The Canadian stocks we’ve uncovered have posted a positive one-month return amidst a sharp broad-market selloff
SmallCapPower | November 22, 2018: Global equity markets have been on a downward trend since the beginning of October, as fears of rising interest rates translate into higher discount rates and lower asset prices. Tech stocks have been hit particularly hard, driven by investors’ concerns over the growth trajectory within the mega-cap tech complex. Canadian stocks have not been immune to this market selloff, with the TSX index declining by 3.5%. Despite the sharp market drop, however, there are stocks that continue to deliver positive returns for their shareholders. The three well-known Canadian stocks we’ve identified are weathering the current turmoil in global financial markets nicely.
*Market Cap and share prices as of November 20, 2018.
Home Capital Group Inc. (TSX:HCG) – $17.31
Alternative Lending
Home Capital Group is a specialty finance company. The Company operates through its subsidiary, Home Trust Company. Home Trust is an alternative lender that operates as a federally-regulated trust. The Company offers deposits, mortgages, retail credit and credit card issuing services. Home Capital has offices across Canada. As of Q3 2018, the Company has over $22 billion in loans under administration, and is well capitalized with a common equity Tier 1 ratio of 23.27%. Home Capital’s shares advanced by as much as 25% on November 7, 2018, as the Company reported better-than-expected earnings and announced plans to repurchase $300 million of its shares.
- Market Cap: $1.4 Billion
- 1 Month Return: +28.2%
Canada Goose Holdings Inc. (TSX:GOOS) – $83.95
Apparel
Canada Goose is a Toronto-based designer and manufacturer of premium outdoor apparel, selling its products through both wholesale and direct-to-consumer channels. The Company’s products are sold in 38 countries, including jackets, vests, and accessories for the fall, winter, and spring seasons. Canada Goose has exhibited rapid growth since its IPO in March 2017, with the Company posting y/y revenue growth of 46.4% in FY2018. Canada Goose’s shares jumped following a Q2 2019 earnings beat announced on November 15, 2018.
- Market Cap: $4.2 Billion
- 1 Month Return: +26.0%
Shopify Inc. (TSX:SHOP) – $179.34
E-commerce Solutions
Shopify provides a cloud-based, e-commerce platform for businesses around the world, including Canada, U.S., U.K., and Australia. The Company’s platforms are designed to offer merchants a one-stop shop when running their business. Merchants can manage inventories, process orders and payments, ship orders, access working capital financing, and utilize data analytics all from Shopify’s platform. Although most of the Company’s merchants are small and medium-sized businesses, large companies such as Pepsico (NASDAQ:PEP) are also clients of Shopify. Merchants can also sell their products on Amazon (NASDAQ:AMZN) and Ebay (NASDAQ:EBAY) through the Shopify platform. The Company reported strong earnings on October 25, 2018, but has failed to maintain its upward trajectory, as it fell victim to the broader equity selloff in the tech space.
- Market Cap: $16.9 Billion
- 1 Month Return: +1.8%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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