Advances in valuation slowed in March to just 3.3 points in LargeCap and 2.4 points for the overall market. Smallcap retreated back closer to fair value giving up 1.4 points. All categories are well within fair value range at the end of the 1st quarter. We now have a 10.8 point spread between the highest valuation, MidCap at 116.0% Fv and the lowest, Smallcap at 105.2% Fv.
The Canadian market is slightly under fair value (100.0% FV) at 98.79%, but well within what is considered a fair value trading range (80.0% to 130.0% Fv). There are 7 sectors considered to have a relative valuation that is slightly undervalued and 4 sectors that are slightly overvalued. The highest relative valuation goes to Utilities at 104.49% FV. The most undervalued sector is Energy at 93.28% Fv. You can see the full table under the menu item: Client Services > World Markets > Americas
The market centroids plot are the most interesting this month. Four sectors have made significant moves. Industrials has moved across the vertical divide and now resides on the left toward undervaluation while maintaining the same level of year-to-date return. Financials has also moved further undervalued, especially Banks at 93.2$ Fv. Health Care has also joined the crowd on that side of the divide while pulling the median closer to fair value with a higher return. This is a good overall relative directional movement that we hope continues.
The Canadian Fair Value analysis includes 212 securities that cover the entire market (Large, Mid and SmallCap) and all 11 GIC sectors.
Currently, the Canadian market is at Fair Value (99,53% Fv). All 11 sectors are trading within the Fair Value range (80.0% Fv to 130.0% Fv).
The market benefited from the 4th quarter “adjustment”. Markets have returned to earlier pricing levels with improved relative valuations. The total market has a better valuation, fair rather than overvaluation, at the same pricing level of mid-2018.
This is the first published run of the Canadian Fair Value Report 2019 February – Preliminary. Consider it a Beta Test Draft. There could be errors, mistakes and omissions in the report. Please use caution. Do not use this report for anything except casual review.
This is a NEW report from ISN that covers the French market. Fair values are calculated along with targets for Overvaluation and Undervaluation and the traditional percent current prices represent of fair value. This report will soon appear under the World Markets menu.
This is a NEW report from ISN that covers the British market. Fair values are calculated along with targets for Overvaluation and Undervaluation and the traditional percent current prices represent of fair value. This report will soon appear under the World Markets menu.
The markets made some large-scale changes in character that started early in 2018, built up throughout the year and changed direction in the 4th quarter. Valuations increased throughout 2018 moving well into overvaluation and adjusted back to fair value in the 4th quarter of 2018. Several market areas moved past fair value neutral (100% Fv) and on to the undervalued side. All of the markets have returned to the overvalued side of neutral fair value but remain well within fair value range.