News & Opinion

The latest insights from Front Street Capital's fund managers
31 Mar 2017

For the quarter the fund generated a return of 1.25% and while it slightly trailed the TSX (+1.70%) overall we are reasonably happy with this return given the weakness of the energy sector. During the quarter the energy sector was down 6.29%; in fact when one looks at medium cap and small cap energy names they underperformed the group. Names such as Crew (- 34%), Seven Generations -22.4%, Torque – 17.4%, Whitecap – 14.9% etc. were just a few names that underperformed. Even the pipeline stocks were down in the quarter.

31 Mar 2017
Market Overview

If we had to put a title on this quarter’s energy commentary, it would be: “Canada the Unloved!” The CDN S&P/TSX energy sub index was down 6.2% for the quarter. Digging deeper into the numbers however, the weakness was much worse. Excluding the pipelines and midstream companies from the energy sub index, the remaining 36 oil and gas producer and energy services providers dropped an average of 14 percent. It gets worse! The bottom 18 companies of the 36 dropped anywhere between 15-34%!

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The opinions expressed herein reflect those of the individual portfolio manager. These opinions are subject to change at any time based on market or other conditions, and Front Street Capital disclaims any responsibility to update such views. These opinions may differ from those of other portfolio managers or of Front Street Capital as a whole.

These views are for informational purposes only and are not intended to be a forecast of future events, a guarantee of future results or investment advice. All data referenced herein are from sources deemed to be reliable but cannot be guaranteed.

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If specific securities are referenced, they have been selected by the portfolio manager on an objective basis to illustrate the views expressed herein. Such references do not include all material information about such securities, including risks, and are not intended to be recommendations to take any action with respect to such securities. Referenced securities may not be representative of the portfolio manager's current or future investments and are subject to change at any time.