Sound bites: As the old economy rallies, high flying pot & FANG stocks at risk

Ad blocking detected

Thank you for visiting CanadianInsider.com. We have detected you cannot see ads being served on our site due to blocking. Unfortunately, due to the high cost of data, we cannot serve the requested page without the accompanied ads.

If you have installed ad-blocking software, please disable it (sometimes a complete uninstall is necessary). Private browsing Firefox users should be able to disable tracking protection while visiting our website. Visit Mozilla support for more information. If you do not believe you have any ad-blocking software on your browser, you may want to try another browser, computer or internet service provider. Alternatively, you may consider the following if you want an ad-free experience.

Canadian Insider Ultra Club
$500/ year*
Daily Morning INK newsletter
+3 months archive
Canadian Market INK weekly newsletter
+3 months archive
30 publication downloads per month from the PDF store
Top 20 Gold, Top 30 Energy, Top 40 Stock downloads from the PDF store
All benefits of basic registration
No 3rd party display ads
JOIN THE CLUB

* Price is subject to applicable taxes.

Paid subscriptions and memberships are auto-renewing unless cancelled (easily done via the Account Settings Membership Status page after logging in). Once cancelled, a subscription or membership will terminate at the end of the current term.

In my latest Talk Digital Network interview with Jim Goddard, I highlight how Canadian insiders have tilted towards old economy stocks. This move is likely in anticipation of better economy growth across the Canadian economy, notably Western Canada. With growth potentially on the upswing, old economy value stocks are likely to be regain favour with investors who will no longer have to pay premium valuations for growth. A shift towards value investing could put the relative performance of previous high flyers such as U.S. FANG (Facebook, Amazon, Netflix and Google) and Canadian marijuana stocks at risk. Indeed, we have already seen some interesting moves this month with auto stocks soaring as some marijuana stocks stumble.

The chart below shows Canopy Growth (CGC) versus AutoCanada (ACQ) so far in December.

 

Of course, not all growth stocks would be laggards in a value environment. There will be exceptions, likely among market leaders. However, a low rate environment may no longer be there to lift all growth stock boats.

So, what do insiders like? The old stuff: oil patch, farm equipment suppliers (Ag Growth) and pickup truck vendors (Auto Canada).  The pie chart below shows the sector allocation of the INK Canadian Insider Index as of the fall rebalance date of November 18th.

 

The pie chart is part of our Index presentation which can be downloaded in PDF format here.

 

Listen to or download the interview below or visit Howestreet.com. It is also on YouTube.

Running sneakers | Air Jordan Sneakers

Join the discussion in INK Chat!