Veritas Recommendation System
What Buy, Reduce and Sell Mean
Our recommendation system has three tiers:
• Buy: Expected to generate a meaningful positive return or outperform our analyst’s sector coverage over the next 12 months.
• Reduce: Expected to underperform our analyst's sector coverage over that time.
• Sell: Expected to generate a meaningful negative return.
While other firms may tell you to Buy or Hold 90% of the time, our recommendations can be roughly balanced between Buy or Reduce/Sell at any given time. Our track record proves this works.
Performance of our Buy and Sell calls in time periods after making the call
Source: Veritas Investment Research Corp. estimates. Performance for selected time periods (30, 60, 90, 180 and 360 days) averages the total return of individual calls relative to the S&P/TSX index over the period from their initiation date to the end of each time horizon. Only calls that extended through the full time horizon are included. Sell recommendations include Reduce recommendations when Reduces were added to our rating system in 2021. Returns greater than 1-year are presented as compound annual growth rates.
V-List Model Portfolio
What is the V-List?
Veritas' track record is measured through our V-List, a model portfolio that has outperformed the S&P/TSX Composite Index by 321 basis points (as of March 31, 2024, from inception on October 31, 2004).
The V-List is a concentrated portfolio of 12 to 25 companies recommended by Veritas Investment Research as the best investment opportunities drawn from our firm’s research.
Stocks are selected based on their liquidity, lower volatility and potential for long-term capital appreciation, using bottom-up fundamental analysis and a strict review of accounting and disclosure practices to identify companies with defensible competitive advantages and the ability to generate meaningful cash flow.
V-List Model Portfolio vs S&P/TSX Index Since 2004 Inception
Returns greater than 1-year are presented as compound annual growth rates.
“Our level of due diligence is deeper. Our analysts cover fewer names, and they spend more time looking at the details associated with those names.”
– Anthony Scilipoti, President and CEO
“Our companies generate more cash, so they can either directly return more cash to investors, or if they’re in growth industries, they can invest in growth.”
– Darryl McCoubrey, Head of Research
You can subscribe to the V-List.
Contact our Sales Team to discuss your equity research needs.
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Our Long-Term Buy, Sell and V-List Performance
Veritas Sells underperformed by 4.46% CAGR
Veritas Buys outperformed by 3.54% CAGR
V-List Buys outperformed by 3.21% CAGR
Explanation:
An equal-weighted portfolio of Veritas Sells would have underperformed the S&P/TSX index by a compound annual growth rate of 4.46%.
An equal-weighted portfolio of Veritas Buys would have outperformed the S&P/TSX index by a compound annual growth rate of 3.54%.
Our model V-List portfolio has outperformed the S&P/TSX index by a compound annual growth rate of 3.21% since inception (Oct. 31, 2004).
March 25, 1999 to March 31, 2024
Returns are calculated using model portfolios that include all Veritas calls in each category (Buys/Sells//V-List). Veritas Buy and Sell returns reflect equal-weighted portfolios that are rebalanced each month and on dates where recommendations change. Sell recommendations include Reduce recommendations when Reduces were added to our rating system in 2021. V-List portfolio returns reflect published weighting changes and recommendation dates, rebalanced monthly and on recommendation changes. CAGR = Compound Annual Growth Rate Returns for each rating and the benchmark includes dividends. All our calls are backed by published research that is available to our clients. Source: Bloomberg dates, Veritas Investment Research
V-List 2024: Outlook and Positioning - April Update
With Darryl McCoubrey
In this video, Darryl McCoubrey, our Head of Research and member of our V-List Committee, discusses the V-List's performance in 2024 and updates its positioning as of April.
He discusses:
- What is the V-List? The V-List is a concentrated, equally-weighted, model portfolio of 12 to 25 companies recommended by the team at Veritas Investment Research as our best investment opportunities drawn from our names under coverage. Names are chosen based on bottom-up fundament research and we scrutinize the accounting and disclosure. The V-List has low turnover, is sector agnostic and focuses on larger-cap, liquid names.
- Performance: As of the end of March, the V-List is up 5.16% in 2024, but it is underperforming the S&P/TSX composite total return index by 146 basis points. However, it continues to outperform over longer periods, including 321 basis points from inception in 2004 to the end of March.
- Risk: "We have a pretty good concentration of lower-risk and income-focused names," Darryl said. "Those themes don't tend to do well if the idea of higher interest rates for longer settles in." However, in light of the economic weakness we see emerging, we still favour dividend-paying companies with good balance sheets that can continue to grow their dividend. We also favour companies that are selling essential services, such as groceries, utilities and even telcos. These companies tend to outperform in times when the market is seeking to avoid risk.
- Sector allocations: The V-List continues to be weighted towards defensive sectors but with a little more risk than a quarter or two ago.
"We have an exceptional track record of outperforming the TSX benchmark. That's driven by our focus on high-quality, strong balance sheet companies that are fundamentally resilient and less exposed to volatility and risk."
– Nigel D'Souza, Senior Analyst Financial Services
"We believe interest rates are going to remain sticky, that is that they remain higher than what people expect, and that's going to create an environment where stock selection becomes more important."
– Anthony Scilipoti, President and CEO