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LEASIDE STOCK INDEX

Leaside stock index 2014 YTD through April 30, 2014Montreal-based Jacob is a women’s fashion retailer catering to the middle market. In early May it announced it’s closing its doors after 35 years in business. Apparently it can’t cut it in Canada’s über competitive retail marketplace.

The challenges facing Canadian retailers today are many, not the least of which is competition from the likes of Walmart and Target.

The world’s largest retailer (Walmart) is expected in Leaside late in 2015 when it will open an 80,000-square-foot store in the Smart Centre expansion on the north side of Wicksteed Ave.

While Walmart isn’t currently a component of the Leaside Stock Index, it could be once the store opens for business in 18 months.

However, since the S&P 500 bottomed out on March 9, 2009, Walmart’s stock has badly  underperformed — up 90 percent through the end of April compared with 208 percent for the benchmark index — so I’d be very hesitant to add it to the mix, especially when you consider that I’d have to remove something else to make room for it.

The only possibility at this point would be Best Buy, which is down 34 percent year-to-date, but a lot can happen in a year and a half so I’ll reserve judgement until then.

Besides, there are already enough retailers (half of the 20 stocks) in the Leaside index and most are very good at what they do.

Ironically, it was the Canadian retailers that made the most noise in April with Dollarama (DOL.TO) jumping 8.2 percent on the month to get it into positive territory, up 3.3 percent through the first four months of the year.

Other Canadian retailers that bettered the 2.4 percent gain achieved by the S&P/TSX Capped Composite Index Fund (XIC.TO) in April include Empire Company (Sobeys) (EMP-A.TO) up 2.5 percent, Canadian Tire (CTC-A.TO) up 3.3 percent and Alimentation Couche-Tard (Mac’s) (ATD-B.TO) up 3.7 percent.

As has been the norm since
putting the LSI together in February, the Canadian stocks continue to run circles around their American brethren. Through the first four months of the year the 10 Canadian stocks have gained 5.3 percent while the 10 American stocks have lost 9.5 percent, which includes almost four percentage points of gains due to the currency exchange.

Excluding currency, Uncle Sam’s stocks are off double digits on the year with no sign of recovery on the horizon. That said there’s still eight months left in 2014. Plenty can happen between now and the end of December to change this picture.

Finishing on a positive note, I’d like to highlight the three stocks that have kept the index’s losses from getting out of hand in 2014. All three are Canadian. In order of return they are Alimentation Couche-Tard, Loblaws (L.TO) and RioCan (REI-UN.TO), up 16.0 percent, 12.4 percent and 9.8 percent respectively. Congratulations if you own any of these stocks. As I said in last month’s issue, I expect this trend to continue for the remainder of the year.

Oh Canada!