The CI Can Am Small Cap (Trades, Portfolio) Fund, part of CI Investments Inc., disclosed this week it divested six holdings from its portfolio in the third quarter.
The fund invests mostly in equity and equity-related securities of Canadian small-cap companies to achieve long-term growth of capital. Its portfolio of 37 stocks is largely composed of securities in the energy and financial services sectors. In 2016, the fund returned 23.39%, beating the S&P 500’s return of 11.96%.
The positions the fund exited during the quarter are Miller Industries Inc. (MLR, Financial), Staples Inc. (SPLS, Financial), The Jean Coutu Group (PJC) Inc. (TSX:PJC.A, Financial), Telephone and Data Systems Inc. (TDS, Financial), Home Capital Group Inc. (TSX:HCG, Financial) and Finning International Inc. (TSX:FTT, Financial).
Miller Industries
In their largest sale of the quarter, the fund managers sold 159,614 shares of Miller for an average price of $25.34 per share, impacting the portfolio by -2.61%. According to GuruFocus, the fund has gained 53% on the investment since the third quarter of 2013.
The Tennessee-based manufacturer of towing and recovery equipment has a market cap of $299.79 million; its shares were trading around $26.25 on Tuesday with a price-earnings (P/E) ratio of 16.47, a price-book (P/B) ratio of 1.54 and a price-sales (P/S) ratio of 0.49.
The Peter Lynch chart below shows the stock is trading slightly above its fair value.
GuruFocus ranked Miller’s financial strength 7 of 10 and its profitability and growth 7 of 10. The company’s trailing dividend yield and forward dividend yield are both 2.7%. The dividend payout ratio is 44%.
With 10.34% of outstanding shares, Chuck Royce (Trades, Portfolio) is the company’s largest guru shareholder. He reduced his position during the third quarter. Hotchkis & Wiley, Robert Olstein (Trades, Portfolio) and Jim Simons (Trades, Portfolio) added to their holdings.
Staples
The fund sold its remaining 444,430 shares of Staples for an average price of $10.16 per share. The trade had an impact of -2.42% on the portfolio. GuruFocus estimates the fund gained 11% on the investment since the third quarter of 2016.
The Massachusetts-based retailer of office supplies has a market cap of $6.73 billion; its shares were trading around $10.25 on Tuesday with a forward P/E ratio of 12.05, a P/B ratio of 1.99 and a P/S ratio of 0.41.
According to the Peter Lynch chart below, the stock is trading above its fair value.
GuruFocus ranked Staples’ financial strength 7 of 10 and its profitability and growth 4 of 10. The company’s trailing dividend yield and forward dividend yield are both 4.69%.
The Yacktman Fund (Trades, Portfolio) also exited the stock in the third quarter.
The Jean Coutu Group
The fund divested 175,830 shares of Jean Coutu Group for an average price of 16.76 Canadian dollars ($13.20) per share. The transaction impacted the portfolio by -1.71%. According to GuruFocus data, the fund has gained 75% on the investment since the first quarter of 2011.
The Canadian drugstore chain has a market cap of CA$4.52 billion; its shares were trading around CA$24.41 per share on Tuesday with a P/E ratio of 23.37, a P/B ratio of 3.58 and a P/S ratio of 1.48.
Based on the Peter Lynch chart below, the stock appears to be trading above its fair value.
GuruFocus ranked Jean Coutu Group’s financial strength 9 of 10 and its profitability and growth 7 of 10. The company’s trailing dividend yield is 2.04% and its forward dividend yield is 2.13%. The payout ratio is 48%.
No other gurus own the stock.
Telephone and Data Systems
The fund managers sold its remaining 87,290 shares of Telephone and Data Systems for an average price of $28.26 per share, impacting the portfolio by -1.43%. GuruFocus estimates the fund has gained 13% on the investment since the third quarter of 2013.
The Chicago-based telecommunications company has a market cap of $3.06 billion; its shares were trading around $27.79 on Tuesday with a forward P/E ratio of 68.97, a P/B ratio of 0.78 and a P/S ratio of 0.63.
The Peter Lynch chart below indicates the stock is trading above its fair value.
GuruFocus ranked Telephone and Data Systems’ financial strength 5 of 10 and its profitability and growth 4 of 10. The company’s trailing dividend yield is 2.20% and its forward dividend yield is 2.27%.
Mario Gabelli (Trades, Portfolio) is the company’s largest guru shareholder with 2.87% of outstanding shares. He and Royce reduced their positions during the quarter.
Home Capital Group
The fund divested its remaining 98,695 shares for an average price of CA$11.09 per share. The trade had an impact of -1.2% on the portfolio. According to GuruFocus, the fund has lost 69% on the investment since the third quarter of 2015.
The Canadian finance company has a market cap of CA$1.35 billion; its shares were trading around CA$17.13 on Tuesday with a P/E ratio of 50.15, a P/B ratio of 0.75 and a P/S ratio of 3.47.
According to the Peter Lynch chart below, the stock is trading above its fair value.
GuruFocus ranked Home Capital’s financial strength 3 of 10 and its profitability and growth 6 of 10. The company’s trailing dividend yield is 3.04%. The payout ratio is 113%.
No other gurus own the stock.
Finning International
The fund sold 85,800 shares of Finning for an average price of CA$21.14 per share, impacting the portfolio by -0.99%. GuruFocus estimates the fund gained 8% on the investment since the first quarter of 2016.
The Canadian distributor of Caterpillar (CAT, Financial) products has a market cap of $5.2 billion; its shares were trading around CA$30.56 per share on Tuesday with a P/E ratio of 30.97, a P/B ratio of 2.65 and a P/S ratio of 0.85.
Based on the Peter Lynch chart below, the stock appears to be trading above its fair value.
GuruFocus ranked Finning’s financial strength 6 of 10 and its profitability and growth 5 of 10. The company’s trailing dividend yield is 2.44% and its forward dividend yield is 2.49%. The payout ratio is 76%.
With 1.81% of outstanding shares, the Leith Wheeler Canadian Equity (Trades, Portfolio) Fund is the company’s largest guru shareholder. While it reduced its holding during the quarter, the Mawer Canadian Equity Fund (Trades, Portfolio) increased its position.
During the quarter, the fund also reduced several other holdings, including Varian Medical Systems Inc. (VAR, Financial), Superior Plus Corp. (TSX:SPB) and Pason Systems Inc. (TSX:PSI).
Disclosure: I do not own any stocks mentioned.
