Peter Imhof, Vice President and Portfolio Manager, AGF Investments
Focus: North American small caps
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Market Outlook
I expect to see heightened volatility over the coming months. The U.S. election may cause havoc in certain sectors over the next few months, but I believe the bias is to the upside over the balance of the year. The path to a higher market will be a bumpy one. Investors should stay the course and make sure that they have done their due diligence on the stocks they own. Oftentimes, people get scared out of the market because of the volatility. Small caps should continue to outperform as they have done so year to date. The small cap market in Canada has underperformed the larger cap market for the last five years, but I believe we may have broken out of that pattern.

Top Picks

Diamcor Mining Inc. (DMI.V)
Diamond miner that is under the radar of all analysts. The company has been able to successfully start producing over the past few quarters and will ramp up production in the fourth quarter and into 2017. Opportune time to get into this name as diamond prices are at multi-year lows. I recently did a financing with them at $1.10 with a half warrant for three years at $1.60. The company is cashed up and will be hitting its stride over the next 12 months. I believe the company can earn between 20 to 40 cents next year without a recovery in diamond prices. The stock trades at between 2.5x to 5.5x earnings depending on what numbers you use for next year.

Ceapro (CZO.V)
Biotech company that has been able to produce extremely strong bottom line numbers for the past number of quarters. Their product (beta glucan) goes into such products as Aveeno, Neutrogena and Burt’s Bees. Not covered by any analyst, presently. Very interesting as they just announced the opening of a new facility that will increase their production capabilities by 10x.

Tamarack Valley Energy (TVE.V)
Oil and gas producer that has quietly increased their production over the past few years. The management has done a good job of under-promising and over-delivering. The most recent quarter showed production volumes of 9500 BOE but I would expect that to increase; they should be able to exit 2016 at 11 000 BOE. The stock trades at a discount to other producers despite the fact that they have one of the better net backs in the industry and have a good balance sheet.
 

Disclosure Personal Family Portfolio/Fund
DMI Y N Y
CZO N N Y
TVE N N Y


Past Picks: January 8, 2016

Boyd Group (BYD_u.TO)

  • Then: $62.16
  • Now: $83.06
  • Return: 33.61%
  • TR: 34.31%

Milestone REIT (MST_u.TO)

  • Then: $14.86
  • Now: $19.37
  • Return: 30.35%
  • TR: 34.41%

Skechers (SKX.N)

  • Then: $26.77
  • Now: $22.19
  • Return: -17.37%
  • TR: -17.37%

Total Return Average: +17.11%
 

Disclosure Personal Family Portfolio/Fund
BYD_u N N Y
MST_u N N Y
SKX.N N N Y


Fund Profile: AGF Canadian Growth Equity Class

Performance as of: August 31, 2016

  • 1 month: Fund 0.4%, Index* 0.3%
  • 6 months: Fund 15.3%, Index* 15.3%
  • 1 year: Fund 7.8%, Index* 8.7%

*Index: TSX


Top Holdings and Weightings

  1. Real Matters – 5.4%
  2. Parex Resources – 4.1%
  3. Alimentation Couche Tard – 3.5%
  4. Boyd Group Income Fund – 2.8%
  5. Milestone Apartment Reit – 2.6%


Website: www.agf.com