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The Canadian insider blog discusses news and insight found among insider and significant shareholder filings in Canada.
 
Ted Dixon is co-founder and CEO of INK Research. He is the creator of the INK Canadian Insider Index, and is the editor of the daily Morning INK and weekly Market INK reports. He is a regular contributor to the Globe and Mail's Globe Investor pages and has also worked as a part-time lecturer in corporate finance at the British Columbia Institute of Technology. Before starting INK, he worked at the Connor, Clark & Lunn Financial Group where his responsibilities included portfolio strategy and product development. He has also been an analyst at the Fraser Institute and a treasury specialist at the TD Bank. He is a Chartered Financial Analyst and member of CFA Vancouver. He holds an MBA in Financial Management from the University of Chicago, and a Bachelor of Commerce from UBC. Listen to his weekly economic commentary on Vancouver's Roundhouse Radio FM 98.3.
 
Victor Wong is a business and client development associate at Canadian Insider and an avid market watcher.
 
Nicholas Winton contributes technical commentaries on the INK Canadian Insider Index. Nicholas also writes the High on the Hog blog.

 

 

Make that two Poloz rate cuts to go!

Bank of Canada rate cuts may well have been the most popular item at global convenience store operator Alimentation Couche-Tard (INK Edge outlook: sunny; ATD.B) Wednesday, if not with their customers certainly with shareholders. The stock was the best performing name (+4.2%) in the INK Canadian Insider (CIN) Index as insider stocks rallied on the back of a quarter point drop in the central bank's overnight rate. However, the Poloz cut did not lift all boats. While both the INK CIN Index (+0.14%) and the S&P/TSX Composite Index (+0.43%) rallied on the rate news, both the S&P/TSX Completion (-0.37%) and Small Cap (-0.44%) indices dropped. Perhaps most surprising was a drop in the Dividend Aristocrats Index which suffered a -0.47% loss.

Insider sentiment remains upbeat despite China and Greece woes

July 13, 2015 - As of early Monday morning, there were only a few details available of a deal reached between Greece and its creditors for another bailout. Early indications suggest the agreement will on balance support growth. It may also increase the chances that the Federal Reserve will be able to raise rates later this year.  

Meanwhile, in China it may be too early to tell whether the summer collapse in the stock market signals either a growth or political set back for the world's second largest economy. In particular, China-related margin calls may well have been primarily responsible for the plunge in metals markets last week. It will take some time to see whether there was more to the metals wipe-out than simply the margin clerks at work.

As historic policy decisions loom, Canadian insiders still bet on reflation

The margin of error for policymakers around the globe has not been this narrow since September 15, 2008, the first trading day after the Lehman collapse. However, there is one big difference: the stakes have never been personally higher for individual policymakers.

In particular, German Chancellor Angela Merkel must balance the demands of her conservative political base against the possibility that over-pandering to her supporters could lead to an unwinding of the euro via a Greece exit. In contrast, for Greek Prime Minister Alexis Tsipras a post-euro Greece would no doubt stumble badly; its pain would not be made up for by the fact that Germany would be on the hook for billions of euros in debt.

Insider buying jumped on Monday

Insiders were quite active on the TSX yesterday. As the broad market fell about 2% on fears over Greece, insider buying surged based on TSX insider summary marker data. There were 94 stocks with buys versus only 19 with sells.

Will insiders play it cool as the summer sweating starts?

June 29, 2015 - Last week we suggested that investors could expect hotter markets this summer with the caveat that it would not come without some sweating. While the first week of summer did see stocks heat up with the INK Canadian Insider Index advancing 1.9%, the sweating starts this week with a bank holiday in Greece on the back of collapsed bailout talks.

Insiders signal a simmering summer

As we kick off summer trading, insiders are suggesting it could be a hot one. While spring went out like a lamb with the INK Canadian Insider (CIN) Index falling 1.3% last week, it held a key support level at 1,071. For the year, the INK CIN Index remains up 3.8%, ahead of the S&P/TSX Composite which is essentially flat (+0.1%).

Looking ahead, the changing of the guard message we heard from insiders during the INK CIN Index's semi-annual rebalancing remains in place. Defensive strategies have been replaced by tilting towards stocks that would benefit most from a general rise in the price level and higher long-term rates.

Number Cruncher: Eight telecom and utility stocks

What are we looking for?
 
Looking at all the stocks on the TSX, we want to screen for the highest-ranking telecom and utilities names, two popular sectors for dividend-hungry investors. Rankings are determined by the INK Edge V.I.P. criteria (valuations, insider commitment and price momentum). This is the same approach we apply across the broad market to determine membership for the INK Canadian insider index, which is used by the Horizons Canadian Insider Index ETF (HII).

Insiders continue to favour a reflating global economy

As we expected, we have seen a modest bounce in the Utilities SPDR ETF (XLU*US) which has advanced about 0.7% since our report last week. Concerns about Greece and slowing industrial production helped the long-bond sensitive group to move off its recent lows. As has often been the case throughout the economic recovery, the data has provided investors with a mixed picture. Industrial production numbers disappointed on Monday, but retail sales generally came in better than expected last Thursday. 

The persistence of some data that surprises on the downside will likely encourage the Federal Reserve to take a go-slow approach on interest rate increases.

American insiders confirming the Canadian reflation bias

Every week we provide an American insider overview for our subscribers at INKResearch.com and TD Direct investing. Below I have incorporated the commentary from this morning's INK Research American insider article which appeared before the open. Today's commentary is particularly relevant for investors in the Canadian market as insiders south of the border appear to be confirming the tilt towards growth-oriented stocks we are seeing in Canada.

Will a FOMC rate rise have to wait for a greenback correction?

Last week, we summarized the case made by Richmond Fed President Jeffrey Lacker for a June rate rise. His key assumption was that inflation was heading back to 2% which is widely viewed as the Fed's objective. Yesterday, we heard what amounted to a counter argument from newbie Federal Reserve Governor Lael Brainard. According to a Reuters article, the governor indicated that headwinds still confront the economy. Those headwinds include the recent rally in the U.S. dollar.
 
The Fed governor's comments are noteworthy because she is a permanent member of the Fed's Open Market Committee which decides the direction of monetary policy.

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