Canadian index investors got some vindication in the second quarter.

The TSX Composite index went into rally mode in the latest three-month period, rising six per cent in the quarter on its way to a new all-time high. It also marked the index's best quarterly performance since 2013. The benchmark composite capped off the quarter as the 13th-best performer among its 93 global peers, sandwiched between New Zealand and Ireland – and outperforming the S&P 500 and Dow Industrials for the first time since the third quarter of 2016.

Top Performers:

MEG Energy (MEG.TO): +140.88 per cent

Canada Goose (GOOS.TO): +79.36 per cent

Valeant Pharmaceuticals (VRX.TO): +49.20 per cent

Element Fleet Management (EFN.TO): +48.92 per cent

Nevsun Resources (NSU.TO): +48.86 per cent

MEG Energy:

After three years of being a market punching bag, MEG Energy is finally having its moment in the sun. The heavy-oil producer was far and away the top performer on the TSX Composite in the second quarter, the only stock to more than double in that time. MEG, which is typically highly-sensitive to fluctuations in underlying oil prices, rode record first-quarter production volumes to a smaller-than-expected quarterly loss. MEG is also ramping up its spending plans in the wake of oil’s recovery, earmarking $700 million for capital spending this fiscal year.

Canada Goose:

Go figure: the second-best performing stock through the spring quarter was a high-end parka-maker. The company posted an unexpected profit in the fourth quarter, which sent shares 30 per cent higher over the course of a single trading session. In its first fiscal year as a public company, profit surged more than 95 per cent – blowing its 35 per cent growth target out of the water. Investors who got in on the ground floor of its March 2017 initial public offering have been richly rewarded, with shares more than quadrupling from the $17 offer price.

Valeant Pharmaceuticals:

Valeant – briefly the largest company in Canada by market cap – got back to business in the second quarter. Shares hit their highest level since 2016 after the company’s turnaround plan gained traction with the analyst community. In a June 6 research note to clients, Barclays analyst Douglas Tsao wrote that the company’s existing slate of drugs offered a “foundation” for the company’s growth. Valeant is also looking to put past controversies behind it, with plans to rebrand itself as Bausch Health in July.

Nevsun Resources:

Nevsun Resources makes the top five after an unsolicited takeover offer for the miner put the company in play. The company rejected the $1.5-billion takeover approach by Lundin Mining and Euro Sun Mining out of hand, arguing it inadequately values its asset base, notably the exploration-stage Timok project in Serbia. Euro Sun and Lundin have since raised the cash component of their offer.

Honourable Mention - Torex Gold:

Two trading days made the quarter for Torex Gold. Shares spiked 51 per cent on April 6 and another 20 per cent less than a week later after the company trumpeted “The Blockades Have Ended” at its ELD mine complex in Southwest Mexico. The company forecasts the ELG complex will eventually boast annual production of about 370,000 ounces of gold, at an all-in-sustaining cost per ounce of US$616.

Top Performing sectors:

Energy: +14.69 per cent

Health Care: +14.07 per cent

Info Tech +10.85 per cent

Firming crude oil prices helped drive the energy group to its best quarter since 2009's Q2 after a rough start to 2018. The aforementioned MEG Energy was the top performer for the subgroup in the quarter. Colombia-focused producer Parex Resources and Montney-focused Nuvista Energy rounded out the top three.

The health care sector returned to fine form in the second quarter, after starting the year as the worst-performing TSX subgroup through the first quarter. Four of the eight members of the group closed out the quarter in positive territory, led by Valeant and cannabis producers Canopy Growth and Aphria.

Info tech stocks extended their strong start to the year, adding to the first quarter’s gains and finishing in third spot for Q2. Canada’s latest tech darling, Shopify, led the way, followed by soon-to-be taken over Mitel Networks and Celestica. Only two of the 11 members of the group finished the quarter in negative territory, with BlackBerry posting the largest declines.

Worst Performers:

Utilities: -1.62 per cent

Telecoms: +0.66 per cent

Financials:  +1.00 per cent

Every TSX subgroup finished the second quarter in the green, save one: utilities. Rising interest rates have hampered the group, which typically performs better when the cost of borrowing is low and investors are forced into a hunt for yield. TransAlta, Boralex and Brookfield Infrastructure were the lead laggards in Q2.

In spite of sharing a similar sensitivity to rising rates, the telecom group eked out modest gains in the quarter. The group, which counts only three members, was dragged down by BCE’s decline, with Rogers and Telus both turning in gains.

15 of the 27 members of the financials group finished the quarter in the green. Index heavyweights like TD Bank, BMO and Fairfax were enough to offset weakness from the likes of Scotiabank and CI Financial.

Worst Performers:

CES Energy Solutions (CEU.TO): -23.64 per cent

Westjet (WJA.TO): -23.50 per cent

Dorel Industries (DIIb.TO): -23.50 per cent

Air Canada (AC.TO): -20.62 per cent

Hudbay Minerals (HBM.TO): -19.63 per cent

CES Energy Solutions:

The recovery in oil prices hasn’t fully reverberated through the oilfield services companies. CES Energy Services suffered through another tough quarter, after admitting pricing power for the services company hasn’t fully recovered.

WestJet:

Canada’s second-largest air carrier also posted the second-largest drop on the TSX in the quarter amid a pair of headwinds. The company averted a pilots strike in May, but admitted the threat of a walk-out weighed on overall bookings this spring. Cost control problems have also reared their ugly head, with WestJet forecasting costs per available seat mile – a key metric for airlines – will rise as much as 8.5 per cent this quarter while a similar revenue metric falls as much as two per cent.

Dorel Industries:

The carnage cause by the bankruptcy of Toys “R” Us wasn’t restricted to the toy industry. Bike-maker Dorel took it on the chin in Q2, after badly missing first-quarter profit estimates amid a charge taken due to the liquidation of Toys “R” Us American operations. Though investors have been feeling the pain, Dorel Chief Executive Officer Martin Schwartz said he expects the sales situation will stabilize through the back half of the year as the company shifts to other retailers.

Air Canada:

Though Air Canada joins WestJet among the bottom five, it’s more about the macro environment than any missteps made by Canada’s flagship air carrier. Airline stocks around the world have been under pressure as we enter the summer due to the rise in crude oil prices, with fuel being the largest input cost for day-to-day operations.

Dishonourable Mention - Corus Entertainment:

It’s gone from bad to worse for Corus Entertainment. Shares of the media company hit a new all-time low in the wake of its third-quarter report, when it slashed its dividend 79 per cent and booked a $1-billion impairment charge on the value of its television operations. Corus has been struggling with the decline in television advertising revenue after doubling down on TV with its $2.65-billion purchase of Shaw’s media assets in 2016.