Stantec, a global leader in sustainable engineering, architecture, and environmental consulting, has been a steady performer in the SIA 5-Stock Equity Income model. For nearly two years, it has consistently ranked in the Favored Green Zone of the Combined universe report, which includes the Dow Jones Canadian Dividend Index, S&P/TSX Composite High Dividend Index, and S&P/TSX Canadian Dividend Aristocrats Index. However, it's time to part ways with Stantec as it has recently fallen to the Neutral Yellow Zone, and its SMAX score has dropped to Red. This shift triggers our rules-based methodology to sell the underperforming stock. We are replacing Stantec with the highest-ranked stock from the Relative Strength rankings that has a SMAX score of 6 or higher. As of yesterday, Agnico Eagle Mines, currently ranked #3 in the Combined Cdn Dividend Report, is the top choice. Stantec was a solid performer for the portfolio. On November 28, 2022, we purchased 25,877 shares at $67.63 each. We held the position until yesterday, when we sold the shares at $107.99 each, realizing a gain of $40.36 per share and an overall return of 60%. We would like to highlight two key points from the attached weekly candlestick chart with the SIA Report History Overlay tool: 1. Chart Analysis: Stantec’s chart might appear appealing to some analysts, as the shares are trading above the 50-week moving average and holding support in the $110-$100 range. This could suggest a decent entry point. However, this analysis contrasts with our primary indicator, relative strength, which shows divergence. 2. SMAX Indicator: The SMAX has turned RED with a reading of 5, indicating that Stantec is beginning to underperform compared to other asset classes, not just other companies in the dividend report. Given the high opportunity cost, it’s prudent to upgrade the funds to Agnico Eagle, which is demonstrating significant strength against its peers and other asset classes.
The table below outline the performance of the concentrated 5-Stock Equity Income Hypothetical Model, known for consistently delivering returns that surpass market averages through a rules-based high concentration strategy. Used by Elite Advisors as part of a master portfolio of 16-20 names with multiple SIA 5-Stock Sleeves, this concentrated equity income strategy serves as a crucial component for Alpha equity income strategies. On its own, the strategy has achieved a CAGR of 14.84%, compared to the benchmark (iShares Canadian Select Dividend Index ETF) at 7.94%, and a 5-year return of 17.08% versus 8.91%. The portfolio's Alpha is 2.80 compared to the benchmark’s 0.82, with a Beta of 0.57 versus 0.89, and an average monthly gain of 3.63% compared to 2.83%. Backed by a 10-year track record of market outperformance, these models are supported by live trade signals to brokers and further analyzed using SIA-AI back-testing tools. Advisors note the effectiveness of these portfolios in streamlining and scaling business operations. Stock Selection Process: FOR ADVISOR USE ONLY - The hypothetical stock selection process recommends the top 5 relative strength ranked names from the Combined - Dow Jones Canadian Dividend Index & S&P/TSX Composite High Dividend Index & S&P/TSX Canadian Dividend Aristocrats Index universe while limiting their selections to only 1 stock per sector for diversification. Once a holding has been sold, it replaces it with the highest ranked stock from the Relative Strength rankings with a 6 or higher SMAX score. If the top ranked stock in the list already has a sector holding in the current model, the selection would move down the rankings to the next alternative. The strategy would sell any investment that moves into the Neutral zone of the report if the investment has a 5 or less SMAX score or if it moves to the Unfavored zone.
Disclaimer: SIACharts Inc. specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investors investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIACharts Inc. nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.
