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Globe Investor Dividend all-stars, bearish on banks and Tesla: What you need to know in investing this week

Looking for investing ideas? Here’s your weekly digest of the Globe’s latest insights and analysis from the pros, stock tips, portfolio strategies plus what investors need to know for the week ahead.



National Bank updates its ‘Dividend All-Stars’ portfolio

This past week, National Bank Financial updated its “Dividend All-Stars” portfolio for the second half of 2018, replacing three securities in its holdings of 25 stocks, Jennifer Dowty writes. During this rebalancing, three securities were replaced in the portfolio: Canadian Imperial Bank of Commerce, Horizon North Logistics and the recently acquired company Student Transportation. The three additions were Chemtrade Logistics Income Fund, Great-West Lifeco and Innergex Renewable Energy. Read more about them and get the full All-Stars list here.

Read more: For investors, it’s looking like 1998 all over again

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Why 2017′s top TSX stock picker says it’s time to avoid the bank sector

There are times when Canadian bank stocks trade more or less in unison, making it difficult to pick the winners from among the group. Last year was not one of those times, Tim Shufelt writes. “Those twin catalysts ended up creating an opportunity that frankly doesn’t always present itself in the banks,” said Robert Sedran, a bank analyst at CIBC World Markets. Fast forward to now, and the analyst is waiting for the next jolt to the market to create some separation in the pack. Mr. Sedran’s keen timing earned him the distinction of being last year’s top Canadian stock picker, as conferred by the Thomson Reuters StarMine Analyst Awards.

Keep your wallet – and your sanity – intact and avoid Tesla stock

I haven’t written a piece about Tesla for nearly five years, David Milstead writes. So why open my mouth now? It’s because there are too many voices taking all of this seriously, earnestly explaining what a leveraged buyout of this size would mean, whether the shares are truly undervalued by chief executive Elon Musk’s purported offer, etc. I beg of any investor who might actually read all this and consider buying Tesla stock for the first time: Please run away with your wallet and sanity intact. The company has transcended “battleground stock” and become a parody of a public company, unsuitable for anyone except those willing to risk setting their dollars aflame.

Related: SEC deepens Tesla probe in wake of Elon Musk’s tweet about taking company private

Read more: Tesla short-sellers back in force as shares remain shaky

Seven simple value strategies that walloped the market over the past 15 years

Seven simple investment strategies walloped the market over the past 15 years. They each look for bargains in different ways, but they all generated serious returns, Norman Rothery writes. Each strategy sticks with a single value ratio, sorts the market’s stocks by that ratio each year and then invests an equal amount of money in the 20 stocks with the lowest ratios. The positions are held for a year, and then the process is repeated to build up a long-term performance record. In each case, the strategies pick stocks from those within the S&P/TSX Composite Index.

15 years of Canadian value

15 years to the end of 2017,

poor relative results highlighted

 

 

PORTFOLIO

FIRST

FIVE YEARS

MIDDLE FIVE YEARS

LAST

FIVE YEARS

 

15

YEARS

S&P/TSX Composite

Low P/E

Low P/B

Low P/TB

Low P/S

Low P/CF

Low P/FCF

Low EV/EBIT

Low EV/EBITDA

18.30%

23.6

12.5

17.5

14.6

27

20.3

24.7

31.6

0.80%

9.1

15.8

17.8

8.6

18.4

15.6

5.9

3.4

8.60%

9.9

-0.6

-1.1

19.7

8.5

14.6

5.5

4.7

9.00%

14

9

11.1

14.2

17.7

16.8

11.7

12.5

THE GLOBE AND MAIL, SOURCE: NORMAN ROTHERY,

BLOOMBERG

15 years of Canadian value

15 years to the end of 2017,

poor relative results highlighted

 

 

PORTFOLIO

FIRST

FIVE YEARS

MIDDLE FIVE YEARS

LAST

FIVE YEARS

 

15

YEARS

S&P/TSX Composite

Low P/E

Low P/B

Low P/TB

Low P/S

Low P/CF

Low P/FCF

Low EV/EBIT

Low EV/EBITDA

18.30%

23.6

12.5

17.5

14.6

27

20.3

24.7

31.6

0.80%

9.1

15.8

17.8

8.6

18.4

15.6

5.9

3.4

8.60%

9.9

-0.6

-1.1

19.7

8.5

14.6

5.5

4.7

9.00%

14

9

11.1

14.2

17.7

16.8

11.7

12.5

THE GLOBE AND MAIL, SOURCE: NORMAN ROTHERY,

BLOOMBERG

15 years of Canadian value

15 years to the end of 2017, poor relative results highlighted

 

 

PORTFOLIO

FIRST

FIVE YEARS

MIDDLE FIVE YEARS

LAST

FIVE YEARS

 

15

YEARS

S&P/TSX Composite

Low P/E

Low P/B

Low P/TB

Low P/S

Low P/CF

Low P/FCF

Low EV/EBIT

Low EV/EBITDA

18.30%

23.6

12.5

17.5

14.6

27

20.3

24.7

31.6

0.80%

9.1

15.8

17.8

8.6

18.4

15.6

5.9

3.4

8.60%

9.9

-0.6

-1.1

19.7

8.5

14.6

5.5

4.7

9.00%

14

9

11.1

14.2

17.7

16.8

11.7

12.5

THE GLOBE AND MAIL, SOURCE: NORMAN ROTHERY, BLOOMBERG

Read more: Twenty-three large-cap U.S. tech stocks that offer safety and value

CI Financial slashes dividend, unveils $1-billion share buyback

CI Financial Corp., one of the country’s largest investment managers, is slashing its dividend nearly in half in a move it said will improve flexibility amid intense competition, Tim Shufelt writes. The company announced the surprise cut on Thursday morning, saying it plans to use the money saved on dividends to help buy back up to $1-billion of its own stock. Though CI is struggling to reverse a growing net outflow of money from its funds, many of which continue to underperform the market, the shift from dividends to share repurchases is a primarily a strategic move based on a depressed share price, CI’s chairman Bill Holland said in an interview. Investors drove CI’s stock down by 4.2 per cent on the day, in keeping with a market that does not tend to look kindly on dividend cuts.

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Related: The Globe’s investing stars and dogs of the week

What investors need to know for the week ahead

Companies set to release their earnings this week include: Canopy Growth, CAE, Enercare, Great Canadian Gaming, Premium Brands, Sprott, Home Capital, Home Depot, Walmart, Hydro One, Park Lawn, Cisco Systems and Metro. Economic data coming this week include: Canadian existing home sales for July and U.S. retail sales for July on Wednesday; Canadian manufacturing shipments for June and U.S. housing starts and building permits for July on Thursday; and Canadian inflation figures on Friday.

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