Two changes to a RBC quantitative analyst’s Top 40 list of Canadian stocks

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RBC Capital Markets analyst Bish Koziol made two changes to the firm’s Top 40 stock list derived from value, momentum, growth and predictability criteria. National Bank of Canada was added, North West Company was removed,

“Our Canada Overall Top 40 Portfolio gained 4.8 % last month, while the S&P / TSX Composite rose 5.9 %. Year -to -date the Portfolio advanced 14.3 % versus the benchmark ‘s 12.3 %. All sectors contributed to the return last month but were led by Communication Services. With the addition of National Bank this month, the weight of Financials in the portfolio rose to 30 %”

The list in now Imperial Oil Ltd., Pason Systems Inc., Cenovus Energy Inc, Canadian Natural Resources Ltd, Trican Well Service Ltd, Suncor Energy Inc., Ovintiv Inc, Keyera Corp, Stella-Jones Inc, Alamos Gold Inc, Labrador Iron Ore Royalty Corp, Teck Resources Ltd, CCL Industries Inc., Exchange Income Corporation, Finning International Inc., Richelieu Hardware Ltd., TFI International Inc, Toromont Industries Ltd, Linamar Corp, Metro Inc.

“Volatility jumped in July through early August as investor sentiment shifted dramatically from euphoric to cautious then outright defensive late last week. Small-cap and Value outperformed most styles in July but reversed last week. The heightened recession risk reflected in our economists’ expectation of 50 bps Fed rate cuts in September and November is the biggest headwind for the nascent small-cap rally.

“The equity “rotation trade” was on full display in July, with the S&P/TSX gaining a solid 5.6% in July, sharply outperforming the S&P 500 which was up just 1.1% as mega-cap momentum waned. From our perspective, this is the type of performance trends we expect to unfold in the second half of the year and into 2025 ... Interestingly, the market rotated heavily into the Real Estate sector in July, which we flagged last month as the most oversold and deepest value sector in the TSX.

 

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