MARQUEST MONTHLY PAY UPDATE – MAY 30, 2014
Liis Palmer, Cassels Investment Management Inc.
Last week the Marquest Monthly Pay Fund (A units) distributed 7.5 cents and closed at $5.30, down from $5.40 the previous week. This equates to a loss of 0.5 percent on the week. The TSX was down -0.7 percent in the same period.
Leading contributors in the portfolio were Bank of Nova Scotia (up 2.4 percent), Sherritt International (up 6.0 percent) and AutoCanada (up 6.0 percent). Bank of Nova Scotia’s share price rose after is released strong quarterly results. Q2 profit rose 14 percent, ahead of estimates, as higher income at its domestic banking and global wealth units offset a flat performance in international retail banking. BNS also successfully sold a large portion of its stake in CI Funds in a large public offering last week.
AutoCanada is a multi-location automobile dealership groups. As of December 31, 2011, the Company operated 24 franchised dealerships in British Columbia, Alberta, Manitoba, Ontario, New Brunswick and Nova Scotia. During the year ended December 31, 2011, its dealerships sold approximately 28,000 vehicles and processed approximately 300,000 service and collision repair orders in its 333 service bays. As of December 31, 2011, it was authorized to sell through its dealerships the vehicle brands, which include Chrysler, Dodge, Jeep, Ram, Fiat, Hyundai, Nissan, Infiniti, Volkswagen, Mitsubishi and Subaru. In addition, it sells a range of used vehicles. Last week AutoCanada closed its debt offering and acquired its first BMW/Austin Mini dealership in Quebec.
Laggards in the portfolio were CIBC (down 3.2 percent), Pembina Pipeline (down 3.3 percent) and Teck Resources (down 1.3 percent). CIBC raised its quarterly dividend by 2 cents to $1.00. Q2 earnings were ahead of expectations and CIBC is now the best capitalized of all the major banks. Its Tier 1 common equity ratio is 10 percent. CEO, Gerry McCaughey expressed interest in expanding the wealth management division. CIBC’s share price had appreciated in the prior week in anticipation of good results.
The information above is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed may change as subsequent conditions vary. The information and opinions contained in this paper are derived from proprietary and non-proprietary sources deemed by the author to be reliable. The information is not necessarily all-inclusive and is not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any way for errors and omissions is accepted by Marquest, its officers, employees or agents. This paper may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. We caution you not to place undue reliance on these statements as a number of important factors could cause actual events or results to differ materially from those expressed or implied in any forward-looking statement contained herein. All forward-looking statements are subject to change and are provided in good faith but without legal responsibility. © 2014 Marquest Asset Management Inc. All rights reserved.