Insights: Running on a full tank of crude

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June 27th, 2021

As we finish out the first half of 2021, it has been an exceptional year for Canadian mid-cap-oriented stocks as tracked by the INK Canadian Insider Index which is up 25.0% versus only 11.3% for the Nasdaq 100 Index. The table was set for a good first half when we received news in late 2020 that the ETF provider using the INK CIN Index was going to close the fund in March. There probably could not have been a better contrarian signal. Energy stocks have been the leaders so far this year with the S&P/TSX Capped Index up 55.9%.

Based on what we have seen over the past week on the INK platform, we expect oil patch stocks to continue to work as an investment theme. The highlight of the week for us was our release of the June Energy Top 30 Stock Report where all thirty stocks had a sunny INK Edge outlook. That suggests there remain excellent opportunities at the stock level in the group. While we are not in the early days of the Energy sector's bull market, there is still money to be made.

Obsidian Energy is 3rd ranked in the sector and has more than doubled since our April 13th Morning Report

Generally, we expect inflation-sensitive stocks to continue to do well. Last week, two inflation-sensitive stocks showed up in our morning reports, a forestry company on June 21st, and steelmaker Stelco Holdings (STLC) which we featured June 23rd on INK Ultra Money Free. On June 24th, we also came across a potential opportunity in economy-sensitive stock Canadian Tire (CTC.A) which we also published as a free video and is our video of the week.

Waiting for bond yields to move lower

Eventually, the good times will come to an end for inflation-sensitive names and we tend to agree with Raoul Pal who implied on Friday that 10-year bond yields breaking below 1.40% would be a signal that deflationary forces could be ending the party.  Our Tuesday and Friday morning report stocks could come to life under such a scenario. Our Tuesday stock is a US multi-state cannabis operator, a space that could attract investors seeking growth during a deflationary period, while our Friday stock focuses on the resale of pre-owned luxury fashion accessories which sounds like a pretty good business for harder economic times. Finally, for those following the psychedelics industry, make sure to watch Mike Green's interview with Christian Angermayer, founder of Apeiron Investments, Atai Life Sciences, and COMPASS Pathways which appeared Friday on INK Ultra Money.


Top 3 Gainers Last Week

Company NameStock Symbol1 Week Return %
Frontera EnergyFEC27.7
Paramount ResourcesPOU19.9
Birchcliff EnergyBIR19.5

Top 3 Losers Last Week

Company NameStock Symbol1 Week Return %
Airboss of AmericaBOS-5.3
Alimentation Couche-TardATD.B-2.2
QuebecorQBR.B-1.7

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

Featured Clip

Insider of the Week

Kim Rivers, Trulieve Cannabis CEO

Kimberly Rivers has been one of the most active CEO's buying stock this month. As we wrote in our June 22nd morning report, she bought 29,000 Trulieve (TRUL)  subordinate voting shares on a direct ownership basis at US$35.94 on June 15th. We subsequently featured her trade in Saturday's Globe and Mail who is buying and selling. 

INK Canadian Insider Index

1 Year Total Return Performance


Historical Performance

Annualized Total Return as of June 25, 2021 04:49 pm
1 Year 76.56%
3 Years 10.50%
5 Years 11.65%
10 Years 9.69%


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

5 Year Total Return Performance


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