More BMO BMO chief investment strategist Brian Belski took a bit of a victory lap as his “Buy Canada” trade idea worked out in the third quarter,
“the TSX gained 9.7% in the third quarter, outpacing the S&P 500 by over 4%, marking the strongest outperformance for Canada since the first quarter of 2022. Indeed, all sectors posted positive returns during the quarter and half the sectors in Canada posted double digit gains, led by the more interest rate sensitive areas like Real Estate, Financials and Utilities. While there has certainly been a yield focus to the recent rally, which does benefit Canada, this rally has been a generalized ‘Buy Canada’ trade that is exhibiting improvement in overall equity market flows; a trend we expect to persist well into 2025. Overall, this positive broad-based, low dispersion rally among TSX sectors is a positive sign that the market is beginning to see improving breadth and confidence in the fundamental backdrop of Canadian equities. As such, as valuations normalize faster than expected, we believe the market will likely pass our current 24,500 year-end price target sooner, rather than later”
Mr. Belski’s Consistent Growth stock list, emphasizing companies with low earnings volatility and improving profit margins, has been outperforming. The stocks in this list are Barrick Gold Corp., Alamos Gold Inc., AtkinsRalis Group Inc., Colliers International Group Inc., Celestica Inc., Element Fleet Management Corp., Granite REIT, goeasy Ltd., Great-West Lifeco Inc., iA Financial Corp. Inc., Intact Financial Corp., Killam Apartment REIT, Loblaw Cos. Ltd., Linamar Corp., New Gold Inc., Premium Brands Holdings Corp., Sienna Senior Living Inc, Transcontinental Inc., Trisura Group Ltd. and TMX Group Ltd.