It Was a Great Summer for These 5 Canadian Large Caps

The end of summer doesn’t mean the end of the line for the return potential in at least 4 of these names.

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The Motley Fool

Here we are at the last trading day of August.  Where has the summer gone?  As a kid, this was always one of the worst days of the year.  Now as a parent, it’s one of the best!  While we Canadians love our summer and the warm weather it brings, this summer was particularly good for investors in the following five large cap stocks:

Shoppers Drug Mart (TSX:SC) – It’s little surprise that with an increase of 30%, this summer’s best performing large cap (measured from May 31) was Shoppers Drug Mart.  Unfortunately for investors, this is the last time we’ll be able to utter these words as Shoppers will cease to exist as a stand-alone publicly traded entity before next summer hits.  We’ve been all over the Loblaw/Shoppers transaction at, and from a Canadian investor’s perspective, it’s a shame to see this go-to investment idea disappear.

IAMGold (TSX:IMG) – Gold stocks weathered a well-documented drubbing in the first five months of the year, but managed to stabilize and have actually had a nice bounce over the course of the summer.  With its 19% increase since the end of May, IAMGold has offered the best return out of any of its large-cap peers.  However, even though the summer months have been kind to this name, the stock is still down 44% year-to-date.  The company’s balance sheet is reasonably clean and if gold continues to move higher, IMG shares are likely to not just follow, but outpace the underlying commodity.

Magna (TSX:MG) – Magna shares just keep going higher.  Not only is the stock up almost 19% since the end of May, Magna shares have climbed by almost 64% year-to-date and by 91% over the past year.  The run that the stock has had has raised the question of how much is left in the tank several times in the past few months in several posts.  (click here and here)

Suncor (TSX:SU) – Suncor has benefitted from a few variables that helped spur it to a summertime gain of 15%.  One, the differential between western Canadian crude and WTI oil has narrowed considerably.  A good thing.  In addition, the price of WTI oil made a nice move over the course of the summer.  Finally, some folksy-old investor from Omaha indicated that he’s taken a position in the company.  Roll these three factors up and combine them with the fact that Suncor’s valuation remains relatively cheap and you’ve got yourself a recipe for a nice stock move.

Catamaran Corporation (TSX:CCT) – One of Canada’s market darlings in recent years just keeps getting cuter. Catamaran booked a 14% gain in the summer, with much of it coming after second quarter results were released.  Catamaran announced a sizeable acquisition alongside these second quarter results and is encouraged by the environment in which it operates.  Prospects for continued growth are significant and the company has the financial wherewithal to follow through.

Foolish Takeaway

Yesterday’s winners can very easily turn into tomorrow’s losers, yet several of these companies have what it takes to keep the momentum rolling.  Like the summer of 2013 however, the most fundamentally sound (potentially) of the bunch is about to disappear.  New names will surface however, and we’ll be here to help you find them!  Enjoy the last long weekend of the summer!

Shoppers was one of the 5 stocks profiled in our report “Buy These 5 Companies Instead of a Canadian Index Fund”.  Simply click here now to download this report and learn about the other 4.  It’s FREE!

The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool Canada’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.

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Fool contributor Iain Butler doesn’t own shares of any companies mentioned.  The Motley Fool doesn’t own shares in any of the companies mentioned. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

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