MARKET OUTLOOK:

Decelerating liquidity remains the single most important factor influencing market behaviour. 

Low interest rates amplify the magnitude of the swings in stock prices.

While high multiple growth stocks have declined, stocks with more stable businesses are seeing investor interest.

We are still able to find high-quality businesses trading at reasonable valuations.

TOP PICKS:

Arc Resources (ARX TSX)
Arc Resources still trades at a low valuation based on cash flow and discount to net asset value. The natural gas market looks to be much tighter going forward. The company has a consistent business model and can grow in this current commodity environment.

Superior Plus (SPB TSX)
Superior Plus’ propane distribution business is relatively stable while still being impacted by how cold the winter is in any given year. The company uses its free cash flow to assertively consolidate the North American propane distribution business. The stock currently trades with a 5.6 per cent dividend yield and we expect the business will grow incrementally year in and year out.

Kirkland Lake Gold (KL TSX)
Kirkland Lake Gold is in the process of merging with Agnico Eagle Mines. The transaction will make the company a go-to name in the gold sector because of its size, geographic locations and project growth. We believe the environment is being put in place for gold to go higher after we go though this near term period of rising interest rates.

PAST PICKS: December 15, 2020 

Leon’s Furniture (LNF TSX) 

• Then: $19.80
• Now: $25.00
• Return: 26%
• Total Return: 35%

Cameco (CCO TSX) 

• Then: $17.69
• Now: $28.40
• Return: 60%
• Total Return: 61%

Roxgold (ROXG TSX) – Acquired by Fortuna Silver on July 6, 2021 

• Then: $1.69
• As of July 5, 2021: $1.90
• Return: 12%
• Total Return: 12%

Total Return Average: 36%