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

Though markets do appear high by most metrics and a blow-off at some point is certain, it would not be surprising if there is a leg or two left. Our palms are prepared to scoop up some bargains during the upcoming tax loss season, the same approach we follow every year. Due to the markets' high levels though, in some cases the dollars laid on the table could be lessened.

TOP PICKS

QUARTERHILL (QTRH.TO)
Purchased at $1.98 in 2016. Quarterhill’s projected quarterly revenues will likely be between $73 to $83 million, up from $19 million last quarter. Total sales in 2016 were $93 million. If margins are good, this could help the stock shoot up when results are reported on November 9th. Meanwhile, we’ll collect the dividends. Initial sell target is $4.84.

CATHEDRAL ENERGY (CET.TO)
Purchased at $3.11 in 2016. This driller has seen the billionaire Wilks Brothers buying a heap of shares. These very successful investors have boosted the stock price, in conjunction with the improving energy arena. It's worth noting that Cathedral’s quarterly revenues went up 135 per cent year over year, the enterprise is marginally profitable and has less that $1 million in debt. Initial sell target is $9.84.

ALACER GOLD (ASR.TO)
Purchased at $2.01 in 2014. Alacer reported results this week. The company is profitable and is coming in on time and under budget on its Çöpler expansion, which should be producing next year. Current AISC is $623/oz. Initial sell target is $6.44.

 

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

PAST PICKS:  SEPTEMBER 22, 2016

FIRST US BANCSHARES (FUSB.O) (formerly United Security Bancshares)

  • Then: $9.73
  • Now: $11.34
  • Return: 16.59%
  • Total return: 17.41%

INNODATA (INOD.O)

  • Then: $2.23
  • Now: $1.20
  • Return: -46.08%
  • Total return: -46.08%

FIRST UNITED CORPORATION (FUNC.O)

  • Then: $10.50
  • Now: $17.80
  • Return: 69.52%
  • Total return: 69.52%

TOTAL RETURN AVERAGE: 13.61%

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
FUSB Y  N N
INOD Y N N
FUNC Y N N

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

1 year return: 19.8%
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