The CI Can-Am Small Cap fund is an open-end fund incorporated in Canada. The fund added six new stocks to its portfolio in the six months ended March 31, according to GuruFocus Real Time Picks.
The fund invests primarily in Canadian small capitalization companies but may also invest in foreign securities. According to the fund’s fact sheet, the majority of assets are held in the Other category at 21%, followed by 17.9% in the Financial sector.
The fund’s largest purchase was 10,960 shares of Alleghany, which traded for an average price of $467.73. The stock now has a 3.29% portfolio weighting.
The company provides property, casualty, and surety insurance through its Alleghany Insurance Holdings subsidiary. It is also engaged in private capital investments in oil exploration and production. The stock increased 10% over the past year and closed at $482.01 on July 1.
Over the past five years, revenue grew by 28.3%, and EBITDA grew by 17.6%. In 2014, the company reported EBITDA per share of $73.20, up from $70.80 the year before.
WSP Global (TSX:WSP, Financial)
The fund bought 119,900 shares of WSP Global for an average price of C$36.80 per share. The new holding has a 2.44% portfolio weighting.
WSP is an engineering consultancy firm that provides sustainable design services. The stock increased 4% in the past year, closing at C$39.31 on June 30. The current P/E ratio is 37.8, and the P/S ratio is 0.76.
The revenue growth rate over the past five years was 17%, while EBITDA declined 5%. Net income also saw a slight decline last year to $63 million, down from $72 million in 2013.
The current dividend yield is 3.82%, which is close to the five-year low, while the payout ratio is a high 149%.
Domtar Corp (TSX:UFS, Financial)
CI also purchased 81,100 shares of Domtar for an average price of C$52.62 per share. The stock has a 2.31% portfolio weighting. Domtar is a manufacturer of uncoated freesheet paper in North America.
Over the past year, the stock price has increased 13% and closed at C$51.75 on June 30. According to the Peter Lynch earnings line, Domtar is undervalued by as much as 50%.
The current dividend yield is 3.56%, which is close to the five-year high. The payout ratio is 23%.
Ritchie Bros Auctioneers (TSX:RBA, Financial)
The fund picked up 140,400 shares of Ritchie Bros Auctioneers for an average price of C$31.67 per share.
Ritchie Bros is an industrial auctioneer that sells equipment and other assets for construction, material handling, transportation, etc. The company uses unreserved auctions and attracts buyers from all over the world. The stock rose 31% over the last year, closing at C$34.85 on June 30. The current P/E ratio is 32.7, and the P/S ratio is 6.07.
GuruFocus rates the company’s business predictability as 3 out of 5 stars. The DCF calculator estimates a fair value of C$13.02, giving a -168% margin of safety.
Over the last five years, EBITDA per share grew by 10.93%, recording at C$1.92 in 2014. The graph below shows the earnings trend over time.
The fund also purchased 241,450 shares of Rona, which traded for an average price of C$14.19. The holding has a 1.9% portfolio weighting.
Rona sells hardware, home improvement, and gardening products in Canada. The stock price increased 31% in the past year and closed at C$15.18 on June 30. Its P/E ratio is 24.3 and the P/S ratio is 0.43.
In 2014, Rona reported net income of $78 million, a large improvement from the net loss of $153 million the year before.
Rona’s dividend yield is close to the three-year low at 0.92%, while the payout ratio is 20%.
PrairieSky Royalty (TSX:PSK, Financial)
CI’s sixth purchase was 118,450 shares of PrairieSky Royalty at an average price of C$28.75 per share. The holding has a 1.72% portfolio weighting.
PrairieSky Royalty acquires fee simple mineral title lands mainly in Alberta in order to generate free cash flow through indirect third party oil and gas investment. The stock dropped 21% over the past year, closing at C$31.51 on June 30.
For the first quarter ended March 31, the company reported net income of C$16.8 million, down from C$50.7 million in the fourth quarter of 2014.
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