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

Volatility has returned to the markets and more of it can be expected. With interest rates increasing, there’s no question that there will be more competition for stocks from other asset classes, reducing the demand side of the equation for equities to some degree.

TOP PICKS

GMP CAPITAL (GMP.TO)
Purchase price: $3.32 in 2017. Initial sell target: $15.44.

When GMP announces results at the end of the week, odds are that revenue will jump because of the company´s entry into cybercurrency and marijuana, arguably the two fastest-growing spaces in Canada. This company is an interesting way to play these two sectors simultaneously.

Scotiabank´s takeover of Jarislowsky Fraser increases the likelihood of a suitor for the Richardson part of GMP, or the whole company.

QUARTERHILL (QTRH.TO)
Purchase price: $1.98 in 2016. Initial sell target: $4.84.

Quarterhill likely has expansion on the agenda with the arrival of David Parker as president and CEO. He helped increase revenues at OpenText by $2.5 billion. There’s money in the kitty, but the enterprise must be careful not to overspend and retain enough ammunition to maintain the dividend.

OBSIDIAN ENERGY (OBE.TO)
Purchase price: $4.01 in 2014.

When CEO David French was the head honcho at Bankers Petroleum, it got acquired at a significant premium. Zach George´s hedge fund, FourFront Capital, has taken a 5.6 per cent in Obsidian and is agitating for change. He’s the son of the former chairman, Rick George. A sale of this company at a premium would not be a surprise.

 

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

 

PAST PICKS: APRIL 3, 2017

WI-LAN (WIN.TO)
Now Quarterhill.

  • Then: $2.55
  • Now: $2.15
  • Return: -15.68%
  • Total return: -14.04%

BLACKBERRY (BB.TO)

  • Then: $10.45
  • Now: $15.86
  • Return: 51.77%
  • Total return: 51.77%

CDI CORP (CDI.N)
Sold at $8.25.

  • Then: $8.25
  • Now: $8.20
  • Return: -0.60%
  • Total return: -0.60%

Total return average: 12.37%

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
WIN/QTRH Y N Y
BB Y N Y
CDI N N N

 

FUND PROFILE

President’s Portfolio Contra the Heard
Performance as of: Dec. 31, 2017.

  • 1 year return: 9.3%
  • 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. Bank of America: 11,2%
  2. First United: 11.0%
  3. ATS Automation: 9.4%
  4. GSE Systems: 8.9%
  5. BlackBerry: 7.0%

TWITTER: @BenjContra
WEBSITE: www.contratheheard.com
GLOBE AND MAIL COLUMN: The Contra Guys