Latest Top Picks
(A Top Pick July/16.) *Short* Up 74.69%. A lithium ion battery company. Made an acquisition in Germany, and the head of the company had to pay $250,000 to OSC over a disclosure that the OSC felt was a bit rosy. His analysis suggests this is worth significantly less then the current share price.
(A Top Pick July/16. Up 44.92%.) Investors like this name because of its predictability. When a quarter starts, because of so much recurring revenues, they already know what 90% of revenue is going to look like. Because of this, they spend the last 90 days of the quarter trying to get the next 10% in. It is always a non-event when they come out with quarters, and portfolio managers love that, and pay up for it. A growth story and a play on global trade and on increasing returns on cross-border traffic. A very good, long term story.
(A Top Pick July/16. Up 27.57%.) He still thinks the street is not giving them enough credit for the sub-metering business. There is a fair amount of excitement about an acquisition they did in the US and Canada, called Service Experts, which is more on the service side for HVAC business.
Has been looking at this for over 2 years, and met management repeatedly. Was aware of the Short attack circulating this summer, which had some pretty interesting important points to make. When a share price goes from $12 to around $3, his view is that it was fully priced in and there was a big overreaction by the street. They are exclusively based in the US, and have a medical product that is used by gastroenterologists in the clinics, kind of a Trojan horse for them because they have the clinics that are using the medical product, so have a relationship with them. With a number of the clinics, they have effectively bought 50% of the clinic, which allows them to provide the anaesthesia services on behalf of the doctors who work there. A pristine balance sheet. (Analysts’ price target is $5.)
Has more than 90% market share in Canada in the overnight carrier business. A great play on e-commerce in Canada. E-commerce volumes are going up 50% year-over-year. Dividend yield of 1.6%. (Analysts’ price target is $56.)
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Shaw family put their stake up for sale in Dec/12 and the share price took off. There wasn’t a bidder with an attractive price so the company decided to buy the shares at a premium. This didn’t go over well with some institutional investors. Dual Class share structure is now eliminated, which he likes. Largest pipe coating manufacturer globally. A lot of pipelines are 50-60 years old so this is a great structural play. Just bought the number 2 competitor in the offshore space so expects margins to increase dramatically. Feels it could breach $50 in 12 months.