A. North American Equity Market Statistics
During the third quarter, the Canadian equity market as measured by the S&P/TSX decreased by 2.41%. Year-over-year, the index increased by 8.6%, including dividends. The substantial increase in interest rates over the past 18 months has dampened the outlook for global stock markets and hammered the value of medium to long-term bonds. Central Banks around the world are trying to slow economic growth in order to bring inflation back to what they deem as “acceptable levels”. In particular, the large rise in rates has weighed heavily on capital intensive businesses that utilize significant levels of debt on their balance sheets such as real estate and utilities/infrastructure companies. This means some of the businesses we own in our portfolios including infrastructure and precious metals businesses have struggled in 2023. This does not deter us in owning these companies because these same companies continue to grow steadily and are now trading at very attractive prices.
In fact, several of our favourite businesses are trading at substantial discounts to what we believe is their intrinsic value. This is providing us with a unique opportunities to slowly increase our weightings in these companies. Here are ten businesses that we believe are trading at greater than 25% discounts with several trading at greater than 40% discounts to intrinsic value:
Read the rest of the newsletter by downloading the PDF below.