Sep 6, 2017
Stephen Groff's Top Picks: September 6, 2017
BNN Bloomberg
Stephen Groff, principal and portfolio manager at Cambridge Global Asset Management
Focus: North American dividend stocks
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MARKET OUTLOOK
Valuations and risk levels remain elevated. We are holding higher levels of cash across the Cambridge Dividend Suite of funds. We remain disciplined in following our bottoms-up process for evaluating businesses and are finding attractive investment opportunities globally despite a less attractive market environment.
TOP PICKS
PRAXAIR (PX.N)
- High-quality global industrial business with a business model capable of generating attractive and consistent returns on invested capital.
- Linde merger enables them to drive material incremental value for shareholders.
- Management are solid executors and very good stewards of shareholder capital.
- Most recent trade: Buy on August 30 at $130.64
VIPER ENERGY PARTNERS (VNOM.O)
- The capital light business model is attractive as it leverages the capital of producers on their land.
- Cash flow is returned to shareholders through an attractive & growing dividend.
- Viper has a beneficial relationship with Diamondback Energy, which helps to accelerate development and drive incremental investment opportunities.
- Most recent trade: Buy on August 30 at $16.60
FLUOR (FLR.N)
- Fluor is a high-quality global engineering and construction firm.
- Their scale, vertical integration, and historical execution has enabled them to earn attractive returns over time.
- Recent end market weakness and uncharacteristic operational issues have created an opportunity for longer term-oriented shareholders.
- Most recent trade: Most recent trade on August 30 at $38.63
DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
---|---|---|---|
PX | N | N | Y |
VNOM | N | N | Y |
FLR | N | N | Y |
PAST PICKS: SEPTEMBER 7, 2016
WALGREENS BOOTS ALLIANCE (WBA.O)
Some position resizing but no major changes.
- Then: $82.88
- Now: $81.76
- Return: -1.35%
- Total return: 0.47%
EXTENDED STAY AMERICA (STAY.N)
The position size was reduced into the high teens on less attractive risk/reward.
- Then: $14.41
- Now: $19.16
- Return: 32.96%
- Total return: 39.45%
CASH
TOTAL RETURN AVERAGE: 13.30%
DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
---|---|---|---|
WBA | N | N | Y |
STAY | N | N | Y |
PAST PICK UPDATES
STORE CAPITAL CORP. - The position was added to as the shares pulled back from the mid $20’s down to $20. The position was resized lower as the shares have rebounded.
METRO - The position was trimmed when the shares rebounded into the mid $40’s on less attractive risk / reward.
FUND PROFILE
Cambridge Canadian Dividend Fund Class F
** Part of the Cambridge Dividend Suite of funds **
Performance as of: July 31, 2017
1 Month: -1% fund, 0.1% index
1 Year: 8.7% fund, 6.8% index
3 Year: 10% fund, 2.6% index
*Index: S&P / TSX Index
TOP HOLDINGS AND WEIGHTINGS
- Store Capital Corp. - 4.37%
- Fairfax Financial Holdings - 4.20%
- TFI International - 4.07%
- Canadian Natural Resources - 3.86%
- Walgreens Boots Alliance - 3.77%
WEBSITE: www.ci.com