MARKET OUTLOOK:

Markets are slightly off their all-time highs, but under the surface, we have been experiencing a correction over the last six months. This under the surface correction appears to be ending with a reacceleration in the economy. Economic data from the last three months showed a slowing or decline in the rate of growth due to surging COVID-19 Delta cases. In the last three weeks COVID-19 cases have been dropping and this should translate to a re-acceleration in economic data over the next quarter.  

The technical indicators that we follow have started to improve with many sectors and companies forming bottoms and starting to move upwards. In particular, mid-cap and small-cap company shares have been gaining relative strength over their large-cap peers. This leadership of the small- and mid-caps follows a period of relative decline since March. This broad-based market participation should have more companies’ share prices appreciating. On top of the economic and technical improvements, we are entering the strongest seasonal period for markets which runs from the end of October to the start of May.  

During the last 18 months, sector rotation changes have been frequent and positioning in the correct sectors has been important for portfolio returns. We appear to be in another one of those transitions with technology, utilities and staples losing relative strength while energy, materials and financials showing leadership. Each month we review our top-down indicators and assess the sector rotation during our monthly webinar. 

TOP PICKS:

PlantFuel Life (FUEL CSE) 
Last bought at $0.27
PlantFuel Life is a plant-based performance nutritional products company. The management team has experience building a previous nutritional product company into a market leader. With that experience they have been able to form partnerships with GNC and Amazon. They are in the process of ramping up with GNC and will soon launch as a premium product with Amazon.  

Greenlane Renewables (GRN TSX) 
Last bought at $1.72
Greenlane is a leading provider of biogas upgrading systems to help waste producers and gas utilities develop renewable natural gas systems. Governments and regulators continue to mandate renewable natural gas in the utilities system, this should create a tailwind of new projects for years to come.

Reliq Health Technologies (RHT TSXV) 
Last Bought at $0.95
Reliq is a home healthcare monitoring company focused on chronic conditions. The company offers their iUGO care platform which allows for remote real time monitoring of patients. The company operates on a recurring subscription revenue model which has high margins at scale. The company is forecasting profitability in 2021 and ending the year at run rate revenue of $24 million and doubling again in 2022.   RHT’s CEO has been accumulating stock over the last year.  

PAST PICKS: December 8, 2020

Good Natured Products (GDNP TSXV)

• Then: $1.22
• Now: $0.90
• Return: -26%
• Total Return: -26%

Tamarack Valley Energy (TVE TSX)

• Then: $1.00
• Now: $3.57
• Return: 257%
• Total Return: 257%

Dye & Durham (DND TSX) 

• Then: $35.79
• Now: $36.25
• Return: 1%
• Total Return: 1%

Total Return Average: 77%