Market Call for Wednesday, September 6, 2017
Stephen Groff, principal and portfolio manager at Cambridge Global Asset Management
Focus: North American dividend stocks
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.
- 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 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
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%
TOTAL RETURN AVERAGE: 13.30%
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.
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%