Benj Gallander, president of Contra The Heard Investment Letter

Focus: Contrarian investing

MARKET OUTLOOK

Debt is the devil to the stock market and it is seemingly omnipresent. Unfortunately it has been growing during good economic times. With interest rates still near record lows, governments have limited tools to fight the upcoming recession. Brexit, trade wars, income inequality and Donald Trump will all be major factors in 2019.

TOP PICKS

QUARTERHILL (QTRH.TO)

Last purchased in 2016 at $1.98.

The company won a lawsuit for $145 million against Apple that is being appealed. If the award is collected, it will help this enterprise immensely. Quarterhill has about $57 million cash, nominal debt and trades at a large discount to book value. It also pays a dividend of about 4 per cent.

Initial sell target: $4.94.

INNODATA (INOD.OQ) 

Last purchased in 2015 at $2.21.

The company is looking at strategic alternatives and one option on the table is that the company gets sold. If it happens, it will likely sell at more than $2.00. The enterprise has a spikey chart and tends to jump in price every few years. It appears overdue.

Initial sell target: $6.74.

GMP CAPITAL (GMP.TO)

Last purchased in 2017 at $3.32.

As compared to a couple of years ago when the enterprise only managed money by Richardson Securities and raised money for corporations in the commodity sector, it is now also involved in the oil and gas, cryptocurrencies and marijuana spaces. Recently a dividend was reintroduced which pays about 5.5 per cent. This stock used to trade in the double digits.
 

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

PAST PICKS: DEC. 8, 2017

AEGON (AEG.N)

  • Then: $6.19        
  • Now: $4.47        
  • Return: -28%     
  • Total return: -24%

CATHEDRAL ENERGY (CET.TO)

  • Then: $1.87        
  • Now: $0.73        
  • Return: -61%     
  • Total return: -61%

QUARTERHILL (QTRH.TO)

  • Then: $2.15        
  • Now: $1.17        
  • Return: -46%     
  • Total return: -44 %

TOTAL RETURN AVERAGE: -43%
 

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

FUND PROFILE: CONTRA THE HEARD PRESIDENT'S PORTFOLIO

PERFORMANCE AS OF NOV. 30, 2018:

  • 1 year: 9.7% fund, -5.4% index
  • 5 years: 22.5% fund, 2.7% index
  • 15 years:16.7% fund, 6.2% index

Index: TSX Composite.

Returns are gross of dividend, annualized and gross net of fees.

TOP FIVE HOLDINGS AND WEIGHTINGS

  1. Bank of America: 13.4%
  2. GSE Systems: 10.4%
  3. First United: 10.2%
  4. First US Bancshares: 6.9%
  5. Blackberry: 6.1%

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