News Articles
The Wall Street Journal
Thursday, February 11, 2010
CANADA TIP SHEET: Zohny Looks Beyond TSX Leaders
By Monica Gutschi
TORONTO (Dow Jones)--The broad gains that helped Canadian equities soar nearly 31% in 2009 are unlikely to be repeated this year, making for a stock-picker's market, says Youssef Zohny.
With governments reducing fiscal-stimulus programs, inflation on the horizon, and the prospect of tighter monetary policies, the cyclical sectors that roared to life last year are likely to plateau or even retreat. Since 80% of the Toronto Stock Exchange's key index consists of energy, materials and financials, Zohny believes the probable gainers lie in less-dominant sectors of the market.
"I'm bearish on the TSX index but bullish on individual companies," says Zohny, an associate portfolio manager at Vancouver-based Van Arbor Asset Management. "Whatever is happening on the economy side, there are always good value opportunities."
Limiting themselves to companies with market capitalization above C$250 million and a minimum five-year trading history, Van Arbor's managers use 40 to 50 quantifiable metrics - including earnings growth, dividend growth, shareholder return, price to book value and price momentum - to come up with 100 names. From there, they apply a topdown macro analysis and a risk-management overlay to determine which sectors they believe will outperform.
"It's kind of a two-step process," Zohny says, and both have to agree: "There's a kind of synergy. It's either a two-sided buy or a two-sided sell."
They then select the top 20 companies from the pool, weighing all equally in the fund.
The strategy has led to outsized gains. The Van Arbor Canadian Advantage fund doubled in 2009, easily outpacing its peers and the S&P/TSX Composite Average. And while the TSX is still 20% below its July 2008 peak, the fund is now 20% above it.
Zohny attributes the outperformance to the fund's move into commodities - especially oilservices companies - early in 2009. Now, however, the managers are looking more closely at grocers, telecommunications providers and utilities, what Zohny calls "stable revenue companies" which remain undervalued even after the market's gains.
"Last year, a lot of the hot stocks and hot sectors did very well, and a lot of these companies didn't participate," Zohny says. "If the market flatlines, even on a valuation basis, a lot of these companies will at least catch up to the market."
Among his top picks is electrical utility TransAlta Corp. (TAC), which boasts a dividend yield of 5.2%, is reasonably priced, and is likely to increase exports as the Canadian dollar declines. Another favorite is cable-television provider Shaw Communications Inc. (SJR), which has a dividend yield between 4-5%, strong cash flow and solid growth prospects given its recent purchase of a wireless spectrum. Maple Leaf Foods Inc. (MFI.T) has "made a remarkable turnaround" in the past year, overcoming a food-safety problem and restructuring its operations. "We're seeing some return of confidence," Zohny says.
He also likes the outlook for baker George Weston Ltd. (WN.T), which is expanding and set to benefit from demographic trends.
The Wall Street Journal
- posted by: ZLC Private Investment Management
Reuters Canada
Wednesday, February 03, 2010
Van Arbor sees flat market; safer stocks to star
"Canadian fund managers Andrew Parkinson and Youssef Zohny are buying cheaper safe-haven stocks like utilities instead of banks and resource firms, betting shares that profit most from a growing economy will lag as governments drain stimulus spending."
Reuters Canada
- posted by: ZLC Private Investment Management
Globe And Mail
Thursday, January 28, 2010
Loading up on lagging sectors
"Who: Andrew Parkinson, managing director and portfolio manager at Van Arbor Asset Management in Vancouver.
The Strategy: To identify a fairly small number of undervalued stocks in sectors that are lagging for one reason or another, hold them until they start looking pricey and then sell them and switch to something else."
Globe And Mail
- posted by: ZLC Private Investment Management
Van Arbor on BNN 12/29
Monday, January 04, 2010
With the markets about to close the books on 2009, investors are already looking ahead to what may happen in the world of equities in 2010. BNN speaks to Andrew Parkinson, managing director, Van Arbor Asset Management.
Van Arbor on BNN 12/29
- posted by: ZLC Private Investment Management
Van Arbor on BNN 11/05
Monday, November 16, 2009
BNN explores in-depth what matters most to investors.
Van Arbor on BNN 11/05
- posted by: ZLC Private Investment Management
Van Arbor on BNN 09/29
Tuesday, September 29, 2009
With crude oil falling below $70 per barrel, Andrew Parkinson, managing director, Van Arbor Asset Management says to invest in stocks for people who stay at home.
Van Arbor on BNN 09/29
- posted by: ZLC Private Investment Management
Van Arbor on Globe and Mail
Thursday, August 27, 2009
A less-is-more investing strategy"When Andrew Parkinson is ferreting out stocks for a mutual fund, the magic number is 20.
"What's the benefit of holding a stock that is less than 1 per cent of a portfolio?" asks the manager at Van Arbor Asset Management Ltd. "If it doubles, it really doesn't do much for the portfolio."
Betting boldly on 20 stocks has helped his $15-million Van Arbor Canadian Advantage and the $3-million World Advantage funds gain 32 per cent and 39 per cent, respectively, for the year ended July 31."
Read More...
Van Arbor on Globe and Mail
- posted by: ZLC Private Investment Management