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

MARKET OUTLOOK

Frothy? Lofty? Elevated? I like “bubblicious,” even if it does not pass spellcheck. Some people say a stock market bubble can’t be recognized until it bursts, but I beg to differ. And this time, because debts and deficits are so high and interest rates so low, the defences to fight a recession are limited. Alas, the current economic sugar rush can’t continue. Even Donald can’t pass an economic decree to ensure all will remain wonderful.

TOP PICKS

Benj Gallander's Top Picks

Benj Gallander, president of Contra The Heard Investment Letter, discusses his top picks: Quarterhill, Stuart Olson, and cash.

QUARTERHILL (QTRH TSX)

Quarterhill has won $85.32 million in its patent lawsuit against Apple. However, this is still not a done deal as the process could take up to another two years with appeals. If the company receives the money, the big question is how it will use it, with some likely targeted for takeovers. Perhaps there will be a special dividend. Meanwhile, all three divisions are operating well.

STUART OLSON (SOX TSX)

Stuart Olson took a beating when it halved the dividend last year and a further pounding when it was eliminated. Though not out of the dark woods and facing a difficult quarter or three, the company has refinanced the convertible debentures through 2024 and is cutting costs to become a leaner organization. While losing a bit of money, the backlog has increased along with revenues. Difficulties persist for the company in the oil sands.

CASH

This appears to be a good time to harvest gains given that stock markets are at record levels. Also, since I feel that the market will take a tumble, it would prove wise to have cash on the sidelines for the buying opportunities.

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
QTRH Y N Y
SOX Y N Y

 

PAST PICKS: FEB. 19, 2019

Benj Gallander's Past Picks

Benj Gallander, president of Contra The Heard Investment Letter, discusses his past picks: GMP Capital, First U.S. Bancshares, Cathedral Energy.

GMP CAPITAL (GMP TSX)

  • Then: $2.74
  • Now: $1.88
  • Return: -31%
  • Total return: -18%

FIRST US BANCSHARES (FUSB NASD)

  • Then: $9.95
  • Now: $11.70
  • Return: 18%
  • Total return: 19%

CATHEDRAL ENERGY (CET TSX)

  • Then: $0.76
  • Now: $0.25
  • Return: -67%
  • Total return: -67%

Total return average: -22%

 

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

 

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