT CAR.un||3.82||Cdn. Apt. REIT CAR.un||3.82|
|Chartwell REIT CSH.un||3.50||Chartwell REIT CSH.un||3.50|
|Pure Industrial AAR.un||4.53||Pure Industrial AAR.un||4.53|
|European Equity||BMO European ETF ZEQ||1.97||BMO European ETF ZEQ||1.97|
|Emerging Markets||Horizons Active Emerg. Mkts HAJ||1.85||Horizons Active Emerg. Mkts HAJ||1.85|
Investment Commentary June 2017
I am leaving my asset mix recommendations for both portfolios the same as last month.
While equity markets remain on the expensive side, both corporate profit and revenue growth is exhibiting strong year over year comparisons.
In this type of economy where the probability of a recession in the near future is remote, equity markets still may experience a value correction at any time. However these type of corrections have historically been buying opportunities.
In terms of equity sector weights, I remain overweight Financials, Industrials, Consumer Discretionary and Technology.
I remain underweight Energy, Materials, Consumer Staples, Real Estate, Telecom and Utilities.
Although the yield curve has flattened since the US election, I still expect interest rates to rise and the yield curve to steepen. Consequently financials should perform well under this scenario. The recent price weakness has encouraged me to add both Citibank and TD Bank to both my Income and Growth Portfolios. Citibank has great exposure to non North American economies and remains a cheap stock. TD is benefitting from its large US branch network. In addition the recent allegations brought against the bank for its aggressive sales practices do not appear to be unique to TD nor as serious as originally thought.
I have also added Blackrock, the asset manager that is the largest issuer of exchange traded funds in North America. The company is benefitting from the industry trend away from active management to passive management.
The energy sector remains in a state of uncertainty with US shale production more than offsetting any OPEC cuts in production. Taking into consideration this uncertainty, I have increased my underweight of this sector relative to the benchmark weights. However I added Centennial Resources, a US shale producer in Texas to my Growth portfolio. The company has a very healthy balance sheet combined with a strong projected increase in production.
As the outlook for Industrials remains positive with the expected increase in infrastructure spending, I added Apogee, a US designer and developer of glass solutions for the exterior of commercial buildings to both my Income and Growth portfolios. The company has a strong balance sheet and is growing its earnings nicely.
The technology sector remains the hottest equity sector. I am removing Cisco from my Income Portfolio. The company is having difficulty competing in this new environment.
One of the fastest growing areas is Artificial Intelligence or robotics. In this regard I am adding the semiconductor company, Nvidia that is the current leader in developing the mobile processing technology for driverless cars. The stock is not cheap and has already risen sharply over the last year. However the growth in revenues is expected to remain robust for the next several years.
I am adding Canadian Tire to both my Income and Growth portfolios in the consumer discretionary area. The company continues to deliver strong results in this very competitive environment.
Finally, I am leaving Healthcare at Market Weight but am adding Knight Therapeutics to my Growth portfolio. This is a Canadian company founded by Jonathan Goodman who previously co-founded and sold Paladin Labs for $3.2 billion. Knight has a very strong balance sheet with virtually no debt and $805.4 million in cash and equivalents representing $5.64 per share. The share price is $9.92 per share and the cash component is a large part of this value. The company is a value play that is waiting to make a large accretive acquisition.
McMurtry Investment Report – Sector Weights (June 2017)
|Equity Sector Weights (%)|
|Sector||My Weight||TSX Comp||S&P 500||50/50|
McMurtry Investment Report Asset Mix (June 2017)
|Asset Mix – Income and Growth Portfolios|