By Gordon Pape, Editor and Publisher
As you might expect, the energy sector was a major contributor to the decline, losing 26.8%. Given the sector’s 18.8% weighting, it was the biggest drag on the TSX.
It wasn’t the largest loser in percentage terms, however. The Capped Metals and Mining Index fell a horrendous 48.9%, the worst one-year performance of a sub-index in years. Financials, the largest TSX sector with 38.4% weighting, didn’t provide any help, losing 6.8% for the year.
But there were a few bright spots amongst all the rubble. Information technology stocks were up 13.5% for the year, the healthcare sector was ahead 22.5%, and consumer staples were up 10%.
Stocks that did well last year.
Some individual stocks bucked the downtrend and pleasantly surprised investors who own them. Here are six recommendations from the Internet Wealth Builder newsletter that did especially well.
Enghouse Systems (TSX: ESL)
Based in Markham, Ontario Enghouse Systems is a leading global provider of enterprise software solutions serving a variety of vertical markets. The company has expanded through a combination of organic growth and strategic acquisitions. Enghouse recently released fourth quarter and fiscal year-end 2015 results (to Oct. 31) that showed a 27% increase in revenue and an improvement of 28.7% in adjusted EBITDA. Net income was up 5.7%. The company has a pristine balance sheet with $98 million in cash and short-term investments and zero long-term debt. The stock ended 2014 at $41.49 and closed on Dec. 31 at $74.34 for a gain of 79% for the year.
Alimentation Couche-Tard (TSX: ATD.B)
This stock is a marvel – it just keeps going and going and going, thanks to some brilliant acquisitions by a first-rate management team. From a small Quebec-based convenience store chain it as grown into an international powerhouse with a strong presence in the U.S. and Europe, as well as its home country. The shares started the year at $48.69 and finished on Dec. 31 at $60.91 for a gain of 25% in 2015.
Boyd Group Income Fund (TSX: BYD.UN)
This little-known company (one of the few to retain income trust status) has two things going for it. First, it’s in an almost recession-proof business – automobile repair. Second, it has major exposure to the U.S. dollar. About 80% of Boyd’s revenue is in American currency, which, as we all know, has been running wild this past year. When the loonie turns back up, Boyd may not look quite so attractive, although the business is growing at an impressive rate ? third-quarter revenue was up 38%. The shares ended 2014 at $47.60 and are now at $66.10 for an impressive gain of almost 39% on the year.
Franco-Nevada (TSX, NYSE: FNV) and Agnico Eagle Mines (TSX, NYSE: AEM)
It was a lousy year for gold. The price of bullion finished down 10.4% from its 2014 close of US$1,184.10, finishing the year at US$1,060.85. Many of the major gold miners suffered even more. Barrick Gold (TSX, NYSE: ABX) is off 18.2% from its 2014 close of $12.52 while Goldcorp (TSX: G, NYSE: GG) has dropped 25.7% from its 2014 finish at $21.51. But two gold stocks that not only held their ground but actually made a profit despite the fall in bullion were royalty company Franco-Nevada and miner Agnico-Eagle. FNV did well because it has a low risk business model – the royalty structure means it is not exposed to any of the costs of exploration and production. It closed in Toronto on Dec. 31 at $63.30, up 10.6% from its 2014 closing price of $57.21. AEM parlayed increased output with a cut of almost 30% in cost per ounce produced to keep itself in the black and make investors happy. It finished at $36.37 on Dec. 31, which represented a gain of 25.8% for the year. Impressive!
Suncor Energy (TSX, NYSE: SU)
Suncor shares didn’t advance in 2015 but they didn’t lose much either. They started the year at $36.90 and finished at $35.72, for a loss of only 3.2% for 2015. Compare that to the widespread carnage in the oil patch and it’s an amazing result. Give a lot of the credit to Suncor’s relentless cost controls and its downstream refinery business whose profitability has helped to offset some of the losses from the drop in the oil price. Now the company is in acquisition mode, aggressively pursuing Canadian Oil Sands (TSX: COS) in a hostile takeover bid. If that succeeds – we should know this month – who knows what the next target will be.
