Matco Canadian Funds Recap Q1 & Q2 2021

With the majority of second-quarter earnings reported in Canada, here’s a quick summary and highlights for the Matco Canadian Funds: Matco Small Cap Fund and Matco Canadian Equity Income Fund.

Matco Small Cap Fund - Portfolio Highlights:

Information Services Corporation: provides registry and information management services

• 26% year over year earnings growth
• beat earnings expectations by 44%

Calian Group Ltd.: operates in the advanced technology, health, learning and information technology segments

• 32% year over year earnings growth
• beat earnings expectations by 47%

Leon’s Furniture Limited: Canada’s largest retailer of furniture and major appliances and owns The Brick brand

• 17% year over year earnings growth
• beat earnings expectations by 81%

Second Quarter

• 60% of companies beat expectations
• 18% average earnings beat
• 14% year over year earnings growth rate

First Quarter

• 71% of companies beat expectations
• 57% average earnings beat
• 76% year over year earnings growth rate

Matco Canadian Equity Income Fund – Portfolio Highlights:

TFI International Inc.: provides transportation and logistics across North America

• 44% year over year earnings growth
• beat earnings expectations by 46%

Canadian Tire Corporation Limited: owns banners such as Mark’s, SportChek, Party City, Atmosphere, and PartsSource

• 26% year over year earnings growth
• beat earnings expectations by 44%

Gibson Energy Inc.: owns oil storage and processing facilities and pipeline infrastructure

• 25% year over year earnings growth
• beat earnings expectations by 26%

Second Quarter

• 69% of companies beat expectations
• 12% average earnings beat
• 31% year over year earnings growth rate

First Quarter

• 81% of companies beat expectations
• 30% average earnings beat
• 21% year over year earnings growth rate

Source: all figures from CPMS and Bloomberg

The Bottom Line

Strong corporate earnings have driven stock markets globally year to date. Both funds continue to perform well with significantly lower commodity exposure, a higher dividend yield and trading at almost less than half the valuation of the Canadian stock market.

Matco Funds have a substantially different composition than the market indexes as a result of our proprietary M-factor investment process. The Matco Small Cap Fund has an Active Share of 91% and the Matco Canadian Equity Income Fund has an Active Share of 73%. Active Share measures the percentage of a fund’s portfolio that differs from the benchmark index and was designed to quantify the degree of active management.

Please reach out to me for more information on Matco funds.

Anil Tahiliani, MBA, CFAVice President & Portfolio Manager, Canadian EquityLocal: +1-403-539-5085