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

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. Currently, the indicators have been strong and 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 also apply technical analysis to economic data. This is where things get a little more interesting. Some of the economic data is getting extended and technically getting to levels where the trends may be extended. We will need to watch the shorter-term economic indicator such as the Citi Economic Surprise Index for a trend change. Investors have been concerned with the inverted yield curve, but the reality is that the markets can continue to produce positive returns for several months following the inversion.

The top-down market technical indicators that we follow experienced significant weakness during October and November and have since recovered. We do see some very short-term extremes on some technical indicators and short-term sentiment. This may lead to market consolidation or weakness in May.

We review the indicators each month in our monthly indicator webinar. To receive an invitation to the webinar, please send an email to info@stonecastlefunds.ca and we will add you to our invite list.

TOP PICKS

Bruce Campbell's Top Picks

Bruce Campbell discusses his top picks.

NEXTLEAF SOLUTIONS (OILS.CD)
Last purchased at $0.65.

NextLeaf is entering the cannabis extraction sector to provide turnkey processing solutions for licensed cannabis producers. The management team has experience extracting in previous Health Canada medical cannabis programs. They have a mobile extraction and centralized processing solution for licensed producers. Several catalysts are expected in 2019 to transition the business.

GREENBROOK TMS (GTMS.TO)
Last purchased at $3.25.

Greenbrook is a leader in delivering transcranial magnetic stimulation (TMS), which is noninvasive therapy for depression cleared by the FDA. The company recently went public and the management team has experience rolling out laser vision services in the 1990s. Growth will come from both geographic expansion and new indications.

HERITAGE CANNABIS (CANN.CD)
Last purchased at $0.53.

This company is an integrated cannabis producer with two Health Canada-licensed facilities. The company recently acquired Purefarma, an extraction company, and has been ramping up their extraction technology in both facilities. Management has a strong business background in other sectors and continues to methodically execute, delivering publicly-stated objectives.

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
OILS Y Y Y
GMTS N N Y
CANN Y Y Y

 

PAST PICKS: MAY 10, 2018

Bruce Campbell's Past Picks

Bruce Campbell discusses his past picks

GRANDE WEST TRANSPORTATION (BUS.V)

  • Then: $1.46
  • Now: $0.57
  • Return: -61%
  • Total return: -61%

CANNEX CAPITAL (CNNX.CD)

  • Then: $1.20
  • Now: $1.92
  • Return: 60%
  • Total return: 60%

HEXO CORP (HEXO.TO)

  • Then: $4.97
  • Now: $10.52
  • Return: 112%
  • Total return: 112%

Total return average: 37%

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
BUS N N N
CNNX N N Y
HEXO N N Y

 

FUND PROFILE

Purpose Canadian Equity Growth Fund
Performance as of: April 30, 2019

  • Year-to-date: 35.2% fund, 16.9% index
  • 1 year: 17.8% fund, 9.6% index
  • 3 years: 23.1% fund, 9.1% index

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

TOP 5 HOLDINGS

  1. Indus Holdings: 7.3%
  2. Planet 13: 3.8%
  3. Valens Groworks: 3.8%
  4. Cannex Capital: 3.7%
  5. Shopify: 3.2%

WEBSITE: stonecastlefunds.ca
TWITTER: @sc_funds