CIBC analyst prefers TSX to S&P 500 and likes these ten stocks

Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow

CIBC analyst Sid Mokhtari prefers the TSX to the S&P 500 and offered ten domestic stock ideas to play the theme. His matrix method includes dividend yield, relative strength index, and momentum factors,

“Our TSX matrix-factors were collectively recording better rates of change in their monthly and quarterly prints relative to the SPX factors – often associated with stronger trend characteristics. Our preference for the TSX index has been reinforced with the October prints again being stronger in many of our matrix-factors relative to those for the SPX, with 164 bps of relative outperformance – TSX returned +0.65% versus SPX at -0.99% … In addition to our preference for the better-yielding TSX constituents (two times the SPX members), we find the heavier composition of the technology sector in the SPX to be challenging in the near term … Our top-10 best ideas for the month of October produced +0.69% in absolute, slightly above the TSX by 4 bps. Year to date, our matrix-process has returned 22.75% (749 bps of Alpha against the TSX and 245 bps against the SPX). Comparatively, year to date, the TSX and SPX have returned 15.74% and 20.30%, respectively.”