December Update

Good day,

Here are some fresh comments compiled by our Portfolio Management crew this week:

“Markets have been interesting as of late. The previously strong sectors and asset classes such as Info Tech and Low Volatility names have turned weak, while previous laggers in the Industrial, Financial and Energy space are now leading the way. In on our core portfolio we sold Bell Canada Enterprises and bought CP Rail. As mentioned before, fundamental security analysis is the primary driver in our stock selection process but we also pay close attention to trading trends. CP has been one of the strongest performing Canadian name over the past 10 years and after a significant decline in 2015, it has broken through and retested its 200 DMA (Daily Moving Average) and therefore looks poised to regain its upward trend. On the fundamental side, the stock price has declined 10.3% while earnings have grown by 18.87% and are projected to grow by 60.16% through 2018. This should support a growing share price moving forward.

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For the US allocation, we sold Church & Dwight and Cerner as they both dropped below their respective 200 day moving averages. We picked up Micron Technology at the beginning of the month at an average cost of $18.358. It closed yesterday at $20.66 for a 12.54% gain. We also picked up Seagate Technology, a data storage company which is also off to a good start. Both companies are above their 200 DMA and on an upward trend, have low forward price to earning’s ratios at 13.77 and 10.45 respectively, and have had very strong upward earnings estimate revisions recently. Cliffs Natural Resources has doubled since our purchase in June. Instead of taking profits and realizing a taxable gain, we have stopped adding new money to the stock in an effort to reduce it’s weighting in the portfolio. We have taken the same approach with our September purchase of Teck Resources and continue to monitor both names very closely.

We also sold the BMO Low Volatility Canadian Equity ETF as it had traded sideways for a while, and added a small cap equity position through the folks at Brandes Investment Partners who are leading the space right now. At the beginning of the month, the US Small Cap Sector had moved into the 3rd position in our ranking program behind Energy and Natural Resources which we already have exposure to. Since then the small cap sector has moved into the #1 position and we believe we will see more upside here especially if Mr. Trump’s plans play out.”

Enjoy the snow!!

Danny

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Daniel Popescu CFP, CIM, FMA, FCSI
President & CEO

MNP Tower, 3100-1021 West Hastings St.
Vancouver, BC V6E 0C3
T: 604-558-6830/1(877) 588-6822
F: 604-558-6823
harbourfrontwealth.com

 

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“I have prepared this commentary to give you my thoughts on various investment alternatives and considerations which may be relevant to your portfolio. This commentary reflects my opinions alone, and may not reflect the views of Harbourfront Wealth Management. In expressing these opinions, I bring my best judgment and professional experience from the perspective of someone who surveys a broad range of investments. Therefore, this report should be viewed as a reflection of my informed opinions rather than analyses produced by Harbourfront Wealth Management Inc.”
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