June Monthly Update

June 17, 2019 PI Financial QScore – June Monthly Update Highest PI QScore ranked companies Energy – Parex Resources, Parkland Fuel, Pembina Pipeline, Enerflex Ltd Materials – Kirkland Lake Gold, Largo Resources, Semafo, West Fraser Timber Industrials – Badger Daylighting, Toromont, Air Canada, Boyd Group, CP Rail Consumer Discretionary – BRP Inc, MTY Food Group, Dollarama Inc Consumer Staples – Empire Company, Premium Brands Healthcare – Sienna Senior Living Inc Financials – TD, Canadian Western Bank, Brookfield Business Partners, Manulife Infotech – Open Text, Enghouse Systems, CGI Inc. Telecom – Cogeco, Cogeco Communications Utilities – Superior Plus, Northland Power, Algonquin Power Inc Real Estate – Summit Industrial REIT, FirstService Corp, Colliers International The PI QScore is a multi-factor equity valuation tool designed to assist in the equity selection process and to enhance portfolio returns by ranking the most and least attractive companies within each sector. Our analytical process screens and ranks each company using a diverse list of about 40 financial, technical and accounting ratios and metrics categorized and ranked under four investment factor styles: Value, Financial Growth, Price Growth and Quality. Our Value factors include a range of ratios, such as price to earnings, price to book and price to sales. Quality and Credit factors include measures such as a company’s profitability, shareholder yield, leverage and free cash flow yield ratios. Price Growth or momentum factors reflect the company’s share price trend and the industry’s index price performance. Financial Growth factor includes various accounting measures highlighting a company’s past, current and forecasted revenue, cash flow and earnings growth. Our relative ranking system allows one to easily see how a company ranks among its peers and across all four investment styles. The final PI QScore combines all factor metrics together and tactically weights each of the four investment styles to provide a total relative score for each company within each sector. The PI QScore ranks companies that intersect the best of quality, growth and value. The PI QScore is in essence a variation of a GARP Score: Growth at a Reasonable Price (“GARP”) investing is a well-known investment strategy which attempts to combine growth and value investment styles. We recommend investors select a diversified group of companies from various industry sectors, factor styles and focus on companies within the top third highest positive PI QScores. June 17, 2019 PI QScore methodology The PI QScore quantitative process uses approximately 40 diverse financial, accounting and technical ratios or metrics within the 4 factor styles of Value, Quality, Financial Growth and Price Growth. A complete list of the factors used can be found in the appendix. Each factor metric has been evaluated to ensure it represents the sector’s preferred financial ratio and includes ratios which effectively reflect a company’s past and current financial record and future analyst estimates. Our universe includes about 250 Canadian companies listed on the Toronto Stock Exchange. To ensure data history and integrity, our list includes mostly mid to large capitalization companies. Those companies with a lack of consistent historic Thomson Eikon data or minimum number of analysts’ forecasts are excluded. For better sub-industry comparison purposes, some companies may be included in a sector that differs from the S&P TSX sector indices. Each company is ranked using a Z-Score calculation for each of the four investment styles. A Z-Score is a statistical measure of how many standard deviations a company’s score is above or below the mean score. For example, if a company has a Z-Score of zero for its Return on Equity (ROE), it means its profitability is the same as its industry’s mean ROE. A high positive Z-Score indicates that the company is much better than the sector average and a negative Z- score denotes a score worse than the sector average. Compared to a standard decile or percentage ranking methodology, Z-Score allows one to statistically measure the difference between companies. Depending on the metric, companies with higher Z-Scores generally denote companies with a competitive advantage over competitors and tend to significantly outperform lesser companies. The PI QScore combines and tactically weights all four investment style factor metrics to provide one total relative score for each company within each sector. The higher the PI QScore the better. The goal is to highlight companies with the most and least attractive overall financial and technical attributes within each sector. Bert Quattrociocchi, CFA | Michael Keyrouz, CFA | Dennis Rider, BBA June 17, 2019 PI QScore highlights PI QScore is meant