The case for a much lower CIT rate was that higher after-tax profits would boost business investment. But that has turned out to be a mirage.
Globe editors have posted this research report with permission of Mackie Research Capital Corp. This should not be construed as an endorsement of the report's recommendations. For more on The Globe's disclaimers please read here. The following is excerpted from the report:
While this has been a challenging year for investors, tax-loss selling has created some compelling buying opportunities. On a YTD basis, the S&P/TSX is down 7.9 per cent, including a 2.6-per-cent decline from October 15 levels, which we view as the beginning of this year's tax-loss selling.
The small cap market has been hit harder, with our coverage universe down 12 per cent (on average) YTD, including a 3-per-cent drop since October 15. We have examined our coverage universe, and identified our most attractive investment ideas, focusing on those with quality management teams, strong balance sheets and robust earnings/cash flow growth potential. We further refined our list by pinpointing those stocks with multiple, potential catalysts that can drive near-term share price improvement. While these stocks have struggled of late, we believe they offer investors significant upside.
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