IWB Growth Portfolio

a higher degree of risk in exchange for more growth potential

Rate of Return: 24.2%

Initial Value $10000

August 13, 2012

Original Issue

Update Value $134467.15

August 26, 2024

Update Issue

ANOTHER GAIN FOR GROWTH PORTFOLIO

By Gordon Pape, Editor and Publisher

Every stock in a portfolio doesn’t have to be a big winner. You just need a couple of those with a strong supporting cast to enjoy superior returns.

Our Growth Portfolio proves the point. Most of the stocks hovered around breakeven during the latest six-month period. But two posted outsize returns, pushing the whole portfolio to a gain of over 13%.

The portfolio was launched 12 years ago, in August 2012. It had an initial value of $10,000 and a target annual growth rate of 12%. It’s a high-risk portfolio, with 100% exposure to the equity markets. It’s not a place for cautious investors.

Here are the securities that make up the current portfolio, with an update on how they have performed since our last review inMarch. Prices are as of the afternoon of Aug. 22.

iShares US Aerospace and Defense ETF (BSX: ITA). Wars are never welcome news, but they offer profits for those who own defense stocks. This ETF invests in the US defense and aerospace industry. We added it to the portfolio in 2021. It posted a gain of US$16.80 per unit in the latest period and we received two distributions for a total of US$0.565 per unit.

 Alimentation Couche-Tard (TSX: ATD, OTC: ANCUF). Investors weren’t impressed by Couch-Tard’s bid to buy the Japanese parent company of 7-11 convenience stores and the stock has been sliding. The shares are down $4.88 since our last review. However, over time this stock has been a huge winner for us. The company pays a quarterly dividend of $0.175 a share.

WSP Global Inc. (TSX: WSP, OTC: WSPOF). Montreal based WSP is an international engineering and design firm. This stock has been a big winner but slowed dramatically in the latest period, gaining only $0.92. We received two dividends totaling $0.75 per share.

TFI International Inc. (TSX, NYSE: TFII). This Montreal-based trucking firm was added to the portfolio in February 2023. It did well out of the gate but stalled in the latest period, losing $2.64 per share. The company pays a quarterly dividend of US$0.40.

Nvidia (NDQ: NVDA). Sometimes it takes just one stock to carry a small portfolio. Nvidia is doing that right now. The company makes computing chips for AI processors, and its sales keep beating even the most optimistic expectations. We added it to the portfolio in February 2023 and it has quadrupled since. The shares split 10 for 1 in June, so we now own 400 of them. Over the latest period, the split shares gained $23.85. We received a tiny dividend of a penny a share.

Novo Nordisk (NYSE: NVO), This is the Danish pharmaceutical company that manufactures Ozempic, the diabetes/weight loss drug that is in huge demand world-wide. The stock was recommended in the IWB by contributing editor Adam Mayers. We added it to the portfolio in March at US$133.49. Since then, it has had a modest gain of US$3.39. We received two dividends for a total of US$1.443 per share.

Costco (NDQ: COST). Costco shares were up $191.94 in the latest period. The quarterly payout is US$1.02.

CGI Group (TSX: GIB.A, NYSE: GIB). This is a Montreal-based international consultancy company that has been on our recommended list since August 2012. We added it to the Growth Portfolio last fall at $140.51. Last March it was up to $159.66, but it slipped back to $147.85 in the latest period.

Cash. We had cash and retained earnings of $2,734.15. We deposited it at Duca Credit Union, which was offering a high rate of 5.25%. We received $71.77 in interest.

Here is how the portfolio stood at Aug. 22. Commissions are not considered. The US and Canadian dollars are treated as being at par but obviously gains (or losses) on the American securities are increased due to the exchange rate differential.

IWB Growth Portfolio (\a/o Aug. 22/24)

Symbol Weight

%

Total

Shares

Average

Price

Book

Value

Current

Price

Market

Value

Retained

Distributions

Gain/

Loss

%

ITA 5.4 50 $107.42 $5,371.00 $143.76 $7,188.00 $140.00 +36.4
ATD 8.3 140 $8.32 $1,164.10 $78.60 $11,004.00 $428.45 +881.5
WSP 15.4 90 $27.00 $2,430.29 $226.22 $20,359.60 $601.61 +762.5
TFII 4.5 30 $168.06 $5,041.80 $200.21 $6,006.30 $60.23 +20.3
NVDA 37.6 400 $23.66 $9,465.60 $123.74 $49,496.00 $10.40 +400.4
NVO 7.2 70 $133.49 $9,344.30 $136.88 $9,581.60 $101.01 +3.6
COST 13.2 20 $344.27 $6,885.40 $877.56 $17,551.20 $791.20 +166.4
GIB.A 7.8 70 $140.51 $9,835.70 $147.85 $10,349.90 $0 +5.2
Cash 0.6     $725.88   $797.65    
Total 100.0     $50,264.07   $132,334.25 $2,132.90 +167.1
Inception       $10,000.00       +1,244.7

Comments: It was another strong six months. The portfolio gained 13.5% in that period, led by huge contributions from Nvidia and Costco. ITA and NVO were also up.

The total value of the portfolio (market price plus retained distributions) now stands at $134,467.15. Over the 12 years since this portfolio was launched, we have a cumulative return of 1,244.7%. That’s an average annual compound growth rate of 24.18%.

Changes: We have a big problem. It’s a good one to have but it must be addressed. Nvidia shares have risen so far so fast that they now represent more than a third of the portfolio’s valuation. That’s too much concentration. Accordingly, we will sell 100 shares for a return of $12,374.

We will use the money to buy 170 shares of Celestica (TSX, NYSE: CLS) at $71.68 for a total cost of $12,185.60. The stock was first recommended in the IWB in November 2023 at $38.46 and is one of the top performers on the TSX this year. The shares have come off their peak and trade at a reasonable p/e ratio of 17.31.

We will add the balance of $188.40 to cash.

All else stays the same, but I’m keeping a close watch on WSP and CGI. If we don’t see a resumption of growth in the next period, it may be time to move on.

Our total cash plus retained earnings is now $3,118.95. We will move it to EQ Bank, which is offering a high interest rate of 5% on its 30-day notice savings account.

Here’s a look at the revised portfolio. I will review it again in February.

IWB Growth Portfolio (revised Aug. 22/24)

Symbol Weight

%

Total

Shares

Average

Price

Book

Value

Current

Price

Market

Value

Retained

Distributions

ITA 5.4 50 $107.42 $5,371.00 $143.76 $7,188.00 $140.00
ATD 8.3 140 $8.32 $1,164.10 $78.60 $11,004.00 $428.45
WSP 15.4 90 $27.00 $2,430.29 $226.22 $20,359.60 $601.61
TFII 4.5 30 $168.06 $5,041.80 $200.21 $6,006.30 $60.23
NVDA 28.1 300 $23.66 $7,098.00 $123.74 $37,122.00 $10.40
NVO 7.2 70 $133.49 $9,344.30 $136.88 $9,581.60 $101.01
COST 13.3 20 $344.27 $6,885.40 $877.56 $17,551.20 $791.20
GIB.A 7.8 70 $140.51 $9,835.70 $147.85 $10,349.90 $0
CLS 9.2 170 $71.68 $12,185.60 $71.68 $12,185.60 $0
Cash 0.8     $986.05   $986.05  
Total 100.0     $60,342.24   $132,334.25 $2,132.90
Inception       $10,000.00      

 

Previous updates: iwb22430 | iwb22411 | iwb22332 | iwb22308 |  iwb22232 | iwb22211 | iwb22132 | iwb22108 | iwb22031 | iwb22015 | iwb21935 | iwb21708