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

MARKET OUTLOOK

We’re entering the dog days of summer. During this time, the markets normally don’t do one heck of a lot. Of course, that’s not every year. I noticed a long time ago that CEOs and CFOs of corporations were harder to get a hold of: many head to their docks in the countryside or other places to relax. Life is short. If possible, we should all take somewhat of a breather and enjoy what the season has to offer.

TOP PICKS

Benj Gallander's Top Picks

Benj Gallander, president of Contra The Heard Investment Letter, shares his top picks: Stuart Olsen, Black Diamond and North European Oil Royalty Trust.

STUART OLSEN (SOX.TO)
Last bought at $4.66 in 2018.

This quarter will likely not be very good for Stuart Olsen, but the corporation has signalled better numbers in the third and fourth quarter. The dividend was halved from $0.12 a quarter to $0.06 and, though not assured, seems reasonably secure. Last month the company announced $100 million in new contracts. This is one of the Canadian leaders in the construction arena. Initial sell target: $14.54.

BLACK DIAMOND (BDI.TO)
Last bought at $2.11 in 2018.

Red ink continues at Black Diamond, but it would not surprise if black is close. Revenues increased year over year as the push into modular space solutions seems to be paying off. They recently won a $20-million contract to supply housing in Paradise, California to support reconstruction following a wildfire. Back in the day circa 2014, the company traded for over $30 and paid a monthly dividend of $0.08. While getting back there looks like a pie-in-the-sky, our initial sell target of $10.24 seems eminently more reasonable.

NORTH EUROPEAN OIL ROYALTY TRUST (NRT.N)
Last bought at $6.52 in 2017.

Though based in the U.S., this trust pays a fat royalty based on oil and gas production in Germany. The dividend does vary, primarily with the cost of oil and gas, but currently it is almost 13 per cent. This one has potential for regular dividends and capital appreciation in the foreseeable future. Initial sell target: $23.84.

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
SOX  Y N Y
BDI Y N Y
NRT Y N Y

 

PAST PICKS: JUNE 21, 2018

Benj Gallander's Past Picks

Benj Gallander, president of Contra The Heard Investment Letter, reviews his past picks: Black Box, Pengrowth Energy and Sypris.

BLACK BOX (BBOX.O)
Sold in July at $1.88. Acquired by AGC Networks on Jan. 18.

  • Then: $2.35
  • On acquisition date: $1.09
  • Return: -54%
  • Total return: -54%

PENGROWTH (PFG.TO)

  • Then: $0.85
  • Now: $0.49
  • Return: -42%
  • Total return: -42%

SYPRIS (SYPR.O)

  • Then: $1.60
  • Now: $0.82
  • Return: -48%
  • Total return: -48%

Total return average: -48%

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
BBOX N N N
PFG Y N N
SYPR Y N N

 

FUND PROFILE

Contra the Heard President’s Portfolio
Performance as of July 2, 2019

  • Year-to-date: 9.0% fund, 16.6% index
  • 10 years: 21.3% fund, 11.5% index

INDEX: TSX. Returns are based on reinvested dividends, net of fees and annualized.

TOP 5 HOLDINGS

  1. Bank of America: 13.1%
  2. First United Corp: 9.5%
  3. GSE Systems: 8.7%
  4. First U.S. Bancshares: 6.4%
  5. Alacer Gold: 6.3%

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