Full episode: Market Call for Thursday, October 12, 2017
Bruce Campbell, president and portfolio manager, StoneCastle Investment Management
FOCUS: Canadian equities
We continue to see strong economic numbers from the economy in North America and also globally. Most recently the Citi Economic Surprise Index has been trending higher. This index tends to lead the ISM Manufacturing and ISM Services indices. Both of the ISM indices have also surprised to the upside in the past month. The ECRI leading economic indicator has pulled back in recent weeks, but continues to indicate the economy is growing. With the economic indicators continuing to improve, the probability of a recession starting are low until at least mid-2018.
The top down market technical indicators that we follow have had us in Neutral positioning since March. We had built up a cash position waited to see changes in the indicators. Over the last six weeks we have seen improvement in the indicators we follow. As a result of these improvements we have moved our portfolios back to offence and fully invested in the first weeks of September.
Each month we host a regular monthly webinar where we update investors on the indicators and whether we are on Offence or Defense with our portfolios. The next webinar is October 18 at 4:30pm ET. To register contact email@example.com
RELIQ HEALTH TECNOLOGIES (RHT.V)
The Company is a software technology company that provides automated patient monitoring in the home. The Company’s technology allows for two way voice technology to monitor and collect medical records that are transmitted in real time with the patient, family and the care team. The company charges a monthly subscription free for the service that is dramatically below the cost of traditional homecare. The company is forecasting profitably in the middle of 2018. Management and insiders own 24 per cent of the company. Last purchase was $0.355. Funds own, but none personally or family.
CANOPY GROWTH (WEED.TO)
The Company is Canada’s largest licensed cannabis company. They are diversified geographically and also by growing methods (indoor and greenhouse). Over the next 10-20 years the Cannabis industry will be one of the fastest growing industries and Canopy will be the world leader in the sector. Canopy has been growing market share both organically and by acquisition and meets all the criteria we are looking for when selecting companies for our New Era Cannabis Fund. The last purchase was $10.79. Funds own, but none personally or family.
CCL INDUSTRIES (CCLb.TO)
The Company is one of the world’s largest label and packaging companies. The management team has an exceptional record making acquisitions then driving cost synergies from the acquisition while ramping up organic growth. The stock price recently pulled back and consolidated, and is now starting the next leg of acceleration upwards. Last purchase was $62.28. Funds own, but none personally or family.
GRAND WEST TRANSPORTATION (BUS.V)
- Then: $0.94
- Now: $2.91
- Return: 209.57%
- Total return: 209.57%
- Then: $25.00
- Now: $29.32
- Total return: 20.06%
TIDEWATER MIDSTREAM (TWM.V)
- Then: $1.56
- Now: $1.37
- Return: -12.17%
- Total return: -9.67%
TOTAL AVERAGE RETURN: 73.32%
REDWOOD EQUITY GROWTH FUND
Performance as of October 11, 2017
YTD: 13.10%, Fund, 3.35% Index*
1 Year: 26.30% Fund, 8.59% Index*
5 Year: 12.89% Fund, 5.25% Index*
* S&P/TSX Composite Index.
* Returns include all distributions and are net of all fees.
TOP FIVE HOLDINGS AND WEIGHTINGS
- WESTPORT FUEL SYSTEMS 3.66%
- CANOPY GROWTH 2.71%
- YANGARRA RESOURCES 2.68%
- PATIENT HOME MONITORING 2.64%
- CALFRAC WELL SERVICES 2.63%