Héroux-Devtek pushes Gazette portfolio past $800,000

Nine holdings advanced in that time, with Héroux-Devtek rising the most

October was a month of extremes in the stock market, but the Montreal Gazette portfolio weathered it well, gaining 1.1 per cent to climb back over the $800,000 mark.

Considering that the basket of 15 Quebec-based stocks had little representation in two of the four Toronto Stock Exchange sectors (energy and utilities) that carried the TSX to a gain of 0.6 per cent last month, manager Christine Décarie was pleased with the performance.

“It was an interesting month. Stock selection was key. We had some good winners and some big losers,” she said.

Nine of the portfolio’s holdings advanced in October, while six slipped.

The biggest gain came from aerospace equipment maker HérouxDevtek, up 10 per cent.

“Their quarterly numbers were OK, not extraordinary,” Décarie said. “I don’t think the move owed to any specific news. What’s happened is that the aerospace sector is going through a bit of a rebound, after weakening in the summer.”

Insurer Industrial Alliance, a 2016 addition to the portfolio, continued its upward push with a rise of 9.97 per cent.

“It’s a well-managed company. The stock had been a bit of a laggard compared to other insurers, that’s one of the reasons we thought it was attractive, and now they’ve delivered a couple of good quarters. But the stock is not as cheap as it was initially and it’s not one I’d chase now,” Décarie said.

The portfolio’s worst performers last month were communications company Québecor and auto-parts distributor Uni- Select, both down more than five per cent, and steel fabricator Canam Group, which plunged 10.3 per cent.

“They all disappointed a bit, but not to a degree that explained the drop in the stock price,” Décarie said. “Québecor’s quarter was not that bad. Its wireless numbers were actually very good. With UniSelect, some people are worried about its organic growth. I’m not.”

Shares of Canam have been depressed since July, when it announced it was taking a $32-million hit because of revised cost estimates on one unnamed project.

“Canam takes a bit more intestinal fortitude,” Décarie said, “but I still like the management team and I’m not selling. All the news from that contract probably has been washed out by now. Within the context of a balanced portfolio, if you don’t own any, now might not be a bad time to dip your foot in the water. Just be aware there might be more disappointment ahead.”

Décarie, who under the rules of the portfolio can make trades only at the end of the month, elected to sit pat in October.

Launched in October of 1997 with an imaginary $100,000, the portfolio entered its 19th year worth $806,461.