samedi 30 janvier 2016

The great challenge: Donville VS Penetrator

Have you read the last ROE reporter? It's been released on thursday and it's excellent, once again.

The january edition is the most interesting of the year because Jason Donville presents his approach: High ROE/low PE ratio stocks, like he does every year. Also, Jason states that even if the TSX is mainly based on natural resources and, to a lesser extent, financials (for a lot of people, investing in Canada means investing in one of the big banks or in Suncor), there's some great stocks out there in the knowledge sector (healthcare and technology) which deserve attention.

As always, at the end of the ROE reporter, there's a list of stocks and Donville presents his 5 top picks for the year ahead.

For 2016, his faith goes to his usual picks:

CGI Group
Home Capital Group
Concordia Healthcare
Constellation Software
CRH Medical

The first four names represent more than 30% of my portfolio. So, I believe in them too, obviously.

This year, I'll try to prove myself by playing the game against Donville (and against all the others analysts I'm talking about from time to time). So, I'm gonna chose 7 stocks that I believe will get good results for the year ahead (5 serious picks and 2 long shots). A substantial part of my portfolio is made of US equities. Would it be fair to chose some US equities against a 100% canadian equities portfolio? I don't know. The canadian dollar is so low that it may not be such an unfair approach. In fact, the canadian dollar should rise sooner or later, which would reduce the performance of all US equities. So, I've decided to chose one US listed company.

I think that Donville chosed pretty good stocks and I'd chose most of them too. But I'll try to be original and chose something else.

Here's my choices for 2016.

1- Canadian Pacific
2- Valeant
3- Knight Therapeutics
4- Couche-Tard
5- Allergan (US listed)

Long shots:

6- Ten Peaks Cofee (TPK.TO)
7- Rifco  (RFC.V)

I'm betting on cash full companies such as Knight Therapeutics and CGI Group (even if I didn't chose that last one because Donville chose it first). The market is low and there's plenty of occasions out there, so companies with lots of cash may jump on the occasion to buy something cheap. Cheap companies might as well be bought (Concordia Healthcare, Callidus Capital, Home Capital Group, Nobilis Health, etc).

I'll surely write a review at the end of 2016 or the beginning of 2017.

If you're interested to participate, please use the comment section to write your 5 picks for 2016.

14 commentaires:

  1. Sounds like fun...Here are 5 stocks I already own and think will out perform in 2016

    1 - BPY.UN
    2 - TOT
    3 - GUD
    4 - ATA
    5 - TNC

  2. Oh I forgot...Please allow me one longshot

    6 - PIF (a recap turnaround play)

  3. Here are my top canadian picks :

    I own all 5.

  4. AGN - Allergan
    CLR - Clearwater Seafoods
    ESL - Enghouse
    ATD.B - Couche Tard
    KXS - Kinaxis

    1. I'd never heard of Kinaxis - thanks for the exposure. Do you own it currently and do you have concerns for the company moving forward? I like the ROE and I like the industry...chewing on the idea of picking up a position.

    2. I've owned it since the mid 30's. RBC keeps increasing it's target price so I don't have a problem holding it. I am terrible at market timing so I tend to just find "compounders" and stick with them averaging in at lower prices when the opportunity arises.

  5. All are US Positions:

  6. My PICKS are:

    I know the last 3 i'm buying cause theres blood in the streets. Buy low and
    sell high!

  7. My picks are:


    Long shots
    RFC & CRH (2 past picks of Jason)

    BTW Jason should be on BNN soon, because he was there on February 5th last year. Stay tuned and Watch to send your questions before the show! You gonna heard the answers from the horse's mouth if they are picked...

    Value Man

    1. What did Jason say today? I hope nothing bad about tech, everything tech is pulling back today! Oh well, I'll take short term pain for long term gain. I still have no interest in oil or material stocks.

  8. On BNN today, Jason talked about the 5 picks that are in his newsletter. He also said he expects Canada to do well once oil recovers.

    I'm really going to have to think about the 5 stocks I'm gonna pick as tech was hit hard today. Kinaxis fell 13%, wish I hadn't bought as high as I did and CSU which I always consider a safety play has really fallen over the last two weeks. SIGH.