Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. But if you buy individual stocks, you can do both better or worse than that. For example, the Crombie Real Estate Investment Trust (TSE:CRR.UN) share price is down 11% in the last year. That’s well below the market return of 7.8%. On the other hand, the stock is actually up 9.4% over three years.
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
Unhappily, Crombie Real Estate Investment Trust had to report a 33% decline in EPS over the last year. This fall in the EPS is significantly worse than the 11% the share price fall. So the market may not be too worried about the EPS figure, at the moment — or it may have expected earnings to drop faster.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. Dive deeper into the earnings by checking this interactive graph of Crombie Real Estate Investment Trust’s earnings, revenue and cash flow.
What About Dividends?
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It’s fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of Crombie Real Estate Investment Trust, it has a TSR of -4.6% for the last year. That exceeds its share price return that we previously mentioned. And there’s no prize for guessing that the dividend payments largely explain the divergence!
A Different Perspective
Crombie Real Estate Investment Trust shareholders are down 4.6% for the year (even including dividends), but the market itself is up 7.8%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Longer term investors wouldn’t be so upset, since they would have made 9%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example – Crombie Real Estate Investment Trust has 3 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.
Crombie Real Estate Investment Trust is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA exchanges.
When trading Crombie Real Estate Investment Trust or any other investment, use the platform considered by many to be the Professional’s Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
Statement from the Board of Directors, Canada Pension Plan Investment Board – Canada NewsWire
Since 1999, CPP Investments has existed to help provide a foundation upon which millions of Canadians can build their financial security in retirement. In practice, that requires managing nearly $500 billion in assets at arm’s length from federal and provincial governments, relying on a skilled, experienced and professional team. Leadership is, therefore, fundamental to meeting our objectives on behalf of Canadians and we take that responsibility of leadership very seriously.
Recently, our CEO Mark Machin decided to travel personally to the United Arab Emirates where he arranged to be vaccinated against COVID-19. After discussions last evening with the Board, Mr. Machin tendered his resignation and it has been accepted.
Mr. Machin has provided outstanding leadership to the organization as a senior executive and then CEO. His significant accomplishments will help to strengthen Canadians’ retirement income security for many decades to come. The Board wishes to thank Mr. Machin for his global perspective, leadership and commitment to excellence and we offer him our sincere best wishes for the future. In his resignation, Mark emphasized his honour and pride in leading one of the finest global investment organizations over the last five years and deeply appreciates the tremendous diligence and talent of the entire CPP Investments team. He added that he is very grateful for the dedication and guidance of the Board of Directors over the years as well as the tenacity, partnership and camaraderie of the senior management team.
Effective immediately, the Board is pleased to appoint John Graham as the new CEO of CPP Investments. In making its decision, the Board unanimously agreed John is ideally suited to lead the organization forward. He has been instrumental in helping to shape and execute CPP Investments strategy over the last decade as a longstanding employee and member of the senior management team with a successful track record of building and leading global investment businesses.
As Chair of the Board, Heather Munroe-Blum expressed that John’s commitment to the organization, to his colleagues, and to CPP Investments unique mandate is unequaled. By consistently demonstrating deep knowledge of our operations, embracing a global mindset during his time in Asia, while delivering value as a founder and leader of a key investment department, John earned the Board’s unequivocal confidence.
About CPP Investments
Canada Pension Plan Investment Board (CPP Investments™) is a professional investment management organization that manages the Fund in the best interest of the more than 20 million contributors and beneficiaries of the Canada Pension Plan. In order to build diversified portfolios of assets, investments are made around the world in public equities, private equities, real estate, infrastructure and fixed income. Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City, San Francisco, São Paulo and Sydney, CPP Investments is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. At December 31, 2020, the Fund totalled $475.7 billion. For more information, please visit www.cppinvestments.com or follow us on LinkedIn, Facebook or Twitter.
SOURCE Canada Pension Plan Investment Board
For further information: Mei Mavin, Managing Director, Corporate Communications, CPP Investments, +44 7775 873 625, [email protected] |
Bubba Watson Follows Heart With Linksoul Investment – Forbes
Two-time Masters Tournament champion Bubba Watson has always been one to wear his heart on his sleeve. So, it’s not surprising that he tends to follow his heart when it comes to the businesses he owns and the investments he makes.
While it’s not uncommon for professional golfers to ink new equipment contracts and sponsorship deals at the start of a new year (like Jon Rahm’s jump to Callaway from TaylorMade), Watson recently has been among those putting their own money out — investing in companies whose vision includes fostering greater engagement in golf.
