After a “buoyant” 2021 for Canadian equity markets, analysts at Stifel expect investors to “finally see value matters in portfolio returns” this year.
With that view, the firm announced its “top picks” for the first quarter of the year, featuring six new additions to the 20-stock list, in a research report released late Monday.
“With central banks tapering asset purchases and forecasts expecting them to raise interest rates over the next year, a litmus test for equities is at hand,” the firm said. “Despite recent volatility, many measures of valuation and speculation remain near record highs, sensitivity to this rate hike cycle may also be heightened.
“Further, with inflation in both the U.S. and Canada at 40-year highs, one may question whether central bankers will support equity markets as readily as they have in recent years. One of the most consistent outcomes from prior rate hike cycles has been a shift from momentum to value in equity markets.”
The stocks remaining on the list are:
- AirBoss of America Corp. ( “buy”) with a $55 target (and an expected return of 27.5 per cent). Average: $55.50.
- ATS Automation Tooling Systems Inc. (, “buy”) with a $58.50 target (13.8 per cent). Average: $61.90.
- AutoCanada Inc. ( “buy”) with a $65.50 target (63.8 per cent). Average: $60.14.
- Capstone Mining Corp. (CS-T, “buy”) with a $7.25 target (27.4 per cent). Average: 47.68.
- Enerplus Corp. ( “buy”) with an $19 target (36.2 per cent). Average: $15.44.
- Green Thumb Industries Inc. (GTII-CN, “buy”) with a $80 target (201.9 per cent). Average: $56.12.
- Guru Organic Energy Corp. ( “buy”) with a $24 target (56.4 per cent). Average: $21.88.
- K92 Mining Inc. ( “buy”) with a $14 target (110.5 per cent). Average: $11.61.
- Spin Master Corp. ( “buy”) with a $58 target (27.8 per cent). Average: $54.73.
- Stantec Inc. ( “buy”) with a $79 target (14.5 per cent). Average: $78.29.
- Tourmaline Oil Corp. ( “buy”) with a $66.25 target (55.0 per cent). Average: $62.16.
- Trican Well Service Corp. (“buy”) with a $4.40 target (47.7 per cent). Average: $4.12.
- Trulieve Cannabis Corp. (TRUL-CN, “buy”) with a $135 target (322.0 per cent). Average: $80.20.
- Wheaton Precious Metals Corp. (WPM-T, “buy”) with a $71 target (47.3 per cent). Average: $69.60.