Benj Gallander, president of Contra The Heard Investment Letter
Focus: Contrarian investing

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MARKET OUTLOOK

I predicted in January that markets would become far more volatile and that has come to pass. This will continue as long as The Donald keeps active in the Twitterverse, which he almost assuredly will. At the same time, there will be many other factors at play including Brexit, trade and tariffs, missiles flying hither and yon, and the heightened Russian-American frostiness. This will offer traders a better opportunity to profit, albeit the majority will still lose money.

TOP PICKS

Benj Gallander's Top Picks

Benj Gallander, president of Contra The Heard Investment Letter, shares his top picks: GMP Capital, Obsidian Energy and Cathedral Energy.

GMP CAPITAL (GMP.TO) 2017 - $3.32

GMP surprised with a dividend this quarter, indicating that things are looking better. This isn’t unexpected with the company’s push into the cybercurrency and marijuana spaces, arguably the two fastest growing in Canada. Plus, with commodity prices elevating along with oil and gas, this company should see revenues handily increase. This could be a comeback year for this enterprise that has struggled to be sure.

OBSIDIAN ENERGY (OBE.TO) 2014 - $4.01

Obsidian is undergoing major changes. The proposed three-for-one share consolidation has been deferred. Peace River and Viking assets are now on the block and it isn’t out of the question that the whole company will be sold. If that comes to pass, it could be at a significant premium. Fortunately management at Obsidian and the key parties at activist FrontFour Capital have reached a peace agreement, which means that millions won’t be spent in battle, with the latter placing two people on the board of directors.

CATHEDRAL ENERGY (CET.TO) 2014-2017 - $4.11

Cathedral’s revenue of $147 million was up 82 per cent from 2016. The drill rig count increased handily along with prices for the rigs. The company has a very clean balance sheet and recognizes the importance of limiting debt after a financial meltdown and a flirt with bankruptcy.

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
GMP Y N Y
OBE Y N Y
CET Y N Y

 

PAST PICKS: APRIL 3, 2017

Benj Gallander's Past Picks

Benj Gallander, president of Contra The Heard Investment Letter, reviews his past picks: Wi-Lan (now Quaterhill); BlackBerry; and CDI (acquired by AE Industrial in September 2017).

 WI-LAN (WIN.TO) – QUARTERHILL (QTRH.TO)

  • Then: $2.55
  • Now: $1.96
  • Return: -23%
  • Total return: -21%

BLACKBERRY (BB.TO)

  • Then: $10.45
  • Now: $13.52
  • Return: 29%
  • Total return: 29%

CDI (CDI.N) - Taken over by AE Industrial on Sep. 12.

  • Then: $8.25
  • Sep. 12, 2017: $8.20
  • Return: -0.60%
  • Total return: -0.60%

Total return average: 2%

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
QTRH Y N Y
BB Y N Y
CDI N N N

 

FUND PROFILE

President’s Portfolio Contra the Heard

  • 1 year return: 9.7%
  • 5 year annualized return: 22.5%
  • 15 year annualized return: 16.7%

*Not based on reinvested dividends and net of fees.

TOP 5 HOLDINGS AND WEIGHTINGS

  1. First United Corp: 12.8%
  2. Bank of America: 11,5%
  3. ATS Automation: 10.1%
  4. GSE Systems: 9.2%
  5. First U.S. Bancshares: 6.4%

TWITTER: @BenjContra
WEBSITE: www.contratheheard.com