All eyes on Toronto as the Raptors go for the title on Monday night. Go Raptors! Nathan Phillips Square, Toronto, Ontario. Copyright © 2019 Felix Choo / dingobear photography. Picture available for licensing at Alamy Images. Photo may not be reproduced without permission.
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Hi, readers. Welcome to the 43rd update of the Peanut Power Rankings, which takes into account data current to June 7, 2019. To us, this is a bit of a milestone update because for the first time ever, we've expanded our rankings and rated all of the convertible debenture issues that are listed on our popular Peanut Big Board. This means almost twice as many ranked issues with 58 in this update. Furthermore, we've added "risk rating" column - this is just our opinion of the relative risk of each particular issue. As always, your mileage may vary.
Hopefully you find the changes and additions helpful. Thank you for continuing to read and support the Canadian Convertible Debentures Project.
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At this time, it might be prudent to re-hash some background for the Peanut Power Rankings. In a nutshell, the rankings are based on two main considerations: (1) a proprietary quantitative model I developed to help myself determine the "fair value" of a particular convertible debenture issue and (2) a qualitative judgment (based solely on my own humble opinion) on the particular issue, issuer, economic environment, interest rates, and other factors.
Ok, let's get to it. For Peanut Convertible Debentures Power Rankings, please click on the table below to read it larger. If you still find it too small to read, please download the PNG file, which then can be zoomed to a size that you prefer. For those who are looking to obtain a PDF or Excel version, please email us for more information; they can be made available for a small fee.
Important!: Like everything else on this website, content here is provided as information and opinions only and not intended to be a provision of investment advice or a recommendation of any investment action in any form. There is no guarantee, warranty, representation, or other assurance whatsoever on any of the information provided. Information and opinions reflect our views as of the date provided, but may change without notice. Investments made in convertible debentures are exposed to the risk of financial losses, and as with all disseminated information concerning investments, it is highly recommended that an individual consult with a qualified investment professional before making any investment decisions.
Market Commentary - Super Quick Points (June 7, 2019)
- Given a general shortage of available time over here, we will keep the market commentary more succinct than usual this time around.
- There's currently inversion in the Canadian bond yield curve between the shortest T-bill maturities and the 10-year bond. Somewhat paradoxically, Canadian economic data has been quite strong as of late, but given global trade concerns, the Bank of Canada is going to stay exactly where they are for the time being.
- Speaking of those global trade concerns: well, they're concerning. I'm going to note that NAFTA 2.0 is still not ratified yet, and Canada, Mexico, and the US (all allegedly allies, mind you), have been working on this for a couple of years now. In contrast, the US and China do not already have an existing trade deal, and are rivals. What are the odds we are going to quickly see a deal to quell the trade fears out there? My take: not likely.
- The stock market is holding its own however, though with more volatility. I can only presume market resilience is present because it feels that the Fed will step in with a rate cut to counter any kind of inane White House trade and/for fiscal policy. Let's call it a Powell Put. Will it be enough? The US will run headfirst into fiscal hurdles and debt ceilings as soon as this fall, and the fractured relationship between the White House and Congress will make deal-making difficult. And who knows how many new tariffs (which, by the way are a T-A-X tax, which domestic consumers will end up paying) will be slapped on by then.
- This all has the feel of the Republican administrations of the 1920's, and all know what happened in the 1929. And then the Depression that followed. And then the global conflict.
- Let's hope it doesn't go down that road again, we're all smarter now, right?
- We'll see. In the meantime, for our convertible debentures, the thinking is the same: emphasize higher credit quality and less speculative issues. Stay focused on the long-term and seek to protect your capital in case things get rocky in the second half of 2019. As they say, better safe than sorry.
Thank you for reading The Canadian Convertible Debentures Project. As always, if you have any comments, questions, or feedback about convertible debentures and/or this blog, please leave us a comment at the bottom of the page or email us at convertibledebs@gmail.com. Note it may take us a few days to get back to you depending on our schedules.
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