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(Bruce is on this company’s board.) They are constantly looking to make acquisitions. Businesswise things are fantastic. Made their first acquisition of a company called Blaze King, a wood stove manufacturer. Things are going so well that they increased their dividend from $0.02 to $0.02.5 starting in October.
Has been out of this sector for about a year, but currently has his eye on it. Part of the screening he does is now starting to see some names perk up into that area. This ranks in about the middle of his pack. He would wait for it to move a little bit higher in his ranking, as well as some improvement technically.
Owned this in the past and pretty much keeps an eye on it. Made acquisitions of 3 natural gas fired power plants in Northern California. These will add some diversification. Management has done an excellent job of growing the company and of growing the dividend. Thinks this will continue down the road. It is on his radar screen and ranks very well in his process.
Has his eye on this. Stock has done very well over the last few years. Ranks fairly well in his process. They secured the contracts for Purolator and Canada Post. Management has done an excellent job of building, and he thinks they are going to continue to do that. The one caveat is that it is a fairly competitive industry, and fuel costs can be something that really eats into profitability. Right now they have a tailwind with fuel prices, but if jet fuel prices start to climb, that would be something you want to be cautious of. Right now it is a good investment.
This takes different video feeds, compresses it and puts it into all different formats so that you can watch it on an iPad, Blackberry, etc. Their specialty in the past has been the NHL and some of the sports leagues. They also work with TV manufacturers and distributors. Recently lost their NHL contract which created a huge hit in the stock price. Thinks they will still grow and have nice numbers going forward. The stock price is probably going to take a little while until people have a real sense of where the business is going. Long-term this is going to be a business that continues to grow as more people are watching TV on mobile devices. So far they are only in North America and have no content in Europe. That and Asia would be a huge expansion.
Has done phenomenally well. Had good numbers in their last quarter. A grow by acquisition story. Not really well known or followed, but expects they will continue to do acquisitions. The multiple is a bit high, but that’s because management has delivered. If you have a 2-3 year timeframe, they will probably continue to grow their earnings to a point where even if they have some multiple contractions, the stock price would go higher.
They were planning on divesting out of their ExactEarth ship service, but that got put on hold because of market conditions. Their core business is manufacturing satellite components, which is going to be a growing business over the next decade. In the short term it looks like there has been a slowdown in that business. Doesn’t see a lot in significant earnings growth right now. They are also under strategic review, so are trying to look at ways to enhance shareholder value. He is just happy to stand aside and watch.
(A Top Pick Sept 24/14. Up 156.7%.) Recently made a $3 billion acquisition. There is going to be a new issue, part of which is going to be equity. Just filed the shelf prospectus for that and are expecting to make $500 million with a 15% over allotment. They haven’t set the pricing yet, but the deal is well over subscribed. This is mostly being done in the US.
Always has a tough time with this because of very, very lumpy earnings. Just recently came off a couple of poor quarters, so valuation is certainly a lot cheaper than what it has been. Doesn’t see the catalysts in the short term. However, longer-term, this is a growth business. Their software helps different Internet service providers to throttle usage. This is going to be a huge business as we all continue to consume more data online, both with our mobile devices and as well as with wires. There is a future, but he is not convinced it is right now.
This has solar technology and is involved in a number of different areas. Over the next few years he thinks it is going to be a significant growth story. Management came in 2013 and immediately improved the bottom line and started to show profitability. Made some acquisitions and said there was going to be continued acquisitions. There is also organic growth. Not super cheap or super liquid, so it tends to get pushed around a little. Probably a really attractive entry point. Management owns about 40% of the company.
One of 2 premier drillers in Canada. Believes it will be a survivor and will thrive going forward. He would like to see some stability in the sector. Drillers and service companies are still getting a lot of pressure from the E&P companies to reduce their costs. That means smaller margins for the drillers and a lot of competition. This one has a lot of torque, so when things start to turn up, you might miss the first 10%-15% move in the stock price, but it will have lots of room to go. If you have a five-year time frame, now is probably a time to initiate part of your position.
It is amazing how emotion swings from one extreme to the other. Back in May, Michael Dalsin was really King of Bay Street. Casey Hoyt is the new CEO, and he has a fantastic track record of growing the business. Has been adding to his holdings. They are doing a fantastic job of executing on the business plan. There is a lot of value in this company. It will probably take a quarter or 2 for investors to take a look at the actual numbers and realize that management is doing what it said it would do. Super cheap right now, probably trading at 5 or 6 times its 2016 EBITDA. Thinks it has a strong future ahead of it.
Markets. He looks at the market internals price and volume data as well as a number of different economic indicators. Currently they are mostly out of the US including the leading economic indicators, the ISM, etc. and are still very positive. LEI is another indicator he likes to look at for the 18 moving average, and whenever LEI crosses below that, it has been a very strong positive sign that we are going to see a recession. He is still not seeing anything like that. The ISM is also very strong. Manufacturing isn’t super strong, but the services side is very strong, which is a big part of the US economy. He is defensive and cautious right now. In June, some of the market indicators turned negative, so he started to raise his cash position and is about 30% in cash now. If you are looking at things from a 3 year timeframe, right now you could be picking away.