Watson last month became an investor as well as a brand ambassador for Linksoul, the lifestyle apparel brand founded by John Ashworth that’s been active in philanthropic efforts, including a dedicated focus on junior and community golf. Ashworth and Linksoul led the $3 million transformation of Goat Hill Park in Oceanside, California, not only saving and restoring the short course, but creating a new home for the North County Junior Golf Association and building a free, three-hole kids course called The Playground.
“This isn’t your standard deal. Normally deals give you money. I’m giving them money,” Watson, 42, said in an interview, without disclosing terms of his investment. “But it’s an adventure I love. The mission, what they’ve been able to create with Goat Hill Park and junior golf, and the money they’ve been able to raise for charity through their company, it’s a special thing to be a part of. This is what drew me to it. I’m all about my heart and where my heart leads me, and that’s what I want to be a part of and have an impact with.”
Former World No. 1 and four-time major winner Rory McIlroy has been an even more active investor – among a group of prominent pro athletes involved in a $100 million round of funding for Whoop last year as well taking an equity stake in Golf Genius Software. Most recently, however, McIlroy just a month ago partnered with Drive Shack Inc. on “Puttery,” the company’s new indoor, small format entertainment experience that combines mini golf with a sports bar vibe. Drive Shack is planning to open seven Puttery locations this year, the first two anticipated this summer in Dallas and Charlotte.
“Once Covid is under control, the ability to combine high-tech mini-golf with a high-quality food and beverage menu will make Puttery a great experience for any social gathering,” said McIlroy, who’s not the first star to get in on the mini golf movement. Tiger Woods and his design company are building putting courses for another golf-entertainment concept, PopStroke, as part of a strategic partnership of his own.
Watson, meanwhile, acknowledges his business interests are “all over the map,” but until now they’ve mostly been localized to his hometown of Pensacola, where he owns a candy shop (Bubba’s Sweet Spot), a car dealership, an apartment complex he built and sold, a driving range, and has an ownership stake in the local Double-A minor league baseball team, the Blue Wahoos. In making the jump to a national brand with his Linksoul investment, Watson credits his early days in golf as well as a like-minded kinship with Ashworth, who originally started the eponymously-named Ashworth in the 1980’s and is now pursuing his passion with Linksoul.
“The golf course I grew up at was a version of Goat Hill Park,” said Watson, a 12-time winner on the PGA TOUR. “With the driving range I own, it’s not about dressing to the nines. It’s not about tucking in your shirt or wearing golf shoes or not. This is straight getting you out and playing golf and hitting balls. At Goat Hill, they have dogs, kids, people playing disc golf or 18 holes of golf. It’s about getting out and enjoying outdoor activities.
“When you think about (Linksoul), you think about John Ashworth. We’re kind of similar,” he added. “We’re on the same kind of path where we enjoy getting people involved, getting other people to see this beautiful game, the outdoor activities, and then you think about the brand where you can wear it from golf course to business meeting, to a dinner, to your kids’ recital, whatever. It just fits at all levels. We’re a lot alike in terms of our vision and going with our heart and passions. I felt it was a great partnership.”
Investment funds increase pressure on Danone CEO – TheChronicleHerald.ca
PARIS (Reuters) – U.S. investment company Artisan Partners joined activist investor Bluebell Capital Partners on Friday in demanding that French food group Danone finds a new chief executive.
Chairman and Chief Executive Emmanuel Faber has come under growing pressure as activist shareholders push for management changes to lift returns that have lagged those of some rivals during the COVID-19 pandemic.
Artisan, which has built a 3% stake in Danone, called for a split in the roles of CEO and chairman, also echoing Bluebell’s demands.
“The roles of CEO and chairman should be split to reflectmodern-day corporate governance. Governance standards also require that prior leadership leave the board. And logic demands more consumer goods experience on the board of directors,” wrote Artisan.
“A new, non-financial CEO with consumer goods experience and a track record of success should be installed as soon as possible to restore Danone to the elevated status it deserves within the French business establishment.”
Artisan has previously urged the maker of Activa yoghurt to sell its underperforming brands, such as Asian water label Mizone.
In recent months Faber had intensified action to ward off activist investors, announcing in November a plan to cut 2,000 jobs, trim product ranges and sell some assets, including the group’s business in Argentina and its Vega plant-based brand.
(Reporting by Sudip Kar-Gupta and Benoit Van Overstraeten; Editing by David Goodman)
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