Protectionist rhetoric has emanated from both sides of U.S. presidential election, with Democratic nominee Hillary Clinton staking a wary stance on new free-trade agreements and Republican nominee Donald Trump vowing he’ll rip NAFTA to shreds. Economists have warned a protectionist bent from the Oval Office could stifle growth on not only a national level, but on a continental and even global scale.
Below, BNN has compiled a list of the TSX 60 stocks most exposed to the U.S. economy ahead of the hotly-contested presidential election.
Gildan Activewear: 87.4 per cent
No stock on the TSX 60 boasts a larger exposure to the world’s largest economy than Montreal-based Gildan Activewear. The t-shirt and underwear firm manufactures both its own branded lines, including Anvil Knitwear, and licensed products for New Balance and Under Armour. Gildan cuts its full-year profit forecast on Nov. 3 as a result of lower net selling prices and slower inventory replenishment among its distributors.
Cameco: 77.5 per cent
U.S. demand accounted for more than three quarters of Saskatoon-base Cameco’s revenue line in fiscal 2015, as the uranium operator continues to struggle with the depressed price of the underlying commodity. Cameco operates a pair of uranium mines in the U.S., Crow Butte in Nebraska and Smith Ranch-Highland in Wyoming.
Alimentation Couche-Tard: 68.1 per cent
Laval-based Alimentation Couche-Tard is now the largest convenience store operator in the U.S. with more than 10,000 locations, trumping Japan-based 7-Eleven’s 8,900 stores. Couche-Tard has been aggressively bolstering its footprint south of the border in recent years, most recently buying Texas-based CST Brands for US$4.4 billion earlier this year.
Valeant Pharmaceuticals: 67.9 per cent
Embattled Valeant Pharmaceuticals’ aggressive roll-up strategy of U.S. drug companies in recent years has boosted its reliance on revenue from south of the border. Valeant acquired Bausch + Lomb, Salix and a slate of other drug companies under the tenure of former Chief Executive Michael Pearson, who left the company amid controversy over its relationship with specialty pharmacy Philidor. Valeant is now in talks with potential bidders for the Salix unit.
Enbridge: 67.2 per cent
Pipeline giant Enbridge rounds out the top five, with the company generating slightly more than two-thirds of its revenue from the U.S. The midstreamer operates a web of more than 27,000 km of crude oil pipelines across North America, and is the largest single conduit of oil into the U.S.
FULL LIST OF TSX 60 STOCKS
|COMPANY||PERCENTAGE OF REVENUE GENERATED IN THE U.S.|
|Potash Corporation of Saskatchewan||59.2|
|Brookfield Asset Management||33.2|
|Crescent Point Energy||9.5|
|Canadian Natural Resources||0|
|Thomson Reuters (63% Americas)||N/A (does not break out US)|
|Pembina Pipeline||N/A (Reports segments, not geography)|