23.1%
We created the IWB Growth Portfolio in August 2012 with an initial value of $10,000. It has performed very well over the years but perhaps the most remarkable accomplishment is a break-even position in the wake of the market crash.
We advised members from the outset that this is a risky portfolio, with 100% exposure to the stock market and a focus on momentum plays. So, it should only be used by readers with higher risk tolerance. The target annual compound rate of return was initially set at 12%.
Here are the stocks that make up the current portfolio, with an update on how they have performed since our last review in September. Prices are as of the mid-day on April 9.
Waste Connections (NYSE: WCN). This stock was added to the portfolio in March. The shares reached a high of US$105.17 before the market collapsed but we still have a small net positive return. Waste collection is clearly an essential service, so while we may not see much growth for the next several months, this looks like a solid stock to hold on to. We received two dividends totalling US$0.37 per share.
Alimentation Couche-Tard (TSX: ATD.B, OTC: ANCUF). The stock split two for one at the end of September, so we now own 140 shares. The stock is down $4.85 (post-split) since the last review in September, a loss of almost 12%. The means it has done better than the overall market. The quarterly dividend was raised slightly to $0.07 effective with the March payment.
WSP Global Inc. (TSX: WSP, OTC: WSPOF). This international engineering and technology firm rather surprisingly saw its share price jump over $6 in the period since our last review. However, it had been as high as $98.12 before pulling back. Because of timing, we received three dividends totaling $1.125 per share.
Shopify (TSX, NYSE: SHOP). Shopify continues to astound, although its business model – creating eCommerce platforms for small business – is right for the times. The shares actually soared to a high of $786 pre-crash but even with the pull-back they are up almost $200 from our last review. This stock does not pay a dividend.
CGI Group (TSX: GIB.A, NYSE: GIB). Based in Montreal, CGI is the fifth largest independent information technology and business consulting services firm in the world. However, the COVID-19 crisis has had a detrimental impact on its business and the shares are down more than $20 (19.3%) since the last review. CGI does not pay a dividend.
Nike (NYSE: NKE). Nike is the world’s leading manufacturer of sportswear. We added the stock in September 2018 at US$87.35 after an impressive growth spurt. However, with all the ups and downs in the market, the stock is trading at around its original purchase price. The prospects for growth in the short- to mid-term are poor. We received two quarterly dividends totalling US$0.49.
Apple Inc. (NDQ: AAPL). Apple continues to perform well despite a slowdown in China sales. Since our last review, it is up by US$46.60, although it is down from a 52-week high of $327.85. This is normally not a volatile stock, but these are unusual times. We received two dividends for a total of US$1.54 per share. Note: contributing editor Glenn Rogers recommended selling this stock for a handsome profit last May, but we retained it in this portfolio. We are now placing it back on our Buy list.
United Parcel Service (NYSE: UPS). This is the world’s largest package delivery company (yes, even bigger than FedEx) and is on the leading edge of new delivery technologies, especially in the healthcare sector. We added it to the portfolio in September at US$118.85 and the shares went as high as US$125.31 before pulling back. We have a losing position thus far but we like the prospects for UPS in a world where eCommerce is growing rapidly so we will retain this position.
Equitable Group (TSX: EQB). We added this Canadian mortgage lending service last September when the company was showing tremendous growth. It seemed like a good idea at the time but now with the economy effectively shut down, mortgage lending is not the place to be. The shares are down $37.87 since September and we are not going to ride them down any further.
Cash. We received interest of $13.65 on our cash holdings at Motive Financial.
Here is how the portfolio stood at midday on April 9. Commissions are not considered. The U.S. and Canadian dollars are treated as being at par but obviously gains (or losses) on the American securities are increased due to the significant exchange rate differential.
