22 Dec The Lato Letter: Volume 5, Issue 7
For investors, 2016 is a year that can certainly be described as “unprecedented” (apologies to the other Donald for using one of his favourite words), “surprising” and “rewarding”. Strong moves in stocks came from unusual places and at unusual times. Investors have been rewarded with year to date (Dec. 20th) total returns of 20.9% for the S&P/TSX and 13.5% for the S&P 500.
As with all years, some stocks rise more than the index and other rise less or even fall during a strong year. The trick is always to have more of the former and less of the later. The Padlock Scorecard for the stocks making up Padlock’s Model Portfolio is shown below. The returns are year to date total returns for stocks held at the end of 2015 and the year to date total returns from the time of purchase for stocks added during 2016:
Padlock 2016 Scorecard
Canadian Stocks US Stocks
Name Symbol Return Name Symbol Return
AGT Food and Ingredients* AGT -0.2% Alphabet GOOGL 4.9%
Aecon** ARE 4.3% Apple AAPL 13.2%
Canyon Services Group FRC 69.8% Borg Warner* BWA 14.5%
CCL Industries CCL.B 21.8% Corning GLW 37.5%
Dollarama DOL 22.4% Gilead Sciences GILD -25.0%
Equitable Group EQB 17.9% Goldman Sachs Group GS 36.3%
Metro*** MRU -11.5% Hi-Crush Partners HCLP 216.7%
New Flyer Industries NFI 42.8% KKR KKR 12.1%
Parex Resources PXT 69.3% Leucadia National** LUK 53.8%
Peyto Exploration PEY 39.3% NCR NCR 70.2%
Sleep Country Canada ZZZ 68.6% Visa V 1.8%
Sun Life Financial SLF 25.4% Walgreens Boots Alliance WBA 3.0%
Toronto Dominion Bank TD 27.5%
Tourmaline Oil TOU 58.9%
Tricon Capital Group TCN 8.9%
* Added to portfolios on July 5, 2016 * Added to portfolios on October 28,2016
** Added to portfolios on January 12,2016 ** Added to portfolios on March 7,2016
*** Added to portfolios on August 23,2016
Many of the stocks that showed the largest returns were stocks that disappointed in 2015. Similarly, the stocks that have lagged in 2016 are all well-positioned, well-managed companies with reasonable valuations that are poised to be possible outperformers in 2017.
All in all it has been a great year to be an investor and a sports fan in Toronto. Markets certainly exceeded most investors’ expectations at the beginning of the year. The Toronto FC made it to championship game, the Jays and Raptors made it to the Final Four and well for the Leafs, that proverbial next year appears to be getting closer.
Padlock remains constructive on equity markets in spite of the recent post-election advance and concerns over the U.S political situation but will be reassessing and rebalancing the portfolios as we head into the New Year.
I would like to thank all of you (particularly the Padlock clients, the best clients one can have) for your encouragement and support during the year and I would like to wish you and your family a joyful holiday season along with my best wishes for a happy, healthy and prosperous 2017.
This information, including any opinion, is based on various sources believed to be reliable, but its accuracy cannot be guaranteed and is subject to change without notice
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