Our approach to investing begins with more than 20 years of fundamental research experience. Veritas Asset Management was founded to capitalize on the successful fundamental research of our affiliate Veritas Investment Research (‘VIR’). Throughout VIR’s 20+ years of producing independent research, it has proven that detailed, high-quality fundamental research produces better investment decisions. Our goal is to provide our investors with consistent risk-adjusted returns that beat investment benchmarks over the short and long term.
Our portfolios offer concentrated, high-conviction positions in companies identified through our research and due diligence work, applying a disciplined and systematic selection process. Through our research, we identify opportunities to profit from mispriced securities, either by buying top-quality companies for long-term capital appreciation or through long-short hedging strategies. While our portfolios are primarily focused on Canadian equities, our portfolio managers also consider opportunities beyond Canada.
Our portfolio manager, Sam LaBell, was a guest on BNN Bloomberg to discuss our outlook for the market. He discussed the health of Canadian and U.S. consumers and economies, as well as the third-quarter results for Canadian Pacific Kansas City Ltd. (NYSE, TSX: CP).
Sam said he is looking beyond the short-term issues the railway had this quarter, such as with the Port of Vancouver strike.
Railway stocks are usually correlated with the economy, but in the case of CPKC, it has many opportunities to improve its operations after its merger with Kansas City Southern. "We're looking for self-help opportunities or things that that company can do that other companies cannot that can give them a better performance and outrun any headwinds that might arise."
Other individual stocks discussed included Agnico-Eagle Mines Ltd. (NYSE, TSX: AEM), RioCan REIT (TSX: REI.un), Fortis Inc. (TSX: FTS), TransAlta Corp. (TSX: TA), Canadian Natural Resources Ltd. (NYSE, TSX: CNQ), Suncor Energy Inc. (NYSE, TSX: SU) and Cenovus Energy Inc. (NYSE, TSX: CVE).
Sam Labell is an Advising Representative with Veritas Asset Management Inc., an Investment Fund Manager, Portfolio Manager and Exempt Market Dealer registered in the provinces of Ontario and Manitoba. The opinions and statements expressed by Sam in his appearance are his personal views and do not necessarily reflect those of the Veritas Group of Companies. They are effective as at the date of the broadcast only and may be subject to change.
As we enter the fourth quarter of 2023, the global economy is now well into the second-order effects of the inflation cycle, triggered by wage pressures, rising input costs, and higher interest rates as central banks try to contain price increases. On balance, the more time passes at higher inflation and borrowing rates, the more stress it puts on consumers and the economy. In this update, we review our YTD performance, consider the health of the U.S. and Canadian consumer, and outline how we are navigating current market risks.
The top contributor to the fund in October was Alimentation Couche-Tard Inc (TSX: ATD), which rose after unveiling an updated five-year plan at its October Investor Day. The plan anticipates double-digit EBITDA growth, driven 75% by organic initiatives and 25% by potential acquisitions. On the organic side, the ongoing roll-out of Fresh Food and private labels are pushing up C-store margins, while ATD continues to enjoy very strong fuel margins. ATD remains a best-in-class operator in the retail fuel business.
Other top contributors included Tourmaline Oil Corp (TSX: TOU), Fortis Inc (TSX: FTS), Wheaton Precious Metals Corp (TSX, NYSE: WPM) and Agnico Eagle Mines Ltd (TSX, NYSE: AEM). .
As a sub-advisor, Veritas Asset Management Inc. utilizes the award-winning, independent, and in-depth research of Veritas Investment Research Corporation to formulate a diversified portfolio of equities with a bias toward yield, and capital preservation, and uses a covered option overlay to generate additional yield and further mitigate downside risk and volatility.
Visit Next Edge to learn more about the fund and read the full monthly commentary.