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. Investors, and what appears to be a legion of speculators, should be wary that if they are buying into the super hot spheres of cybercurrencies and/or marijuana, that buying and holding could have negative consequences. But given the economy, the unemployment rate and the flights of the various markets, these are indeed the good old days.

TOP PICKS

QUARTERHILL (QTRH.TO)
The big news is that the company has hired David Parker as CEO/president. When he was a senior VP at Open Text, they did about $2.5B in acquisitions. QTRH is definitely in growth mode. Meanwhile, the WiLan division has recently acquired patents from Panasonic and concluded licensing deals with Kyocera and Lexmark. The company’s last quarter was awesome indeed, although for whatever reason it did not excite market. The company pays a dividend.​ Last purchased at $1.98 in 2016. Initial sell target: $4.84.

GMP CAPITAL (GMP.TO)
GMP has been pushing into the cybercurrency and marijuana spaces, arguably the two fastest growing sectors in Canada. Plus, with commodity prices up along with oil and gas, this company should be doing more capital raises in these fields, which should boost both the top and bottom lines. This could be a comeback year for the enterprise that has struggled. Much of the competition has died or merged. Last purchased at $3.32 in 2017. Initial sell target: $15.44.

AEGON (AEG.N)
This huge Dutch insurance and money management enterprise seems to be finally gaining some momentum. Revenues have been moving up smartly and the bottom line is black. It pays a nice dividend while offering exposure to Europe. Last purchased at $7.64 in 2014. Initial sell target: $20.34.

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
QTRH Y N Y
GMP Y N Y
AEG Y N Y

PAST PICKS: FEBRUARY 7, 2017

FIRST US BANCSHARES (FUSB.O)

  • Then: $12.30
  • Now: $12.82
  • Return: 4.32%
  • Total return: 5.02%

OBSIDIAN ENERGY (OBE.TO) — previously Penn West Petroleum

  • Then: $2.15
  • Now: $1.57
  • Return: -26.97%
  • Total return: -26.97%

AGJUNCTION (AJX.TO)

  • Then: $0.53
  • Now: $0.51
  • Return: -4.67%
  • Total return: -4.67%

TOTAL RETURN AVERAGE: -8.87%

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
FUSB Y N Y
OBE Y N Y
AJX Y N Y

FUND PROFILE
President’s Portfolio Contra the Heard
Performance as of: December 31, 2017

1 Year Return: 9.4% fund
5 Year Annualized Return: 22.5% fund
15 Year Annualized Return: 16.7% fund

*Not based on reinvested dividends and 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%

TWITTER: @ContratheHeard
WEBSITE: www.contratheheard.com