One of the challenges of maintaining a concentrated portfolio is that it can be undermined by one bum stock. That was certainly top of mind earlier this year when Home Capital Group, one of our 14 All-Star stocks, suddenly sputtering.
But with a timely investment from Warren Buffett a shake-up of the executive ranks and time to recover the damage to our All-Star portfolio was muted. Home Capital still ended up being a drag on the overall performance of our All-Star stocks, but overall our picks still topped the S&P/TSX Composite. This year’s team of All-Stars produced a total return of 16.4% versus 10.2% iShares Core S&P/TSX Capped Composite Index ETF (XIC).
FairFax Financial was the only other stock on our All-Star list that closed out the year in negative territory. Of the 14 companies on our list, almost all of them finished with double digit returns. More than a third of the total returns of the stocks we identified finished up 20% or more on the year.
To find our top performer you have to zero in on the auto sector. Shares of Auto-part maker Martinrea rose by more than 50% since last October. Linamar, which operates in the same sector, was a close second.
As part of this report MoneySense also identifies the top growth and value stocks in Canada. Of these two groups, the value stocks were the outperformers. As a group these stocks had a total return of 18.5%—and that’s despite Home Capital presence in the portfolio. Out of the 20 stocks in this portfolio, 75% produced double digit total returns including three companies that topped 50%.
While the growth stocks lagged our All-Stars and value stocks, they still put up a respectable total return of 13.3%. The top performer in this group was Premium Brands with at 62.8% total return.