Full episode: Market Call Tonight for Friday, August 9, 2019
Bruce Campbell, president and portfolio manager at StoneCastle Investment Management
Focus: Canadian equities
We follow top-down economic and market indicators to help us to determine if our portfolios are on offence or defence at any given time.
Currently, the indicators have been resilient on multiple data points. We’ve started to see some of the leading indicators showing signs of improvements (such as the Chemical Activity Barometer). We have also seen some of the shorter-term indicators showing improvement (such as the Citi Economic Surprise Index).
The top-down technical indicators that we follow experienced weakness during the last few weeks. It looks like we may be set for some choppy up and down volatility over the next couple months. This volatility may present opportunities as we’re also seeing some underperforming sectors starting to show the initial signs of bottoming (energy and cannabis). These sectors could be the leaders in the next uptrend.
INDUS HOLDINGS (INDS.CD)
Last purchased at $6.49.
Indus is a vertically-integrated California cannabis operator. They’re using a consumer packaged goods (CPG) approach to building their company. They have a strong platform of brands, an experienced management team, the company is well capitalized and it trades at a significant discount to U.S.-focused peers.
K92 MINING (KNT.V)
Last purchased at $2.17.
K92 operates the Kainantu Mine in Papa New Guinea. They produce 47,500 ounces of gold with cash costs in the $600 per ounce range. Near-term expansion is to 70,000 ounces and long-term expansion is to 120,000 ounces per year.
C21 HOLDINGS (CXXI.CD)
Last purchased at $0.84.
C21 is a U.S.-based multi-state cannabis operator. The company is fully integrated from cultivation to through to retail. Recent changes to management have seen an immediate move towards profitability. The stock trades at less than 2.5 times price to sales versus U.S.-focused peers at 7.5 times price to sales.
PAST PICKS: JULY 25, 2018
- Then: $30.90
- Now: $15.10
- Return: -51%
- Total return: -49%
1933 INDUSTRIES (TGIF.CD)
- Then: $0.41
- Now: $0.38
- Return: -7%
- Total return: -7%
GRANDE WEST TRANSPORTATION (BUS.V)
- Then: $1.39
- Now: $0.44
- Return: -68%
- Total return: -68%
Total return average: -41%
Purpose Canadian Equity Growth Fund
Performance as of: August 8, 2019
- Year-to-date: 22.6% fund, 1.6% index
- 1 year: 11.1% fund, 3.9% index
- 3 years: 17.8% fund, 6.7% index
INDEX: TSX Total Return.
Returns are based on reinvested dividends, net of fees and annualized.
- Planet 13: 3.5%
- WesDome Gold Mines: 3.3%
- Detour Gold: 3.2%
- Semafo: 3.2%
- Polaris Infrastructure: 3.0%