Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
RBC Capital Markets analyst Bish Koziol made four changes to his Top 40 list of Canadian stocks. The selection method combines value, growth, momentum and predictability scores,
“Our Canada Overall Top 40 Portfolio gained 3.3% last month, while the S&P/TSX Composite advanced 0.9 %. Year -to -date the Portfolio has risen 22.6% versus the 1 8.2 % advance of the benchmark. Gains in Materials and Financials were the main tailwinds to the advance. We continue to increase exposure in Materials as the group accounted for both additions this month. As a result, the weighting of the group in the Portfolio increased to 2 7.5%. Both additions realized improving Growth scores”
Mr. Koziol added Fortuna Silver Mines Inc. (FVI-T) and Hudbay Minerals Inc. (HBM-T), while removing TFI International Inc. (TFII-T) and Open Text Corp. (OTEX-T).
The top 40 are now Canadian Natural Resources Ltd, Keyera Corp, Trican Well Service Ltd, Pason Systems Inc., Cenovus Energy Inc, Suncor Energy, Imperial Oil Ltd., Stella-Jones Inc, Silvercorp Metals Inc, Dundee Precious Metals Inc, Eldorado Gold, Kinross Gold Corporation, Alamos Gold Inc, CCL Industries Inc., Fortuna Silver Mines Inc, Hudbay Minerals Inc, Torex Gold Resources Inc, Agnico Eagle Mines Ltd, Finning International Inc., Toromont Industries Ltd, Linamar Corp, Metro Inc., Loblaw Co.s Ltd, Fairfax Financial Holdings Ltd, AGF Management Ltd, CIBC, Great-West Lifeco Inc, iA Financial Corporation Inc, Intact Financial Corporation, Canaccord Genuity Group Inc, CI Financial Corp, National Bank of Canada, TMX Group Ltd, Bank of Nova Scotia, Celestica Inc, Cogeco Communications Inc, Quebecor, Inc, Northland Power Inc., and Transalta Corp.
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Jefferies’ Christopher Wood outlined potential U.S. plans for government cuts that include renewable power incentives,
“Elon Musk … stated on 27 October that he could cut US$2tn of federal government spending in a Trump administration … For the record, Trump said prior to the poll that he will ask Musk to head a new “government efficiency commission” if he wins … hedge fund investor John Paulson, who is a candidate to become Treasury secretary in a Trump administration, stated in an interview in late October that if he got the job he would work with Musk on such a cost-cutting goal, in part by getting rid of the subsidies for green energy in the Inflation Reduction Act. This is certainly an area worth watching, most particularly if Trump really champions such a policy, since it would mean cutting entitlements which, according to Washington conventional wisdom, cannot be touched”
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CIBC analyst Ian de Verteuil offered some predictions about Canada as a U.S. tariff target in 2025,
“On trade, investors should be aware the U.S. trade deficit with Canada and Mexico has widened almost US$100 billion since Trump left office. Trade irritants on dairy (supply management), softwood lumber and auto rules of origin remain. Trump has promised a universal 10% blanket tariff on all imports, and even with USMCA on our side there is always the possibility of future tariffs on Canadian goods under a Trump presidency. To be clear, an America First policy is meant to increase economic activity in the U.S., and this typically has positive readthroughs for the Canadian economy. This will be mitigated by some of the trade issues and Canada’s disappointing commitment to defense spending – a major irritant to Hawks in Washington. Nevertheless, a host of Canadian companies have large U.S. operations and could benefit if some of the more aggressive spending (and corporate tax cuts) are implemented. On the losing side, we do believe renewables will face some headwinds as the support for the IRA drops”
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Diversion: “RFK Jr. wants to stop putting fluoride in drinking water. Here’s what scientists say” – CBC