Performance Review
On February 18, 2015, we generated the following list of stocks for consideration with their respective performance one year later:
| Symbol | Name | 2015 | 2016 | % chg |
| BEI-UN.TO | Boardwalk REIT | 60.69 | 42.00 | -30.80% |
| IGM.TO | IGM Financial Inc. | 44.68 | 33.61 | -24.78% |
| ACO-X.TO | ATCO LTD., CL.I, NV | 46.76 | 37.90 | -18.95% |
| CJR-B.TO | Corus Entertainment Inc. | 21.73 | 9.32 | -57.11% |
| CM.TO | CIBC | 95.39 | 89.01 | -6.69% |
| REF-UN.TO | Canadian REIT | 47.05 | 39.90 | -15.20% |
| RY.TO | Royal Bank of Canada | 77.70 | 69.41 | -10.67% |
| HCG.TO | Home Capital Group Inc. | 43.30 | 29.86 | -31.04% |
There was little surprise in the performance of the stocks on the watch list. As a group (equally weighted) the average change was –24.40% compared to the Toronto Stock Exchange decline of –17.49%.
The analysts were off target for their 1-year projections. Only Canadian REIT (REF-UN.TO) and Boardwalk REIT (BEI-UN.TO) came close (somewhat) to the analyst targets.
A stock of particular interest to us was Home Capital Group (HCG.TO). At the time we said the following of HCG.TO:
“Applying Speed Resistance Lines to HCG.TO, we see that the stock has already declined to the conservative downside target of $37.92. Because it appears that we are in the early stages of the economic decline in Canada, HCG.TO might be worth watching to see if the stock can decline to the $28.21 level. The extreme downside target is $18.51 which confirms the Altimeter low of $20.80. HCG.TO should be considered in three stages starting below the ascending $37.92, $28.21 and $18.51 levels.”
Not surprisingly, HCG.TO declined as low as 23.16 on January 15, 2016. This has set the stage for our latest risk assessment (as noted below).
The latest Speed Resistance Line for HCG.TO shows that the $27.53 level is a new resistance while $18.06 is the new support level.
The new downside accumulation targets are:
-
$20.56
-
$13.59
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$6.62
A deepening of the decline in the commodity sector will dampen earnings and the stock price for Home Capital Group. However, the company is maintaining a strong showing so far.
February 2016 Watch List
| Symbol | Name | Price | P/E | EPS | Yield | P/B | % from low |
| BEI-UN.TO | Boardwalk REIT | 42 | - | -2.6 | 2.04 | 4.84 | 0.69 |
| REF-UN.TO | Canadian REIT | 39.9 | 14.63 | 2.73 | 1.8 | 4.55 | 0.87 |
| CUF-UN.TO | Cominar REIT | 14.63 | 9.16 | 1.6 | 1.47 | 10.13 | 0.67 |
| REI-UN.TO | Riocan REIT | 24.87 | 16.51 | 1.51 | 1.41 | 5.7 | 1.01 |
| ACD.TO | Accord Financial Corp. | 8.9 | 8.87 | 1 | 0.36 | 4.01 | 1.07 |
| AX-UN.TO | Artis REIT | 11.31 | 26.43 | 0.43 | 1.08 | 9.75 | 0.63 |
| D-UN.TO | Dream Office REIT | 15.76 | 276.49 | 0.06 | 2.24 | 14.66 | 0.48 |
| SJR-B.TO | Shaw Communications, Inc. | 23.41 | 13.3 | 1.76 | 1.19 | 5.22 | 2.06 |
| EMP-A.TO | Empire Company Limited | 24.81 | 19.34 | 1.28 | 0.4 | 1.61 | 1.12 |
| AFN.TO | Ag Growth International Inc. | 26.64 | - | -1.71 | 2.4 | 9.1 | 1.47 |
| TRI.TO | Thomson Reuters Corporation | 49.72 | 31.08 | 1.6 | 1.84 | 3.72 | 3.01 |
| CJR-B.TO | Corus Entertainment Inc. | 9.32 | - | -0.41 | 1.14 | 12.32 | 0.66 |
| IAG.TO | Indu'l Alliance Ins. and Fin. Services | 37.33 | 10.46 | 3.57 | 1.2 | 3.29 | 0.98 |
| NA.TO | National Bank of Canada | 37.6 | 8.34 | 4.51 | 2.16 | 5.87 | 1.3 |
| PWF.TO | Power Financial Corporation | 30.8 | 9.58 | 3.22 | 1.49 | 4.97 | 1.31 |
| IGM.TO | IGM Financial Inc. | 33.61 | 10.81 | 3.11 | 2.25 | 6.84 | 1.71 |
| FTS.TO | Fortis Inc. | 36.5 | 14.25 | 2.56 | 1.5 | 4.14 | 1.3 |
| CAE.TO | CAE Inc. | 13.96 | 15.92 | 0.88 | 0.3 | 2.19 | 1.96 |
| CCA.TO | Cogeco Communications Inc. | 62.51 | 11.77 | 5.31 | 1.56 | 2.53 | 1.68 |
| RY.TO | Royal Bank of Canada | 69.41 | 10.32 | 6.73 | 3.16 | 4.65 | 1.72 |
| BNS.TO | The Bank of Nova Scotia | 55.07 | 9.72 | 5.67 | 2.8 | 5.18 | 1.32 |
| ESI.TO | Ensign Energy Services Inc. | 5.4 | - | -0.62 | 0.48 | 8.91 | 0.38 |
| POW.TO | Power Corporation of Canada | 28.31 | 7.12 | 3.97 | 1.25 | 4.51 | 1.02 |
| KEY.TO | Keyera Corp. | 35.56 | 29.93 | 1.19 | 1.5 | 4.35 | 4.23 |
| CM.TO | Canadian Imperial Bank of Commerce | 89.01 | 10.03 | 8.87 | 4.6 | 5.28 | 1.7 |
| TD.TO | The Toronto-Dominion Bank | 51.88 | 12.32 | 4.21 | 2.04 | 4.01 | 1.5 |
| CGO.TO | COGECO Inc. | 52.63 | 10.06 | 5.23 | 1.02 | 1.97 | 1.39 |
| RBA.TO | Ritchie Bros. Auctioneers Incorporated | 32.22 | 29.03 | 1.11 | 0.89 | 2.84 | 4.79 |
| T.TO | TELUS Corporation | 38.8 | 16.94 | 2.29 | 1.76 | 4.46 | 3.06 |
| PLZ-UN.TO | PLAZA RETAIL REIT | 4.48 | - | - | - | - | 8 |
| IFC.TO | Intact Financial Corporation | 85.06 | 16.33 | 5.21 | 2.32 | 2.72 | 2.14 |
| CCO.TO | Cameco Corporation | 15.99 | 99.94 | 0.16 | 0.4 | 2.52 | 1.13 |
Analyst Estimates
Below is a snapshot of the analysts low estimated earnings assuming a price-to-earnings ratio of 15 for the next 12 months and the percentage change in price that is implied based on these low earnings estimates.
