We have rebalanced the Nasdaq Inovestor Canadian Index based on our Stockpointer® Canada model portfolio. These trades are effective as of Friday, April 21 after market close.
Here are the details of the trades:
In:
1. Nutrien Ltd (NTR) – Intra-sectorial transaction. The company is in the top of its sector.
Outs:
1. Canfor corporation (CFP) – Intra-sectorial transaction. The company is no longer in the top of its sector.
2. Lumine Group Inc (LMN) – We received the company following a spin-off from Constellation Software (CSU).
Trimming:
• Constellation Software exceeded our 10% cap for an individual holding, so we trimmed the position to 9%.
Increased positions:
Since we did not trade last quarter, our cash position was accumulating due to dividends, the trimming of CSU and the Lumine spin-out. Without our intervention, NTR would have been the fourth largest stock of our portfolio at a weight of approximately 5.1%. In our view, the company did not deserve this position yet, the high allocation being due to exceptional circumstances.
Instead of using our cash balance exclusively on NTR as we would normally do, we injected cash in three companies with high SP score, low weight and/or low weight relatively to their respective SP score. We also took into account our policy of not reinvesting dividends in our held stocks, which tends to result in dividend-paying stocks being penalized in the long run.
• Toronto-Dominion Bank (TD), SP of 71 with a weight of about 2.7% before the increase and 3.7% after (+1%)
• National Bank (NA), SP of 71 with a weight of about 4% before the increase and 5% after (+1%)
• Richelieu Hardware (RCH), SP score of 79 with a weight of about 3.2% before the increase and 3.7% after (+0.5%)
