Benj Gallander, president of Contra The Heard Investment Letter 
FOCUS: Contrarian investing
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MARKET OUTLOOK

Yes indeed, these are the good old days. Stocks at record levels, unemployment levels way down, filling the gas tank is not onerous. Though the world of Canada is not perfect, this holiday season is a good time to be thankful. But given that over the past few years housing purchases have been astonishingly high and car sales at record levels, people looking forward should recognize that most people who just bought will not be purchasing again soon. That will place a drag on the economy and the stock market.

TOP PICKS

AEGON (AEG.N)
This huge Dutch insurance and wealth management company appears to be in turnaround mode. It has been years coming. Besides value guys like us, it could also be of interest to momentum players. Another company that pays a dividend while we wait. Bought in 2014 at $7.64. Initial sell target: $20.34.

CATHEDRAL ENERGY (CET.TO)
The billionaire Wilks Brothers from Texas have continued to buy shares in this driller since I chose it last time. Worth noting that Cathedral’s quarterly revenues went up 85 per cent year over year, and 106 per cent year to date. The enterprise is marginally profitable and has knocked down what was once an onerous debt load to less than $1 million. Bought in 2016 at $3.11. Initial sell target: $9.84. 

QUARTERHILL (QTRH.TO)
Quarterhill has brought in a permanent CEO to replace their interim CEO who has resumed his position as CFO. They are still looking for someone to assume the CEO post for the WiLAN division. Meanwhile, the numbers have improved and the enterprise continues to pay a dividend. Bought in 2016 at $1.98. Initial sell target: $4.84.  

 

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

PAST PICKS: DECEMBER 22, 2016

AEGON (AEG.N)

  • Then: $5.54
  • Now: $6.15
  • Return: 11.01%
  • Total return: 17.21%

INNODATA (INOD.O)

  • Then: $2.15
  • Now: $1.12
  • Return: -47.90%
  • Total return: -47.90%

BLACKBERRY (BB.TO)

  • Then: $9.68
  • Now: $13.27
  • Return: 37.08%
  • Total return: 37.08%

TOTAL RETURN AVERAGE: 2.13%

 

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

FUND PROFILE
President’s Portfolio Contra the Heard
Performance as of: December 31, 2016

1 Year: 19%
5 Year Annualized Return: 26.9%
15 Year Annualized Return: 19%

*not based on reinvested dividends
*net of fees

TOP HOLDINGS AND WEIGHTINGS

  1. First United Corp.: 12.3%
  2. Bank of America: 11.1%
  3. GSE Systems: 10.6%
  4. ATS Automation: 9.2%
  5. BlackBerry: 7.0%

WEBSITE: www.contratheheard.com