MARQUEST WEEKLY COMMENTARY – NOVEMBER 30, 2015.
Liis Palmer, Cassels Investment Management Inc.
Global Balanced Fund
Last week the MSCI World Index was down 0.1 percent. The TSX was down 0.5 percent. The C$ was down 0.2 percent against the US$. The Marquest Global Balanced Fund A units closed at $17.61 compared with $17.60 the previous week.
Significant contributors to performance were Home Depot (up 3.5 percent), CVS Health (up 2.9 percent) and AMC Networks (up 3.3 percent). Home Depot stock rose again this week after the previous week’s announcement of good results. CVS has launched a new digital pharmacy tool for medication adherence and convenience. The new tool helps patients start and stay on their prescriptions and could lead to substantial savings for CVS customers. It is part of the company’s continuing efforts to provide future looking healthcare solutions for its customers.
Laggards were Walt Disney (down 4.1 percent), Ryanair (down 3.6 percent) and Yandex (down 5.9 percent). Walt Disney’s filing that ESPN lost another 3 million subscribers in the fiscal year caused its price to drop. The number of subscribers fell 3.2 percent to 92 million. There had been a 4 percent drop from 99 million in the previous year. The concern is that more customers are opting for internet-delivered programming. Ryanair’s share price was brought down by macro concerns with regard to travel after the Turkish military shot down a Russian plane. Its growth story, its cost/productivity and its labour relations harmony continue to differentiate it from other airlines. Similarly, Yandex (Russia’s Google/Alphabet) has strong growth prospects and fair valuations but the share price was brought down by the political incident.