Cardinal Update – August 2021
The Power of Dividends – Inflation worries are pervasive in the news today and we share some of these concerns. We can all see higher prices in food costs, used cars, appliances, and, of course, the value of homes.
Recent readings of inflation in Canada have shown over 3% year over year increases and measures in the US have shown over 5% year over year increases. Covid-19 has caused many of these pressures given disruptions to supply chains and dramatic changes to consumption patterns. While some inflation will subside in the coming months as supply chains improve, there will also be continued pressures from major items such as the price of services (wage inflation) and the high price of shelter. Inflation is notoriously hard to predict, but if it continues to come in hotter than expected, what is the best way to protect and build wealth?
Click here to read more: Cardinal Update – August 2021
DM Portfolio Commentary – Q2 2021
Don’t miss the forest behind the pricey pile of lumber – Following more than a year of what can fairly be described as a health, social, and economic odyssey, we seem to be sitting at or near the cusp of transition on many fronts. The effectiveness and relatively wide distribution of covid-19 vaccines has suppressed the worst effects of the virus and, at long last, allowed us to gradually resume our normal patterns of living and interaction. At the same time, the resulting uptick in activity has brought with it a well-reported jump in inflation and worries that central bankers will shift gears and begin to withdraw the extraordinary monetary support that helped to keep economies
afloat during the worst of the lockdown.
Click here to read more: DM Portfolio Commentary – Q2 2021
Cardinal Update – May 2021
Steady as She Goes in Healthcare – Healthcare companies outperformed the broader index early on in the pandemic as there was a flight to safety. Since then, we have seen the technology sector and cyclical sectors such as financials and industrials significantly outperform, while healthcare has lagged. Healthcare is one of the few sectors not trading at an elevated valuation today, despite solid earnings growth and strong upcoming catalysts. The pandemic has caused the deferral of physician visits which in turn has led to fewer procedures and reduced screening for diseases. As we return to a more normal state, revenue and earnings growth should accelerate and companies such as Merck, Gilead Sciences, and Becton Dickinson will all be better off. Still, all of these names trade at attractive valuations relative to their historical ranges, peers, and the overall market.
COMPANY FOCUS: ENEL SPA – Enel Spa (Enel) is the largest European utility with a market capitalization of 83B
EUR and pays a dividend yielding 4.4%.
Click here to read more: Cardinal Update – May 2021
DM Monthly Report – April 2021
A DECADE OF SMALL CAP INVESTING AT DIXON MITCHELL – Ten years ago, we launched a new equity mandate which might have seemed like a departure for a firm that had built an investment reputation grounded on risk management. Though “small cap” is sometimes taken to mean ’speculation’ or ’venture’, there are also many businesses in the space that generate earnings and cash flow and which can be assessed on a fundamental basis. Importantly, we saw this segment of the market as an area where analyst coverage was limited and stocks were often misunderstood or disregarded, attributes which spelled opportunity for our hands-on analytical approach.
Click here to read more: DM Monthly Report – April 2021
