Paul Carter, chief investment officer at Capstone Asset Management Inc., believes Canadian stocks offer good value despite high market valuations. His firm, which manages about $700 million in assets, focuses on dividend-income and value-oriented investing guided by Christian principles, avoiding sectors like alcohol, gaming, and tobacco.
Capstone’s Canadian equity composite has delivered strong returns, with a 16.9% year-to-date gain, a 23.7% one-year return, and a 26.9% annualized three-year return. As of September 30, the top holdings included B2Gold Corp., Bank of Nova Scotia, Power Corp. of Canada, Canadian Natural Resources Ltd., and OpenText Corp..
Recently, Carter added Premium Brands Holdings Corp., Pet Valu Holdings Ltd., and Intact Financial Corp. to his portfolio. Premium Brands, despite near-term challenges, offers long-term growth potential through acquisitions. Pet Valu, though facing soft same-store sales, remains a stable business with recurring consumer demand. Intact, despite higher catastrophe losses, maintains strong underwriting and reinvestment opportunities.
Carter sold National Bank of Canada in August after its acquisition of Canadian Western Bank led to significant gains. He cited concerns about overall bank valuations and a strategic shift to holding only two Canadian banks.