05-31-06: Currency continues to be a drag on performance as the US$ weakened a further 1.6% against the Canadian dollar during the month. I have a buy order in for Proctor & Gamble.
04-30-06: During the month, a new position was added in Intel. Currency continues to be a drag on performance as the US$ weakened 4% against the Canadian dollar during the month. In order to increase the US holdings to the size of the Canadian holdings, I have stopped new Canadian contributions and continued only US contributions.
03-31-06: During the month, a new position was added in Sysco. The Intel trade will be filled on April 10. Saputo has just complete the acquisition of a German company that manufactures and sells Italian specialty cheeses. This acquisition is notable not for its contribution to profits (sales were C$28 million last year) but because it marks significant geographic diversification which will greatly reduce national supply/demand problems such as it is currently experiencing in the US. Saputo is following the approach that it used to enter the US market: start out small before building scale. Germany has the largest supply of European Union raw milk. This will allow Saputo to test the waters before thinking about expanding to other parts of the EU. This is a low risk strategy with a potentially large payoff.
The portfolio continues to lag the index but this is not surprising because energy represents 10.6% of the portfolio but represents 24% of the index. Energy sector year-to-date performance of 9.6% is second only to Information Technology's 10.2%. One year performance of the sector at 48.8% is second only to gold's 54.0%. Of the 165 dividend funds tracked by the G&M, none are even matching never mind beating the index. Feel free to ask a question.
02-28-06: During the month, new positions were added in Pepsico and Walgreen. Both are cheap by their historical PEs and yields. I have buy orders in for Sysco and Intel.
Sysco is the largest marketer and distributor of foodservice products in the U.S. and Canada, holding a 14% share of the foodservice industry. The Group's products and services are provided to restaurants, healthcare and educational facilities, lodging establishments, other foodservice and around 390,000 customers. The other segments, include specialty produce, custom-cut meat, Asian cuisine foodservice and lodging industry products segments. The Group's specialty produce companies distribute fresh produce and on a limited basis, other foodservice products. Specialty meat companies distribute custom-cut fresh steaks, other meat, seafood and poultry. As of July 2, 2005, the Group operated 170 facilities throughout the United States and Canada. Rising fuel costs have hurt margins. However, the company is introducing redistribution centers (RDC) to offset these costs and reduce inventory costs. The rollout of the first of these centers has experienced problems.
Intel is the world's largest semiconductor chip maker. It is well known for its dominant market share in microprocessors for personal computers (PCs). Although the PC processor is a mainstay, INTC has expanded its product lines to serve the networking and communications markets. The company's stated mission is to be the preeminent supplier of silicon chips and platform solutions to the worldwide digital economy, indicating ambitions beyond PCs. The company has recently lost market share to AMD but is very cheap at a PE of 14 and a yield of 2%.
Feel free to ask a question.
Sector |
$ |
%
of Stocks |
| Insurance | 9,163.88 |
22.53 |
| Food & Drug Retailing | 7,260.39 |
17.85 |
| Diversified Financials | 6,837.03 |
16.81 |
| Oil & Gas | 4,182.38 |
10.28 |
| Banks | 2,544.24 |
6.26 |
| Food Products | 2,542.75 |
6.25 |
| Media | 2,384.35 |
5.86 |
| Pharmaceuticals | 2,299.48
|
5.65 |
| Software |
1,203.35 |
2.96 |
| Beverages | 1,179.52
|
2.64 |
| Industrial Conglomerates | 1,072.45 |
2.90 |
01-31-06: During the month, a new position was added in 3M. Feel free to ask a question.
12-31-05: During the month, new positions in Microsoft and Pfizer were added. Both are cheap by their historical PEs; MSFT is an "orphan" stock in that growth investors reject it and value investors have not discovered it yet. I have buy orders in for 3M and Pepsico. Both are cheap by their historical PEs and yields. I am adding US stocks because there is little that is a bargain in Canada. Additionally, these are mature companies in industries and either do not exist in Canada or are speculative, ie, they provide diversification beyond what is available in Canada. While there may still be exchange risk at a rate of 1.16, the 32% appreciation from July 2001 to December 2005 is not likely to be repeated in the short run. For the Canadian dollar to go to parity would require a further 16% appreciation. While it's possible, buying these US stocks when they are at a bargain helps offset any potential currency loss. Feel free to ask a question.
11-30-05: During the month, a new position was added in JNJ. It is cheap by its historical PE and yield. Feel free to ask a question.
