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.
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!!
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
For additional comments and info go to: www.harbourfrontwealth.com
“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.”
Disclaimer – This information transmitted is intended to provide general guidance on matters of interest for the personal use of the reader who accepts full responsibility for its use, and is not to be considered a definitive analysis of the law and factual situation of any particular individual or entity. As such, it should not be used as a substitute for consultation with a professional accounting, tax, legal or other professional advisor. Laws and regulations are continually changing and their application and impact can vary widely based on the specific facts involved and will vary based on the particular situation of an individual or entity. Prior to making any decision or taking any action, you should consult with a professional advisor. The information is provided with the understanding that Harbourfront Wealth Management is not herein engaged in rendering legal, accounting, tax or other professional advice. While we have made every attempt to ensure the information contained in this document is reliable, Harbourfront Wealth Management is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information is provided “as is,” with no guarantee of completeness, accuracy, timeliness or as to the outcome to be obtained from the use of this information, and is without warranty of any kind, express or implied. The opinions expressed herein do not necessarily reflect those of Harbourfront Wealth Management Inc. The particulars contained herein were obtained from sources we believe to be reliable, but are not guaranteed by us and may be incomplete. The opinions expressed are not to be construed as a solicitation or offer to buy or sell any securities mentioned herein. Harbourfront or any of its connected or related parties may act as financial advisor or fiscal agent for certain companies mentioned herein and may receive remuneration for its services. The comments and information pertaining to the Hudson Total Mandate Portfolio and/or the Willoughby Investment Pool (“The Portfolios”) are not to be construed as a public offering of securities in any jurisdiction of Canada. The offering of units of The Portfolios is made pursuant to the Offering Memorandum and Simplified Prospectus and only to investors in Canadian jurisdictions. Important information about The Portfolios is contained in the Offering Memorandum and Simplified Prospectus available through Willoughby Asset Management. Commissions, trailing commissions, management fees, performance fees and expenses all may be associated with investments in The Portfolios. Investments in The Portfolios are not guaranteed, their values change frequently and past performance may not be repeated. Historical annual compounded total returns including changes in unit value and reinvestment of all distributions do not take into account sales, distribution or optional charges or income taxes payable by any security holder that would have reduced returns. Unit values and investment returns will fluctuate and there is no assurance that The Portfolios can maintain a specific net asset value. Harbourfront Wealth Management Inc. (“Harbourfront”) has relationships with related and /or connected issuers, which may include the securities or funds discussed in this commentary and are disclosed in our Statement of Policies Regarding Related and Connected Issuers. This policy is included in your new client package, on our website, or can be obtained from your investment advisor on request.