IWB Growth Portfolio (a/o April 9/20)
| Symbol | Weight
% |
Total
Shares |
Average
Price |
Book
Value |
Current
Price |
Market
Value |
Dividends
Retained |
Gain/
Loss % |
| WCN-N | 8.4 | 45 | $84.48 | $3,801.60 | $86.71 | $3,901.95 | $31.05 | + 3.5 |
| ATD.B | 10.9 | 140 | $8.32 | $1,164.10 | $36.15 | $5,061.00 | $146.11 | +347.3 |
| WSP | 15.4 | 85 | $21.94 | $1,988.49 | $84.31 | $7,166.35 | $439.66 | +282.5 |
| SHOP-T | 19.5 | 15 | $78.71 | $1,180.65 | $606.22 | $9,093.30 | 0 | +670.2 |
| GIB.A | 9.1 | 50 | $85.56 | $4,278.00 | $84.36 | $4,218.00 | 0 | – 1.4 |
| NKE | 8.4 | 45 | $87.35 | $3,930.45 | $86.99 | $3,914.55 | $61.65 | + 1.2 |
| AAPL | 11.5 | 20 | $121.70 | $2,434.07 | $266.49 | $5,329.80 | $236.84 | +128.7 |
| UPS | 10.6 | 50 | $118.45 | $5,922.50 | $98.92 | $4,946.00 | $98.50 | -14.8 |
| EQB | 5.7 | 40 | $104.00 | $4,160.00 | $66.13 | $2,645.20 | $28.80 | -35.7 |
| Cash | 0.5 | $243.23 | $256.88 | |||||
| Total | 100.0 | $29,103.09 | $46,533.03 | $1,042.81 | +63.5 | |||
| Inception | $10,000.00 | +375.8 |
Comments: Despite the incredible volatility in the markets, I’m pleased to report that the Growth Portfolio broke even over the latest period. The total value last September was $47,558.96. It is now $47,575.64.
We had some big losers during the period, notably Equitable Group and CGI. But gains from Shopify, Apple, and, to a lesser extent, WSP Global helped to offset those losses.
The total gain over seven and a half years stands at 375.8%. That’s an average annual compound growth rate of 23.12%. That’s down slightly from the September number but given the current state of the markets I am pleased with the result.
Changes: None of this means we should stand on our laurels, however. In a Growth Portfolio, we need to respond quickly to dump the losers and replace them with stocks that have better potential in the current environment.
Accordingly, we will sell our positions in Equitable Group, CGI Group, and Nike. Including retained earnings, that will give us $10,868.20 to reinvest.
We will buy 180 shares of Pfizer Inc. (NYSE: PFE) for $35.38 for a total investment of $6,368.40. Pfizer is one of the leaders in the search for a treatment for COVID-19. The p/e ratio is a reasonable 12.34 and the stock pays an annual dividend of $1.52 to yield 4.3%. We will add Pfizer to the Recommended List.
We will also buy two shares of Amazon.com at $2,042.76 for an investment of $4,085.52.
That’s a total investment of $10,453.92, leaving $414.28, which will be added to our cash reserve.
With retained dividends, our total cash is now $1,623.32. We will keep the money at Motive Financial, which pays 2.2% on its Savvy Savings Account.
Here is the revised portfolio. I will review it again in August.
IWB Growth Portfolio revised April 9/20)
| Symbol | Weight
% |
Total
Shares |
Average
Price |
Book
Value |
Current
Price |
Market
Value |
Dividends
Retained |
| WCN-N | 8.4 | 45 | $84.48 | $3,801.60 | $86.71 | $3,901.95 | $31.05 |
| ATD.B | 10.9 | 140 | $8.32 | $1,164.10 | $36.15 | $5,061.00 | $146.11 |
| WSP | 15.4 | 85 | $21.94 | $1,988.49 | $84.31 | $7,166.35 | $439.66 |
| SHOP-T | 19.5 | 15 | $78.71 | $1,180.65 | $606.22 | $9,093.30 | 0 |
| PFE | 13.7 | 180 | $35.38 | $6,368.40 | $35.38 | $6,368.40 | 0 |
| AMZN | 8.8 | 2 | $2,042,76 | $4,085.52 | $2,042.76 | $4,085.52 | 0 |
| AAPL | 11.4 | 20 | $121.70 | $2,434.07 | $266.49 | $5,329.80 | $236.84 |
| UPS | 10.6 | 50 | $118.45 | $5,922.50 | $98.92 | $4,946.00 | $98.50 |
| Cash | 1.3 | $671.16 | $671.16 | ||||
| Total | 100.0 | $27,616.49 | $46,623.48 | $952.16 | |||
| Inception | $10,000.00 |
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