Insights: Have inflation stocks run out of gas?

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March 26th, 2021

This was the week which marked the 1-year anniversary of the COVID-19 market wipe-out. As of Friday March 26th, INK Canadian Insider (CIN) which tracks mostly mid-cap and economy-sensitive stocks was up more than 100% from its March 2020 low. A key issue on just about everyone's mind now is whether to stick with those economy-sensitive stocks such as oil & gas after such a powerful move. After all, we are seeing a rise of more infectious and potentially deadlier variants of the coronavirus which has inflicted another wave of lockdowns in Europe and threaten other economies.

The INK Canadian Insider Index has more than doubled since the March 23, 2020 bottom

Insider sentiment is sending cautious signals. We started the week off by downgrading the Canadian market to fair-valued in our market update. Of course, that does not mean that stocks could not get overvalued as the Federal Reserve sticks with its pledge not to hike interest rates any time soon. Meanwhile, in our US update Wednesday we suggested risks were building that a broad market top is in place. Nevertheless, in both cases we expect there will be plenty of opportunity at the stock level, particularly in the United States where higher long-term interest rates are likely to eventually weigh on Technology stocks. This possible top in the US market and the opportunities for stock pickers was a key theme in our latest HoweStreet.com interview on March 24th.

US insider sentiment is hovering around multi-year lows

Tommy Thornton seems to share our view on tech stocks which he explained on the Real Vision Daily Briefing Friday. Thornton covers a lot of ground with Jack Farley. You can read our review in the #stock_ideas channel of INK Chat including our take on some of the specific stock names he mentions in the interview. Earlier in the week, Lyn Alden was back on the Daily Briefing to explain how she sees current market conditions. Lyn believes the commodities trade was overdone and due for a pullback. However, she does not seem to have a lot of conviction as to how long the reversal will last. As such, she too prefers stock-specific situations to sector or macro theme bets right now. We also provide our take on her stock pick in the #investing_strategy channel.

Looking for growth at a reasonable price

In our March Top 30 Energy Report, we highlighted Jared Dillian's take on the oil patch. While he acknowledges things were probably overdone, he believes the shift from growth to value stocks is likely to play out for years. As such, he is sticking with the oil patch. Dillian's assumption that major style trend shifts can persist for prolonged periods is supported by Neil Howe who appeared on Real Vision Thursday. His interview is our video of the week.

Finally, in the INK Edge Top Movers report found in the #stock_ideas channel, a hydrogen name and a US-focused pot stock are two notable up movers. To registered for INK Chat, members please check your inbox for an invitation link.

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Top 3 Gainers Last Week

Company NameStock Symbol1 Week Return %
AimiaAIM13.3
Sierra MetalsSMT6.9
Frontera EnergyFEC3.4

Top 3 Losers Last Week

Company NameStock Symbol1 Week Return %
HEXOHEXO-12.7
CanWel BuildingCWX-9.4
CascadesCAS-9.3

Returns are as of the last trading day of the previous week.

Featured Clip

Insider of the Week

Peter Schoch

Airboss of America (BOS) has gained a lot of altitude over the past year, up 594%. A lot of the rise is thanks to the performance of the company's wholly-owned subsidiary AirBoss Defense Group. Last October, AirBoss of America CEO Peter Schoch announced the company would buy the 45% of the subsidiary that it did not already own for about C$92 million. That investment is looking pretty good right now.

INK Canadian Insider Index

1 Year Total Return Performance


Historical Performance

Annualized Total Return as of March 26, 2021 04:49 pm
1 Year 100.69%
3 Years 8.76%
5 Years 11.09%
10 Years 8.16%


To learn more about the Index please visit
https://index.inkresearch.com

5 Year Total Return Performance


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