There are many Canadian companies with long-term histories of outperforming the S&P/TSX Composite Index. As the historical top gainers are proven winners on the exchange, these top stocks should be in every Canadian’s retirement portfolio.
When you aren’t sure which stocks to buy, you know you can trust established, reputable companies that rarely ever lose any price momentum. Constellation Software (TSX:CSU) has been on a 10-year uptrend on the Toronto Stock Exchange.
Since 2010, the stock price has climbed 3,650% versus the index level percent change of 57.02%. The good news is that you haven’t missed out on making money on this diversified technology stock.
Buy stocks on long-term uptrends
It’s never too late to buy stocks on long-term uptrends like Constellation Software. Stocks like this might undergo small, temporary dips much like the one Constellation Software experienced in 2018. Nevertheless, these companies will almost always bounce back.
There’s a reason why Constellation Software has been on such a long uptrend. This technology stock reports a return on equity (ROE) of 63.42%!
Return on equity is the net income of a company divided by total shareholder equity. A high return on equity indicates that investors can feel confident that their investment will pay returns later on.
If you are wondering which types of stocks in which to invest, find established companies with long-term uptrends and a high ROE. That way you won’t need to worry about losing your life savings in stocks like Constellation Software.
Buy stocks with strong EPS growth
In the past year alone, the stock has returned 49% on the TSX. By comparison, the S&P/TSX Composite Index has increased by just 13.23%.
Canadians who want to earn alpha-level returns (above market average returns) in the stock market in 2020 should find stocks that consistently outperform the market such as Constellation Software.
Constellation Software is a technology company with high earnings growth. In 2018, Constellation Software brought in $17.90 in earnings per share (EPS), 71% higher than 2017’s reported EPS of $10.47. In 2016, Constellation Software reported $9.76.
Smart investors look for dependable growth in earnings. So before you invest in new, hot stocks with outsized share price increases compared to the EPS growth, you should re-evaluate your options. Overpriced stocks with hard-to-justify price momentum are too risky for the average investor.
Stick with proven earners before taking on risk
Before taking on risk in your Registered Retirement Savings Plan (RRSP) or Tax-Free Savings Account (TFSA), make sure you have reliable stocks like Constellation Software in your portfolio.
There’s nothing wrong with making speculative bets in the market to add some potentially profitable risk to your stock market portfolio. Before you make those bets, however, you need to ensure that you have exhausted your less risky investment options with similar expected returns.
Constellation Software has a five-year beta of about 0.7, less than the market average of approximately 1.0. If you use the beta as a risk measure, you can determine how well you’re optimizing your portfolio returns with respect to market risk.
Self-investing isn’t difficult. You just need to learn how to avoid unnecessary speculation and instead earn easy, painless money in the stock market.
There’s nothing better to an income investor than the sight of dividends rolling into your account. But the old saying goes there are two things certain in life – death and taxes… and the latter can result in some of those precious dividends slipping through your fingers and into the taxman’s pocket!
But did you know that dividends from Canadian-based companies are eligible for special tax credits? For further details on this – and to find out the name of the single most tax-efficient account to hold your US stocks in! – simply click the link below to grab your free copy of our new report…
Fool contributor Debra Ray has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Constellation Software.
Pot shop owners worry they'll lose customers if halt on OCS deliveries stretches on – CBC.ca
Pot shop owners say they’re worried they will lose customers and run out of product if a halt on Ontario Cannabis Store deliveries stretches on and consumers turn to the illicit market.
The stores said Tuesday they have been left with no other choice but to make do with the stock they have after the provincial pot distributor informed them Monday that a cyberattack faced by one of its logistics partners had left it unable to process or deliver orders to marijuana shops and customers.
“I don’t like to order massive quantities of any one thing because I rotate a lot of things through, so when I get disrupted, it means that the shelves are going to be bare,” said Elisa Keay of K’s Pot Shop in Toronto.
“It means that some customers are going to come in, shake their head, upset they’re not getting what they want and they’re going to go somewhere else because they don’t want to hear that it’s not my fault … and there was a cyberattack.”
The OCS has said there is no indication that its systems were targeted or its customers’ information was compromised during the Aug. 5 attack on the parent company of its third-party distribution centre, Domain Logistics, but deliveries were stopped “out of an abundance of caution to protect OCS and its customers.”
Domain Logistics has not responded to a request for comment and the OCS has not offered a timeline for how soon it could restart deliveries, but promised to provide an update later Tuesday.
The timing is terrible for Keay. In recent weeks, she’s seen an uptick in sales, but not getting a delivery, means she’s selling through items quicker and will be more likely to have to turn customers away, if products aren’t sent to her store.
Like all other cannabis stores in the province, she also can’t seek cannabis elsewhere because the roughly 1,333 licensed pot stores in Ontario must buy the products they sell from the government-backed OCS.
“When you’re my only wholesaler and you’ve got a firm grasp on who can get delivery and when we can get delivery, it leaves us zero options,” Keay said.
“We’re totally at their mercy.”
