Bruce Campbell, president and portfolio manager at StoneCastle Investment Management
Focus: Canadian stocks

MARKET OUTLOOK

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.

The top-down economic data continues to be positive in North America. The economic cycle is extended and as a result, we often see lumpy individual monthly data points while the long-term trend still shows growth. During most of 2019 we saw mixed economic data, but near the end of the year, we started to see re-acceleration from a few of the data points. We will watch those closely in the coming months to see if they’re impacted by the coronavirus.

The top-down market technical indicators experienced significant changes over the last two months. We see increased market breadth and improvements across multiple market capitalization. These changes are significant. We have not experienced this number of positive changes since early 2018.

TOP PICKS

Bruce Campbell's Top Picks

Bruce Campbell, president and portfolio manager at StoneCastle Investment Management, discusses his top picks: Greenlane Renewables, Premium Brands, Lightspeed.

GREENLANE RENEWABLES (GRN TSXV)
Last purchased at $0.50.

Greenlane is a global provider of biogas upgrading systems. The company has over 100 installations in 18 countries. Currently, 0.3 per cent of North American natural gas is renewable, with interest by governments to move towards 5 per cent. Greenlane has been growing their quote log and signing more contracts at an accelerated pace. The industry is in growth mode and this stock trades at a significant discount to peers.

PREMIUM BRANDS (PBH TSX)
Last purchased at $95.93.

Premium Brands owns a broad range of specialty food manufacturing and distribution businesses across North America. The business has seen strong growth from their sandwich business led by their largest customer, Starbucks. They continue to gain business from other large retailers such as Costco, Walmart, Circle K and Dollar General. The stock went through a correction in 2018 and early 2019 based on valuation and looks to be regaining momentum. With increased EBITDA and the stock trading at a lower multiple, we’re at an attractive entry point.

LIGHTSPEED (LSPD TSX)
Last purchased at $32.99.

Lightspeed is a software provider to small- and medium-sized retailers and restaurateurs. The company operates globally and has grown their revenue in the last quarter 50 per cent year-over-year while growing customers at a 40 per cent year-over-year rate. The stock pulled back after the recent earnings report and provides an opportunity to invest at a better valuation.

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
GRN Y Y Y
PBH N N Y
LSPD Y Y Y

 

PAST PICKS: JANUARY 30, 2019

Bruce Campbell's Past Picks

Bruce Campbell, president and portfolio manager at StoneCastle Investment Management, discusses his past picks: Protech Home Medical, Wesdome Gold Mines, C21 Investments.

PROTECH HOME MEDICAL (PTQ TSXV)

  • Then: $0.95
  • Now: $0.91
  • Return: -4%
  • Total return: -4%

WESDOME GOLD MINES (WDO TSX)

  • Then: $5.06
  • Now: $9.34
  • Return: 85%
  • Total return: 85%

C21 INVESTMENTS (CXXI CSX)

  • Then: $1.04
  • Now: $0.49
  • Return: -53%
  • Total return: -53%

Total return average: 9%

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
PTQ N N Y
WDO N N N
CXXI N N Y

 

FUND PROFILE

Purpose Canadian Income Growth Fund
Performance as of Feb. 12, 2020

  • 1 month: 2.36% fund, 4.45% index
  • 1 year: 7.89% fund, 17.26% index
  • 3 years: 6.33% fund, 7.34% index

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

TOP 5 HOLDINGS

  1. Diversified Royalty: 5.66%
  2. True North Commercial REIT: 5.18%
  3. Capital Power: 4.96%
  4. Fiera Capital: 4.68%
  5. Protech Home Medical Convertible Debenture 8% 03/07/24 bond: 4.66%

 

TWITTER: @sc_funds
WEBSITE: stonecastlefunds.ca