It’s been well-documented that the Canadian market has been left in the dust by its U.S. peers. Day after day, whether it’s the S&P 500 or the Dow Jones Industrial Average, the U.S. market seems to be setting a new all-time high.
The reason for the discrepancy has been the poor performance of resource stocks, which account for about 50% of the S&P/TSX Composite Index.
If, however, we look away from the train wrecks that exist in the resource space, Materials especially, we find a collection of stocks that are doing very well. In fact, 15 of the 60 companies that make up the large cap S&P/TSX 60 currently trade within 2% of their 52-week high (as of May 7th). A large majority of the remainder are resource based.
Tabled below are 5 of these well-performing companies along with their year-to-date returns (as of May 7th).
YTD % Return
|Magna Int’l (TSX:MG)||
|Tim Horton’s (TSX:THI)||
|Manulife Financial (TSX:MFC)||
|BCE Inc. (TSX:BCE)||
|S&P TSX Composite||
Source: Capital IQ
The tailwind created by a rebounding North American auto market has grabbed Magna and lifted it to the top of our list. As long as economic fundamentals remain in-tact, there’s little reason to believe this momentum will stop anytime soon. Magna’s valuation metrics however are beginning to approach the top end of their range. A similar theme throughout this collection of names.
Tim Horton’s stock received a recent bump when a U.S. based hedge fund indicated it wants the Canadian icon to alter its course. Manulife reported better than expected results which boosted its shares and BCE and Enbridge just keep doing what great blue chip stocks do – go up.
The Canadian market has become even more difficult than usual for investors to navigate in recent months. Resource oriented stocks are clearly in a funk, however, it seems like everything else is performing very well. For those seeking value-oriented opportunities, it’s a frustrating time to say the least.
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Fool contributor Iain Butler owns shares in Magna International. The Motley Fool has no positions in the stocks mentioned above.
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