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Adding 3 Names From Canada's Brandes All-Cap Fund
Reaching the halfway point of TSX, TSX Venture names in coverage
By Will Ashworth
With today’s installment, we reach the halfway point for the 30 TSX and TSX Venture stocks I will cover over the next few months, well into 2025.
Today’s three are from the Brandes Canadian Equity Fund Series A, an actively managed, all-cap fund that invests nearly 70% of its net assets in Canadian equities. Small caps account for 43% of the fund and the average market cap is $5.54 billion.
Happy Investing.
Rogers Communications (RCI.B)
Rogers Communications (TSX:RCI.B) is Canada’s leading wireless and cable provider, with a market cap of $27.45 billion. While I’ve committed to stocks between $100 million and $10 billion, I’ve decided to include Rogers because I don’t believe there is a small communication services stock on the TSX that’s worth considering.
The company recently made news for purchasing BCE’s (TSX:BCE) 37.5% interest in Maple Leaf Sports & Entertainment (MLSE) for $4.7 billion. As a result of the purchase, it now owns 75% of the sports conglomerate that owns both the NHL’s Toronto Maple Leafs and the NBA’s Toronto Raptors. Rogers intends to buy MLSE Chairman Larry Tanenbaum’s 20% interest by 2026.
To help pay for the acquisition, Rogers announced that it would sell a minority of its cellphone infrastructure business to Blackstone (NYSE:BX) for $7 billion.
“We maintain control, we de-lever and the impact on our free cash flow and ability to continue to invest in our business carries on unrestricted by this transaction,” the Globe and Mail reported CFO Glen Brandt’s comments about the deal.
Rogers has more moves on the MLSE front that could add significant value for shareholders in the future. That alone makes it an attractive long-term investment.
Equally important, the communications services sector is now on the board.
Lassonde Industries (LAS.A)
Lassonde Industries (TSX:LAS.A) is one of Canada's leading makers of fruit and vegetable beverages. Its brands include Everfresh, Fairless, Graves, Oasis, and Rougemont. The company has a market cap of $1.2 billion.
The Quebec company's history dates back to 1918, when Aristide Lassonde founded it in Rougemont, Quebec. It started as a vegetable canner and became involved in apple juice under the Rougemont label in 1959. In 1979, Lassonde launched the Oasis brand.
Eight years later, it went public on the Montreal Stock Exchange. A decade later, it made inroads into the U.S. juice market, primarily in New England. Today, it has 23 facilities in the U.S. and Canada. In 2023, it generated $2.31 billion in sales.
Brandes is a value investor, so, unsurprisingly, Lassonde is one of its fund’s holdings. Its shares are flat over the past five years. With a healthy 2.3% dividend yield, LAS.A stock is an excellent dividend investor’s value play.
Canfor (CFP)
Canfor (TSX:CFP) produces lumber, engineered wood products, pulp, and paper. It also converts sawmill residues into sustainable wood pellets, providing clean energy to customers worldwide. It has a market cap of $2.02 billion.
Its pellet facility in Houston, B.C., is owned and operated in partnership with Pinnacle Pellet Inc. and the Moricetown Indian Band. It produces 217,000 tonnes of industrial wood pellets each year. It operates two other pellet facilities in British Columbia in partnership with the Pacific Bioenergy Corp. They produce 175,000 tonnes annually.
The company’s B.C. lumber operations face several headwinds. These include limited access to economic fiber, weak lumber prices, rising operating costs, increased tariffs, and regulatory issues. As a result, its third-quarter results included a $350 million operating loss due to asset write-downs and impairment charges.
Patient capital should be rewarded, but it’s going to take time.
Until next time.
Disclaimer: The author did not hold a position in any of the securities mentioned above. The information provided in this article is for educational and informational purposes only and should not be construed as investment advice. Always conduct your own research or consult with a licensed financial professional before making any investment decisions. Past performance is not indicative of future results.