U.S. fund manager 'shocked' cheap Canadian stocks being overlooked
BNN Bloomberg
One American fund manager said he’s “shocked” more international investment firms aren’t putting their money to work in Canadian stocks, considering their value relative to U.S. equities.
One American fund manager said he’s “shocked” more international investment firms aren’t putting their money to work in Canadian stocks, considering their value relative to U.S. equities.
“I'm shocked that hedge funds aren’t crawling across the border and, you know, becoming an activist in some of these stocks because people are getting wealthy and no one's paying attention,” said Cole Smead, president and portfolio manager of Arizona-based Smead Capital Management, in an interview on Wednesday.
“Canada is cheap. Canada is cheap relative to the United States. It's a commodity-oriented market in so many ways - and this is a great commodity era.”
Smead said he’s bought into Canadian oil and lumber stocks including Cenovus Energy Inc, MEG Energy Corp. and West Fraser Timber Co. Ltd.
A recent boom in commodity prices has helped lift Canadian resource stocks, which now have roughly the same weighting on the Toronto Stock Exchange as the financial subgroup. Historically, financials have dominated the TSX in terms of being the heaviest-weighted subsector.
A Commodity Markets Outlook report from the World Bank on Tuesday said it expects energy prices to rise further because the conflict between Russia and Ukraine could potentially persist into 2024 and continue to aggravate global supply chains.
