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

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MARKET OUTLOOK

I expect the stock market to have a minimum of a 20 per cent plunge and likely much more before the end of 2020. It could very easily commence before the end of this year. People with big winners might think of selling. There will likely be much better opportunities available to buy stocks going forward than now.

TOP PICKS

QUARTERHILL (QTRH.TO)
Last bought in 2016 at $1.98.

This company has next to zero long-term debt and over $70 million in the bank with which to continue its turnaround. It has transitioned from a one-trick patent pony to a more diversified enterprise, focused on growth.

ALACER GOLD (ASR.TO)
Last bought in 2014 at $2.01.

The development of the oxide plant is coming in on time and under budget, with all-in sustaining costs (AISC) expected to be between $650 and $700 per ounce. It should start up this quarter. The company has $163 million in the bank, a debt load of $350 million and is profitable.

GMP CAPITAL (GMP.TO)
Last bought in 2017 at $3.32.

The consolidation of this sector appears to make Richardson GMP more valuable and more likely to be sold. Plus, as compared to a couple of years ago, GMP can get revenue not only from commodities, but oil and gas, marijuana and blockchain.

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
QTRH Y N Y
ASR Y N Y
GMP Y N Y

 

PAST PICK UPDATES

SOLD: FREDS INC

  • Buy price: $1.56 in May
  • Sell/reduce price: Sold 40% at $2.29.

Given the uncertainty surrounding both this stock and markets, it seemed worthwhile to take 40 per cent of the position off the table after less than two months for a gain of 47 per cent.

SOLD: BLACK BOX

  • Buy price: $3.60
  • Sell/reduce price: $1.88 (sold 100%)

The company has stated that it might not be able to operate through the end of 2018 and could face liquidation or bankruptcy.

PAST PICKS: SEP. 26, 2017

BLACKBERRY (BB.TO)

  • Then: $11.29
  • Now: $12.72
  • Return: 13%
  • Total return: 13%

AEGON (AEG.N)

  • Then: $5.77
  • Now: $6.29
  • Return: 9%
  • Total return: 12%

QUARTERHILL (QTRH.TO)

  • Then: $1.66
  • Now: $1.79
  • Return: 8%
  • Total return: 10%

Total return average: 12%

 

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

 

FUND PROFILE

Contra the Heard President’s Portfolio

  • 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. ATS Automation: 11.6%
  2. Bank of America: 11.6%
  3. First United Corp: 9.6%
  4. GSE Systems: 9.3%
  5. First US Bancshares: 6.8%

COMPANY TWITTER: @ContratheHeard
PERSONAL TWITTER: @benjcontra
WEBSITE: www.contratheheard.com