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

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MARKET OUTLOOK

The key to putting the right ingredients in play for an economy is not simply looking at today, but where things appear to be going. As Gretzky said: “Skate to where the puck is going, not where it has been.”

While well behind the reality, it appears that the Fed and the Bank of Canada are finally catching on. as I’ve stated before, “these are the good old days.” Unfortunately, governments aren’t reacting smartly and should be creating surpluses rather than massive debts. Loosening banking regulations too far can create a major danger. The good old days can deteriorate very quickly.

TOP PICKS

BLACK BOX (BBOX.O)
Bought at $3.60 in 2017.

Digital technology solutions enterprise Black Box is attempting a turnaround under relatively new CEO Joel Trammell. Trammell has an excellent track record and two other organizations that he helmed were taken over. That could eventually happen here. But first, there’s much work to be done to get this former high-flyer that once traded at almost $80 away from its flirtation with Chapter 11.

PENGROWTH (PGF.TO)
Bought at $4.16 in 2014.

This one remains a dangerous position as the company still has a huge debt-load and is now effectively reliant on two properties. Good to know that Seymour Schulich is a major shareholder and that he bought even more last month. It will be interesting to see what the new CEO Peter D. Sametz does. High risk, very high reward potential.

SYPRIS (SYPR.O)
Bought at $1.56 in 2017.

This electronics and technology provider is hoping to get back into the black this year. The company has almost no debt, insiders are well vested owning 47 per cent, and revenue and gross margin are both improving. The company has taken the axe to expenses. This is another former high-flyer that traded above $40.

 

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

 

PAST PICKS: AUG. 14, 2017

AEGON (AEG.N)

  • Then: $5.87
  • Now: $6.05
  • Return: 3%
  • Total return: 8%

GMP CAPITAL (GMP.TO)

  • Then: $2.30
  • Now: $3.05
  • Return: 33%
  • Total return: 37%

QUARTERHILL (QTRH.TO)

  • Then: $1.71
  • Now: $1.57        
  • Return: -9%
  • Total return: -6%

Total return average: 13%

 

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

 

FUND PROFILE

Contra the Heard Investment Letter President’s Portfolio

  • 1-year return: 9.7%
  • 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: 11,3%
  2. ATS Automation: 10.9%
  3. First United Corp: 8.9%
  4. GSE Systems: 8.7%
  5. Blackberry: 6.0%

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