Benj Gallander, President, Contra the Heard Investment Letter

FOCUS: Contrarian Investing

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MARKET OUTLOOK:

While markets are not outrageously priced, certainly they are far more expensive than they have been in years. That indicates that this is a good time to take some profits on companies that have had strong gains, where the risk-reward ratio is no longer as attractive.

Top Picks:

United Security Bancshares (USBI.O) – ($8.32 – 2015) This small Alabama-based bank pays a dividend of $0.02. At one point it paid as high as $0.41. The current stock price is under $10 but it used to trade above $30 and further recovery is likely. Initial Sell Target: $23.44

Alacer Gold Corp. (ASR.TO) – ($2.01 – 2014) Alacer has $311 million in the till and has signed a $350 financing for the expansion of the Çöpler Gold Project in Turkey. Meanwhile profit this quarter was better than $12 million. Initial Sell Target: $6.41

Aegon (AEG.N) – ($7.64 – 2014) Aegon is a huge Dutch insurance company with operations in numerous countries. It has been hit by Brexit and low interest rates but has tremendous recovery potential. It has traded near $60 in the past. Initial Sell Target: $20.34

Past Picks: August 4, 2015

Extendicare (EXE.TO)

• Then: $8.68
• Now: $8.18
• Return: -5.76%
• TR: -0.45%

Rona (RON.TO)

• Then: $15.57
• Now: $23.99
• Return: +54.07%
• TR: +55.28%

United Security Bancshares (USBI.O) 

• Then: $8.80
• Now: $9.15
• Return: +3.97%
• TR: +4.93%

Total Return Average: +19.92%

Website: www.contratheheard.com