to be one step in the equity selection process. Further industry and company analysis is recommended. The higher the positive PI QScore the better. Each sector style scores and PI QScores should be kept sector specific. A company’s PI QScore and individual style scores describe a company’s relative fundamental and technical characteristics. For example, a company with high Quality and Value scores but low Financial and Price scores describes a slower growing defensive company. It is important to review each PI QScore carefully as one factor style score may significantly impact the company’s overall score. PI QScore produces a relative not absolute score. Although companies with better relative fundamentals tend to outperform their peers, a lower score does not always mean a lesser company rather a company that currently has lower relative fundamentals. PI QScore is more highly weighted to a company’s most recent, current and next 12 month’s fundamental relative performance rather than a company’s long term record since short to mid-term fundamental changes have an outsized impact on equity performance. Style performance changes over time and there can be long periods of outperformance or underperformance by certain styles. For example, growth has consistently outperformed value since the financial crisis of 2008. For better comparative analysis, companies should be compared to their direct sub-industry peers not just sector e.g. gold companies with gold companies. PI QScore ranking allows one to select a single or a combination of style factors for a variety of different desired investment strategies e.g. Value + Quality for a more defensive portfolio. We recommend investors purchase a diversified group of companies from various industry sectors, factor styles and within the top third highest PI QScores and to avoid or limit those with very low PI QScores. Bert Quattrociocchi, CFA | Michael Keyrouz, CFA | Dennis Rider, BBA S&P|TSX Energy Equipment & Services Marketmillion) Cap ($ Price Close Quality & CreditValue Price GrowthFinancial Growth PI Qscore EFX.TO Enerflex Ltd 1,447 16.16 1.03 0.96 0.36 0.76 0.78 PSI.TO Pason Systems Inc 1,607 18.73 0.63 -1.36 1.25 0.95 0.37 SES.TO Secure Energy Services Inc 1,106 6.85 -0.53 0.45 -0.74 -0.70 -0.38 SCL.TO Shawcor Ltd 1,213 17.3 -1.13 -0.17 -0.87 -1.01 -0.79 S&P|TSX Energy Pipelines Marketmillion) Cap ($ Price Close Quality & CreditValue Price GrowthFinancial Growth PI Qscore PPL.TO Pembina Pipeline Corp 24,514 47.98 1.40 -0.74 0.50 1.36 0.63 GEI.TO Gibson Energy Inc 3,224 22.18 0.90 -0.59 1.10 0.35 0.44 KEY.TO Keyera Corp 6,930 32.63 -1.21 0.13 0.13 0.65 -0.08 TRP.TO TC Energy Corp 60,511 65.52 -0.68 -1.24 1.04 0.27 -0.15 IPL.TO Inter Pipeline Ltd 8,164 20 -0.60 1.51 -0.81 -1.19 -0.27 KML.TO Kinder Morgan Canada Ltd 1,350 11.62 0.82 1.10 -1.64 -1.46 -0.29 ENB.TO Enbridge Inc 92,610 45.76 -0.53 -0.25 -0.30 -0.15 -0.31 PI QScore - Energy 1 6/17/2019 S&P|TSX Energy Oil, Gas & Consumable Fuels Market Cap ($Price million) Close Quality & CreditValue Price GrowthFinancial Growth PI Qscore PXT.TO Parex Resources Inc 2,951 20.18 1.74 0.38 0.89 1.92 1.23 PKI.TO Parkland Fuel Corp 6,089 41.61 0.47 0.28 2.02 1.93 1.17 CNQ.TO Canadian Natural Resources Ltd 42,545 35.58 1.08 0.20 0.69 0.29 0.57 SU.TO Suncor Energy Inc 64,722 41.31 1.19 0.14 0.73 0.12 0.54 IMO.TO Imperial Oil Ltd 27,775 35.95 1.25 -0.02 0.75 -0.04 0.49 FEC.TO Frontera Energy Corp 1,314 13.39 0.41 0.84 0.82 -0.24 0.45 WCP.TO Whitecap Resources Inc 1,742 4.22 0.24 0.89 -0.48 0.87 0.38 ERF.TO Enerplus Corp 2,124 9.07 0.88 0.13 -0.38 0.65 0.32 PPL.TO Pembina Pipeline Corp 24,514 47.98 0.80 -1.19 1.34 0.14 0.27 HSE.TO Husky Energy Inc 12,856 12.79 0.42 0.67 0.28 -0.40 0.24 VET.TO Vermilion Energy Inc 4,137 27.06 0.08 0.53 -0.30 0.29 0.15 CVE.TO Cenovus Energy Inc 13,774 11.21 0.33 -0.43 0.82 -0.28 0.11 KEL.TO Kelt Exploration Ltd 710 3.86 -0.57 0.26 -0.90 1.52 0.08 TOU.TO Tourmaline Oil Corp 4,328 15.91 0.34 0.49 -0.36 -0.41 0.01 TRP.TO TC Energy Corp 60,511 65.52 0.11 -1.64 1.67 -0.25 -0.03 TOG.TO TORC Oil & Gas Ltd 866 3.97 -1.04 0.79 -0.17 0.31 -0.03 ARX.TO ARC Resources Ltd 2,399 6.78 -0.19 0.81 -0.75 -0.27 -0.10 POU.TO Paramount Resources Ltd 805 6.16 -0.18 0.40 -1.27 0.62 -0.11 ECA.TO Encana Corp 9,511 6.58 -1.42 0.41 -1.06 1.07 -0.25 VII.TO Seven Generations Energy Ltd 2,332 6.6 0.41 0.60 -1.30 -0.87 -0.29 FRU.TO Freehold Royalties Ltd 975 8.23 0.01 -0.89 0.27 -0.70 -0.33 MEG.TO MEG Energy Corp 1,520 5.12 -1.56 0.09 0.54 -0.69 -0.40 BTE.TO Baytex Energy Corp 1,119 2.01 -1.68 0.55 -0.77 0.06 -0.46 CPG.TO Crescent Point Energy Corp 2,189 4 -1.36 0.61 -0.74 -1.53 -0.75 NVA.TO Nuvista Energy Ltd 567 2.52 -2.53 0.51 -1.76 0.71 -0.77 PSK.TO Prairiesky Royalty Ltd 4,074 17.43 0.48 -2.92 0.14 -0.79

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