May 2017 - New Portfolio

Hey all,  welcome back to the blog!  It's the month of May and you know what that means, it's time to create another stock portfolio.   But wait, you say, didn't you just create a stock portfolio back in February 2017?   Yeah I did, but like I said back then, it's not a portfolio that I would actually want to hold because it was solely focused on one segment of the stock market, namely food and grocery related stocks, so it doesn't fit into my criteria of having a diversified portfolio.  I'll still continue to track it, just for fun, but again I want to stress don't ever hold a portfolio where the holdings are specific to a single or limited market sector (not even an all bank stock portfolio, for some of my friends, ahem, you know who you are).

I can't believe that this will be my fourth year doing this, and I'm even more surprised at how well the model portfolios have been doing.   This year, I thought about what portfolio theme I would bring to the table.  The portfolio I wanted to do this year was a high flyer one, like holding WCN, CSU, FSV, CIGI, CCL.B, QSR and PBH.  These guys have done extremely well and I have or had some of them in my own portfolio, but they are a bit more volatile and it wouldn't be in everybody's best interest to recommend them.   If you want to set up your own model portfolio with the stocks I just listed, go for it.  If your interest is piqued though and you want to see it tracked on this blog, I can be easily persuaded, just let me know.

So with that being said,  here are the stocks that will comprise the May 2017 portfolio (data gathered from Google Finance):

AYA - Amaya Gaming

Amaya Inc is a gambling company operating online, mobile, and land-based casinos. The company offers real and simulated gambling along with games such as poker through its online platform at its desktop and mobile outlets.

CAS - Cascades

Cascades Inc produces, converts and markets packaging and tissue products composed mainly of recycled fibres. The Company has operating units in North America and Europe.

MAL - Magellan Aerospace

Magellan Aerospace Corp through its subsidiaries engineers and manufactures aeroengine and aerostructure components for aerospace markets, including products for defence and space markets, and complementary specialty products.

MFI - Maple Leaf Foods

Maple Leaf Foods Inc is a producer of food products. Its portfolio includes prepared meats, ready-to-cook and read to serve meals and value-added fresh pork and poultry.

RCH - Richelieu Hardware

Richelieu Hardware Ltd distributes, imports & manufactures specialty hardware & complementary products. Its products include kitchen cabinet, glass hardware, decorative and functional panels, door & window components, and veneer sheets & edge banding.

TCN - Tricon Capital

Tricon Capital Group Inc is an investor and asset manager engaged in the residential real estate industry in North America. It invests through Tricon Housing Partners, Tricon American Homes, Tricon Lifestyle Communities and Tricon Luxury Residences.

UNS - Uni Select

Uni-Select Inc along with its subsidiaries is engaged in the distribution of automotive products including auto parts, tools and equipment; and paint and related products for motor vehicles.

The May 2017 (M2017) portfolio will hold 100 shares of each stock.  Each stock was considered to have been purchased on April 28th, 2017 using it's last closing price.  Commissions of $10 per stock have been factored into the initial portfolio cost.

Here's how the portfolio looks on May 1st, 2017.   The starting (book) value of this portfolio will be $17,327.

My criteria for picking these stocks:

Stock price: more than $10
Market Capitalization:  between 1 Billion and 5 Billion
P/E Ratio:   under 30
Average Volume: over 10,000
Beta: under 1.0 (AYA is the exception)

Diversify across different market sectors.
Avoid the following market sectors: Mining, Resources, Energy due to their volatility.
Other sectors excluded from selection:  Banks and Telecom, because probably everybody already have them in their portfolios (well you should have some exposure to them).

If we had created this portfolio last year, the one year return would have been 35%.  Let's see how this portfolio fares over the coming year.

Oh, before I go, I want to let you know that this will be the final model portfolio to feature Canadian stocks.  In 2018, I will give myself a bigger challenge, because there are no more stocks on the Toronto Stock Exchange that meet my portfolio requirements.  I will still maintain the criteria I have used thus far in stock selection but my focus will be on US stocks.  With the variety of stocks on the US markets, I will probably have to start doing research in the fall of 2017 to have my data ready for 2018.

With so much information in this blog post, I'll document the results of the prior year portfolios towards the end of May.  See you in a few weeks!