Equity analysts at Echelon Capital Markets unveiled their “Top Picks Portfolio” for the first quarter of 2020 in a research report released Thursday, calling it “an aggressive, catalyst-rich portfolio of high-growth, entrepreneurial companies.”
For the fourth quarter, the firm’s portfolio returned 40.1 per cent, beating both S&P/TSX Small Cap Index (23.5 per cent) and the broader S&P/TSX Composite Index (9.0 per cent).
“The S&P/TSX Small Cap Index extended an outperformance streak over the broader TSX Composite to three consecutive quarters,” the firm said. “This reflects an aggressive recovery from the 38.1-per-cent Q120 decline when it underperformed the 20.9-per-cent decline for the broader Composite Index. We look for investors to remain focused on the high-quality small cap names with specific catalysts or underlying secular growth trends in an environment where low interest rates are expected to persist.”
“Our Top Picks Portfolio 2020 full year return at 74.0 per cent outperformed the 2020 total return of the S&P/TSX Composite and the Small Cap Index by 68.4 per cent and 61.1 per cent, respectively. The Top Picks Portfolio outperformed the Small Cap Index (our closest benchmark) in all four quarters this year and posted three consecutive quarters of double-digit outperformance over the S&P/TSX Composite Index.”
The firm said 8 of the 13 equities selected for the quarter are returning names, which it said is “signalling confidence in our Top Picks continuing to benefit from underlying secular growth trends and ample catalyst opportunities.”
The returning equities are:
* mdf commerce inc. “buy” rating
Analyst Amr Ezzat: “The Company went from a steady eddy operation with anemic growth, to one delivering healthy growth rates under a new management team.”