OPTIMISM #24 - February 11, 2021

Dear clients and friends,

There is much to be optimistic about these days.

Cardinal Capital’s CIO Evan Mancer expects value-oriented portfolios to go 15% higher this year. (that’s us)

Guardian Capital’s analysts cite d that “…82% of companies have topped analyst expectations to date, far more than usual, according to FactSet data”.

Today’s Globe and Mail has an article by Scott Barlow saying that Metro, TC Energy and Fortis are on the Bank of America’s Global list of buying opportunities.  Its rare for Canadian companies to be mentioned.

Brookfield offered to buy Inter Pipeline, a smaller Canadian company yesterday for 30% more than its currently trading value.

I was surprised as they have Mark Carney, our former Bank of Canada head, as a board member. He is on a big push for greener everything.

My guess is they see opportunity.

Companies are increasing dividends, which will drive share prices up.  Already this year:

Alimentation Couche Tard  +25%

Canadian Tire  +3.3%

Enbridge  +3.1%

Granite REIT  +3.3%

Telus  +6.8%

Metro   +11%

Atco   +3%

BCE  +5.1%

Cdn Utilities  +1.01%

More notable insider trading is occurring:

Bill Holland bought $4 million in shares of CI Mutual Funds.

Bill Butt, another insider bought 60,000 shares as well, for a cost of $987,000.

Insiders are buying REITs.  These are companies that own all kids of real estate from shopping malls to apartments etc and manage the tenants, collect rent.

Samir Janji,  invested over $5.7 million in shares of Artis REIT.

Sime Armoyan, invested over $1.3 million in shares of Cominar REIT.

We work for a nice couple who hired one of the Portfolio Managers we recommended.

The fees are 1.25% - pretty standard.

They invested $1,255,577 in 2010.  They have withdrawn $1,247,165 in a regular fashion over the years.

Their account as of yesterday was $1,223,011.

Remarkable.  I know the process works but it still amazes me. 

From a favourite dividend website … I love this.  According to James Montier’s book Behavioural Finance, The Dow Jones Industrial average was 40.94 in 1896.  Today its 31430.  If dividends were included it would be 652,231.

Enjoy the rest of the week. Spring is on its way.