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Mawer Canadian Equity Fund Buys 2 New Stocks in 2nd Quarter

- By Sydnee Gatewood

The Mawer Canadian Equity Fund (Trades, Portfolio) disclosed in a second-quarter portfolio update this week it purchased two new stocks and increased several other holdings by at least 30%.


Managed by Jim Hall and Vijay Viswanathan, the fund invests in large-cap Canadian companies with the potential for long-term, above-average growth. The current portfolio of 44 holdings is mainly composed of financial services stocks, which represent 30.7% of the portfolio.

The fund established positions in The Descartes Systems Group Inc. (DSG.TO) and Trisura Group Ltd. (TSU.TO).

Descartes Systems

In its largest trade for the quarter, the fund purchased 518,200 shares of Descartes Systems for an average price of 32.06 Canadian dollars ($26.32) per share, giving it 0.63% portfolio space.

The logistics technology provider has a market cap of 2.57 billion Canadian dollars; its shares were trading around 33.85 Canadian dollars on Thursday with a price-earnings (P/E) ratio of 75.84, a price-book (P/B) ratio of 4.47 and a price-sales (P/S) ratio of 9.21.

The Peter Lynch chart below shows the stock is trading above its fair value. The company does not pay a dividend.

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GuruFocus ranked the company's financial strength 9 of 10 and its profitability and growth 8 of 10.

With 1.33% of outstanding shares, the Mawer New Canada Fund (Trades, Portfolio) has the largest position in Descartes Systems among the gurus.

Trisura Group

For its second new position, the fund bought 12,544 shares of Trisura Group for an average price of 21.83 Canadian dollars per share, expanding the portfolio 0.01%.

The insurance company, which was spun off from Brookfield Asset Management Inc. (TSX:BAM.A) in June, has a market cap of 145.62 million Canadian dollars; its shares were trading around 25.05 Canadian dollars on Thursday.

The trend in the stock's price since its debut is illustrated in the graph below.

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GuruFocus ranked Trisura's financial strength 4 of 10 and its profitability and growth 2 of 10. The company does not pay a dividend.

The fund holds 0.22% of the company's outstanding shares. The Leith Wheeler Canadian Equity (Trades, Portfolio) Fund is the only other guru shareholder with 0.19% of shares.

During the quarter, the fund increased its holdings in Suncor Energy Inc. (SU.TO), Canadian Natural Resources Ltd. (CNQ.TO) and BCE Inc. (BCE.TO).

Suncor Energy

The fund purchased 412,977 shares of Suncor for an average price of 41.36 Canadian dollars, expanding the holding by 38.09%.

The integrated energy company has a market cap of 67.95 billion Canadian dollars; its shares were trading around 40.95 Canadian dollars on Thursday with a P/E ratio of 24.78, a P/B ratio of 1.5 and a P/S ratio of 2.22.

According to the Peter Lynch chart below, the stock is trading above its fair value.

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GuruFocus ranked the company's financial strength 5 of 10 and its profitability and growth 5 of 10. The company's trailing dividend yield is 3.05%, and its forward dividend yield is 3.13%. The dividend payout ratio is 74%.

With 0.09% of outstanding shares, Mawer is the company's largest guru shareholder. The Signature Select Canadian Fund (Trades, Portfolio) also owns the stock.

Canadian Natural Resources

The fund bought 380,300 shares of Canadian Natural Resources for an average price of 41.36 Canadian dollars, expanding the holding by 35.03%.

The oil and gas producer has a market cap of 48.88 billion Canadian dollars; its shares were trading around 40.22 Canadian dollars on Thursday with a P/E ratio of 29.15, a P/B ratio of 1.56 and a P/S ratio of 3.17.

Based on the Peter Lynch chart below, the stock appears to be trading above its fair value.

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GuruFocus ranked the company's financial strength 4 of 10 and its profitability and growth 5 of 10. The company's trailing dividend yield is 2.56%, and its forward dividend yield is 2.73%. The dividend payout ratio is 75%.

Leith Wheeler Canadian Equity is the company's largest guru shareholder with 0.14% of outstanding shares. The Signature Select Canadian Fund also holds the stock.

BCE

The fund increased its BCE holding by 42.06%, buying 241,313 shares for an average price of 60.59 Canadian dollars per share.

The telecommunication company has a market cap of 52.45 billion Canadian dollars; its shares were trading around 58.25 Canadian dollars on Thursday with a P/E ratio of 18.08, a P/B ratio of 3.58 and a P/S ratio of 2.32.

According to the Peter Lynch chart below, the stock is trading slightly above its fair value.

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GuruFocus ranked the company's financial strength 4 of 10 and its profitability and growth 5 of 10. The company's trailing dividend yield is 4.81%, and its forward dividend yield is 4.93%. The dividend payout ratio is 86%.

The fund has the largest holding among the gurus with 0.09% of outstanding shares. The Signature Select Canadian Fund also has a position.

The fund also added to its positions in Royal Bank of Canada (TSX:BY), PrairieSky Royalty Ltd. (PSK.TO), Richelieu Hardware Ltd. (RCH.TO), TMX Group Ltd. (TSX:X), Hydro One Ltd. (TSX:H) and several others during the quarter.

Disclosure: I do not own any stocks mentioned.

This article first appeared on GuruFocus.