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Mawer Canadian Equity Fund's Top Five Focuses on Finance Sector

Monica Wolfe

Monica Wolfe

133 followers

The Mawer Canadian Equity Fund (Trades, Portfolio) reported its fourth quarter portfolio yesterday which highlighted 45 stocks, with one being a new buy over the quarter. The fund’s portfolio is valued at $1.56 billion and maintains a quarter-over-quarter turnover of 9%.

This Canadian equity fund is managed by Jim Hall, CFA and Vijay Viswanathan, CFA. According to Mawer’s website their Mawer Canadian Equity Fund (Trades, Portfolio) invests primarily in securities of larger capitalization Canadian companies. It also reports that Treasury bills or short-term investments, not exceeding three years to maturity, may also be used on occasion.

The following five companies represent the five largest holdings of the Mawer Canadian Equity Fund (Trades, Portfolio).

Toronto-Dominion Bank (TSX:TD)

The fund’s largest holding is in Toronto-Dominion Bank where they hold on to 1,637,848 shares of the company’s stock, representing 0.09% of the company’s shares outstanding as well as 5.3% of their entire portfolio. Over the past quarter the Canadian guru fund added 10%, or 148,882 shares, to his holdings. He bought these shares in the quarterly price range of C$45.51 to C$50.05. From the estimated average quarterly price, the price per share is up approximately 8.3%.

Mawer Canadian Equity’s historical holding history:

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Toronto-Dominion is a Canada-based bank. The Company and its subsidiaries are collectively known as TD Bank Group (the Bank or TD). The bank serves its customers in four operating businesses.

Toronto-Dominon’s historical revenue and net income:

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The analysis on the company reports that its price is near a 10-year high, its operating margin is expanding and it has shown predictable revenue and earnings growth.

The Peter Lynch Chart suggests that the company is currently undervalued:

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Toronto-Dominion Bank has a market cap of C$95.05 billion. Its shares are currently trading at around C$51.72 with a P/E ratio of 14.40 and a P/S ratio of 3.38. The company had an annual average earnings growth of 4.20 over the past ten years.

GuruFocus rated Toronto-Dominion the business predictability rank of 4-star.

Constellation Software (TSX:CSU)

Mawer Canadian Equity Fund (Trades, Portfolio)’s second largest position is in Constellation Software where the fund holds on to 362,621 shares of the company’s stock, representing 5.2% of their assets managed as well as 1.71% of the company’s shares outstanding.

During the past quarter the fund reduced their position -1.03% by selling a minor 3,767 shares of the company’s stock. They sold these shares in the fourth quarter price range of C$178.25 to C$226.23 per share. The company’s price per share Is not trading up approximately 34.4%.

Mawer’s historical holding history:

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Constellation is engaged in the development, installation, and customization of enterprise software and related professional services and support. The company acquires, manages, and builds vertical market software businesses that provide software solutions.

Constellation Software’s historical revenue and net income:

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The analysis on Constellation reports that the company’s P/B, Price and P/S ratio are all at a 5-year high, while its dividend yield is at a 5-year low. It also notes that the company has issued $425.82 million of debt over the past three years.

The Peter Lynch Chart suggests that their company is currently overvalued:

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Constellation Software has a market cap of C$5.58 billion. Its shares are currently trading at around $263.43 with a P/E ratio of 53.00 and a P/S ratio of 4.12. The company had an annual average earnings growth of 22.90 over the past ten years.

Bank of Nova Scotia (TSX:BNS)

The guru’s third largest holding is in the Bank of Nova Scotia where he maintains 1,152,410 shares of the company’s stock, representing 4.9% of their total portfolio as well as 0.1% of the bank’s shares outstanding.

Over the past quarter the fund upped their stake 9.13% by purchasing 96,455 shares of the company’s stock. He bought these shares in the quarterly price range of C$58.83 to C$66.45, and since then the price per share has increased roughly 2.3%.

Mawer Canadian Equity’s holding history as of the close of the fourth quarter:

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Bank of Nova Scotia is a full-service financial institution, which operates its business in four major business lines: Canadian Banking, International Banking, Global Wealth Management and Scotia Capital.

Bank of Nova Scotia’s historical revenue and net income:

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The analysis on the Bank of Nova Scotia reports that the company’s price is near a 10-year high, its operating margin is expanding and it has shown predictable revenue and earnings growth.

The Peter Lynch Chart suggests that the company is currently undervalued:

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Bank of Nova Scotia has a market cap of C$78.77 billion. Its shares are currently trading at around $64.83 with a P/E ratio of 12.40 and a P/S ratio of 3.55. The company had an annual average earnings growth of 7.10% over the past ten years.

GuruFocus rated the company the business predictability rank of 4-star.

Royal Bank of Canada (TSX:RY)

The guru fund’s fourth largest holding goes to the Royal Bank of Canada where they maintain 999,032 shares of the company’s stock. This position makes up for 4.6% of their total portfolio as well as 0.07% of the company’s shares outstanding.

Over the past quarter Mawer Equity upped their holdings 10.16% by purchasing a total of 96,455 shares of the company’s stock in the fourth quarter price range of C$65.98 to C$71.75. Since then the price per share is up approximately 4.5%.

Mawer’s historical holding history:

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Royal Bank of Canada is a diversified financial services company, which provides personal and commercial banking services and a broad suite of products and financial services to individual and business clients.

Royal Bank of Canada’s historical revenue and net income:

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The analysis on the Royal Bank of Canada reports that the company’s dividend yield is near a 3-year low and that its price is near a 10-year high. It also notes that the company’s Piotroski F-Score is high, it has shown predictable revenue and earnings growth and its operating margin is expanding.

The Peter Lynch Chart suggests that the company is currently undervalued:

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Royal Bank of Canada has a market cap of C$104.85 billion. Its shares are currently trading at around $72.70 with a P/E ratio of 13.00 and a P/S ratio of 3.38. The company had an annual average earnings growth of 6.50% over the past ten years.

GuruFocus rated the company the business predictability rank of 4-star.

Canadian National Railway (TSX:CNR)

The guru’s fifth largest position goes to Canadian National Railway where they hold on to 1,157,380 shares of the company’s stock. This position makes up for 4.5% of their total portfolio as well as 0.14% of the railway’s shares outstanding.

Over the duration of the fourth quarter the fund upped their stake 7.95% by purchasing 85,200 shares of the company’s stock. They purchased these shares in the quarterly price range of C$52.60 to C$61.48. Since then the price per share has increased approximately 7.6%.

Mawer’s historical holding history:

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Canadian National Railway, together with its wholly-owned subsidiaries, is engaged in the rail and related transportation business.

Canadian National Railway’s historical revenue and earnings growth:

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The analysis on Canadian National Railway reports that the company has shown predictable revenue and earnings growth, its operating margin is expanding and its price is near a 10-year high. It also notes that the company’s dividend yield is near 5-year low and that over the past three years they have issued C$1.1 billion of debt.

The Peter Lynch Chart suggests that the company is currently overvalued:

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Canadian National Railway has a market cap of C$51.37 billion. Its shares are currently trading at around $62.14 with a P/E ratio of 20.10 and a P/S ratio of 4.97. The company had an annual average earnings growth of 9.50% over the past ten years.

GuruFocus rated the company the business predictability rank of 5-star.

You can check out the Mawer Canadian Equity Fund’s complete fourth quarter portfolio here.

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