Small businesses ‘freaking out’
With no idea when deliveries could restart, High Tide Inc. has begun reallocating inventory from its lower volume Canna Cabana shops to higher volume ones, said senior vice-president of corporate and public affairs Omar Khan, in an email.
But independent businesses with single locations can’t model that behaviour, pointed out Sean Kady, co-owner of Cosmic Charlies, a Toronto pot shop.
Independents are also less likely to have a big stockpile because most don’t place huge orders.
“They’re on a more tight, fixed budget, so from week to week, we can only spend so much and if you’re not getting that product that you need, what are you supposed to do and how are you supposed to pay the rent?” he said.
While his store was almost “overstocked” on Tuesday, he’s heard of other retailers “freaking out and pulling their hair out” because of their dwindling supplies.
The situation has created trouble for Lisa Bigioni, who owns the Stok’d cannabis chain.
She estimates she has enough marijuana to keep her stores stocked for a week but worries about the halt on deliveries continuing past that.
She’s also had to put a weekend opening of a new store complete with a barbeque and parking lot games on hold because she’s unsure when product will arrive.
“We put a lot of time and effort into planning the grand opening … and all of that is going to have to be rescheduled,” she said.
Cameron Brown, vice president of The Retail Cannabis Council of Ontario, says this halt in deliveries could cause a “significant shortage of cannabis in Ontario” if it continues throughout the week.
“The next worry for a lot of retailers is when their next inventory shipment is going to come from to get through not only this week but another big weekend in August — one of the busiest times so far in cannabis.”
OSC waiving delivery fees until Sept. 30
An OCS letter to retailers obtained by The Canadian Press said “as a goodwill gesture,” the OCS will waive retailer delivery fees until Sept. 30 and a $500 processing fee for one emergency order per store between Sept. 1 and March 31, 2023.
But many shop owners don’t feel that’s commensurate to the risk their businesses are facing.
Keay feels if customers don’t find the products they want at their store, they’ll go elsewhere — a rival shop in Ontario’s crowded market or even to an illicit dispensary or dealer that the industry has been fighting against since recreational marijuana was legalized.
A customer that finds another option might be lost forever, so Keay said, “There’s no sort of compensation that can fix damaging someone’s business.”
This incident follows an OCS announcement May 11 that the Ontario Provincial Police were investigating the “misappropriation” of confidential store sales data.
That breach “was no failure of IT security or systems,” the OCS said, after it quickly launched an investigation to identify the source, restricted access to internal data reports and notified the police.
Both breaches came amid heightened competition in Ontario’s cannabis industry, which has seen the number of pot shops explode in recent months.
Many predict store closures are on their way because demand for cannabis has not increased at the same rate as shop openings, the illicit market remains strong and stores are consistently having to reduce their margins as rivals steadily drop prices.
RBC warns house price correction could be deepest in decades | CTV News – CTV News Toronto
A housing correction, which has already led to four consecutive months of price declines in the previously overheated Greater Toronto Area market, could end up becoming “one of the deepest of the past half a century,” a new report from RBC warns.
New data released by the Toronto Regional Real Estate Board (TRREB) last week revealed that the average benchmark price for a home in the GTA fell six per cent month-over-month in July to $1,074,754.
Sales were also down a staggering 47 per cent from July, 2021.
In a report published on Aug. 4, RBC Senior Economist Robert Hogue said recent data from real estate boards underlines that higher interest rates are beginning to take a “huge toll” on the market.
Hogue said that with further hikes to come, prices will likely continue to slide in the coming months.
That prediction, it should be noted, goes against a report from Royal LePage last month which painted a rosier forecast for sellers in which values would more or less holding for the rest of the year following some declines in the second quarter.
“Our expectations for further hikes by the Bank of Canada—another 75 basis points to go in the overnight rate by the fall— will keep chilling the market in the months ahead,” Hogue said. “We expect the downturn to intensify and spread further as buyers take a wait-and-see approach while ascertaining the impact of higher lending rates. Canada’s least affordable markets Vancouver and Toronto, and their surrounding regions, are most at risk in light of their excessively stretched affordability and outsized price gains during the pandemic.”
The Bank of Canada has hiked the overnight lending rate by 225 basis points since March and has warned that further hikes will be necessary given that inflation remains at a near 40-year high.
In his report, Hogue pointed out that the housing correction “now runs far and wide across Canada” but he said that it is particularly pronounced in the costlier markets of Toronto and Vancouver.
In fact, Hogue said that housing resale activity in Toronto is at its slowest pace in 13 years, outside of the early days of the COVID-19 pandemic.
The stockpile of available homes is also up 58 per cent from a year ago, he noted.
“With more options to choose from and higher interest rates shrinking their purchasing budgets, buyers are able to extract meaningful price concessions from sellers,” he said, pointing out that the average price of a home in the GTA is down 13 per cent from March. “We expect buyers to remain on the defensive in the months ahead as they deal with rising interest rates and poor affordability.”
While Hogue did say that condos in the City of Toronto are likely to remain “relatively more resilient” he said that prices elsewhere will continue to fall for the time being, especially in the 905 belt “where property values soared during the pandemic.”
The July data from TRREB suggested that the average price of a home in the GTA was still up one per cent from July, 2021.
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