The Mawer New Canada Fund (Trades, Portfolio) disclosed its equity portfolio for the second half of 2022 earlier this week.
The fund, which is part of Mawer Investment Management, invests primarily in a diverse number of smaller Canada-based companies with excellent management teams that are trading at a discount. To achieve its objective of long-term, above-average growth, portfolio managers Jeff Mo and Samir Taghiyev follow a highly disciplined, research-driven, bottom-up process.
For the six months ended Dec. 31, the fund’s report shows it did not enter any new positions, but did add to six holdings, sell out of one stock and trimmed a number of existing investments. The most notable trades included a boost to Jamieson Wellness Inc. (TSX:JWEL, Financial), reduced bets on Colliers International Group Inc. (TSX:CIGI, Financial), Dye & Durham Ltd. (TSX:DND, Financial) and Element Fleet Management Corp. (TSX:EFN, Financial) as well as the divestment of Altus Group Ltd. (TSX:AIF, Financial).
Investors should be aware the semiannual reports do not give a complete picture of a firm’s holdings, but can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
Jamieson Wellness
Impacting the equity portfolio by 1.63%, the fund increased the Jamieson Wellness (TSX:JWEL, Financial) holding by 80.82%, buying 607,653 shares. The stock traded for an average price of 34.90 Canadian dollars ($25.79) per share during the period.
The New Canada Fund now holds 1.35 million shares total, accounting for its seventh-largest holding at 3.65% of the equity portfolio. GuruFocus estimates it has gained 20.61% on the investment over its lifetime.
The Toronto-based company, which manufactures natural health products like vitamins, minerals and supplements, has a CA$1.36 billion market cap; its shares closed at CA$32.55 on Wednesday with a price-earnings ratio of 26.05, a price-book ratio of 3.14 and a price-sales ratio of 2.52.
The GF Value Line suggests the stock is significantly undervalued currently based on its historical ratios, past financial performance and analysts’ future earnings projections.
At 78 out of 100, the GF Score indicates the company is likely to have average performance going forward. While it received high ratings for profitability, GF Value and momentum, the growth and financial strength ranks were more moderate.
Of the gurus invested in Jamieson Wellness, Mawer has the largest stake with 3.26% of its outstanding shares. The CI Select Canadian Equity Fund (Trades, Portfolio) also has a position in the stock.
Colliers International Group
With an impact of -1.72% on the equity portfolio, the New Canada Fund curbed its position in Colliers International (TSX:CIGI, Financial) by 36.37%, selling 168,200 shares. Shares traded for an average price of CA$139.11 each during the period.
Mawer now holds a total of 294,330 shares, which represent 2.80% of the equity portfolio. GuruFocus data shows the fund has gained an estimated 84.36% on the investment so far.
The company headquartered in Toronto, which provides commercial real estate brokerage and investment management services, has a market cap of CA$6.05 billion; its shares closed at CA$140.21 on Wednesday with a price-earnings ratio of 101.68, a price-book ratio of 9.05 and a price-sales ratio of 1.07.
According to the GF Value Line, the stock is modestly undervalued currently.
The GF Score of 85 implies the company has good outperformance potential on the back of high ratings for four of the criteria and a more moderate financial strength rank.
The Mawer Canadian Equity Fund (Trades, Portfolio) also has a position in the stock with 1.03% of its outstanding shares. The New Canada Fund holds 0.68%.
Dye & Durham
Mawer trimmed its investment in Dye & Durham (TSX:DND, Financial) by 31.46%, selling 897,500 shares. The transaction had an impact of -1.42% on the equity portfolio. During the period, the stock traded for an average per-share price of CA$15.61.
The fund now holds 1.95 million shares in total, which occupy 2.46% of the equity portfolio. GuruFocus found the New Canada Fund has lost an estimated 32.19% on the investment thus far.
The Vancouver-based software company, which provides solutions to legal and business professionals, has a CA$1.01 billion market cap; its shares closed at CA$18.24 on Wednesday with a price-book ratio of 1.81 and a price-sales ratio of 2.82.
Based on the GF Value Line, the stock appears to be a possible value trap currently. As such, potential investors should do thorough research before making a decision.
The company is likely to have poor performance going forward due to its GF Score of 66, driven by high ratings for growth and profitability, middling marks for GF Value and a low financial strength rank.
The Canadian Equity Fund has the largest stake in Dye & Durham with 3.55% of its outstanding shares. The New Canada fund holds a 3.52% stake.
Element Fleet Management
The fund reduced its stake in Element Fleet Management (TSX:EFN, Financial) by 20.16%, selling 1.06 million shares. The transaction impacted the equity portfolio by -1.03%. The stock traded for an average price of CA$16.91 per share during the period.
Mawer now holds a total of 4.19 million shares, giving it 5.93% space in the equity portfolio. As its largest holding, GuruFocus estimates the fund has gained around 43.52% on the investment.
The Canadian company, which provides management services and financing for commercial vehicle and equipment fleets, has a market cap of CA$6.85 billion; its shares closed at CA$17.47 on Wednesday with a price-earnings ratio of 18.58, a price-book ratio of 2.07 and a price-sales ratio of 3.69.
The GF Value Line suggests the stock is modestly overvalued currently.
The GF Score of 69 means the company has poor performance potential. It raked in a high rating for profitability and middling marks for growth and momentum. The GF Value and financial strength ranks, however, were low.
With a 1.07% stake, Mawer is the company’s largest guru shareholder. The Oakmark Intl Small Cap (Trades, Portfolio) Fund also owns Element Fleet Management.
Altus Group
Mawer exited its 315,608-share investment in Altus Group (TSX:AIF, Financial). The transaction had an impact of -1.02% on the equity portfolio. Shares traded for an average price of CA$50.17 each during the period.
GuruFocus data shows the fund gained an estimated 164.15% on the long-held investment.
The Toronto-based company, which provides software and advisory services to the commercial real estate industry, has a CA$2.53 billion market cap; its shares closed at CA$56.39 on Wednesday with a price-book ratio of 4.22 and a price-sales ratio of 3.45.
According to the GF Value Line, the stock is fairly valued currently.
The company has good outperformance potential based on its GF Score of 81. Although Altus received a high profitability rank, the other four ratings were more moderate.
The Royce International Premier Fund (Trades, Portfolio) holds 0.23% of the company’s outstanding shares.
Additional trades and portfolio performance
Other significant changes Mawer made to the portfolio included increased positions in Enghouse Systems Ltd. (TSX:ENGH, Financial) and Converge Technology Solutions Corp. (TSX:CTS, Financial) as well as reduced holdings of Calian Group Ltd. (TSX:CGY), Stantec Inc. (TSX:STN, Financial) and Trisura Group Ltd. (TSX:TSU, Financial).
The New Canada Fund’s $1.30 billion equity portfolio, which is composed of 38 stocks, is most heavily invested in the consumer cyclical and industrials sectors.
The fund posted a return of -18.70% for 2022, slightly underperforming the S&P/TSX Composite Index’s return of -16.70%.
