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Markets. If we get a recession in the US and Canada, we are pretty well guaranteed to get a Bear market. The two go hand-in-hand. When looking at economic data, it is most important to look at the US because they have such a bearing on global markets and global economies. He watches indicators out of the US fairly carefully, and when they start to turn down that usually precedes a bear market for a 6-9 months’ timeframe, and precedes a recession for the same amount of time. February through until April was a great time for the market, a broad-based advance with lots of stocks taking part. A number of stocks had a breadth that was very strong, and it reached extremes he hadn’t seen in a number of years. When that happens, it is typically a strong precursor to returns going forward. However, it takes a lot of energy to get that kind of breadth number, and typically after he sees it, there is a minor correction (consolidation) for a few weeks. Looking out 12-18 months, that is where you really see the strong returns.

HOLD

In the Canadian drug business. A bit smaller name, so probably doesn’t get the following that some of the larger names do. In his ranking, it is pretty much in the middle of the pack from a fundamental and technical standpoint. Just did an acquisition last year and he was a little surprised the stock price didn’t move up, but actually moved down. Thinks it was a function of the space in general and investors appetite for those kinds of stocks. Trades at a cheap valuation. If you are patient, it is probably a good time to Hold and you will see some capital appreciation as they continue to build out their brands and also get a little more recognition from the market for what they have and what they have purchased recently, which they got at a pretty cheap multiple.

HOLD

Ranks fairly well in his process. He looks for companies that have solid, steady, growing earnings. This certainly fits that bill. There are 2 things against the stock price. 1.) Liquidity. A shareholder still owns a significant amount, and has been selling it down, so liquidity has improved a fair bit. 2.) Size. Not a super big company, so it doesn’t fit into a lot of the portfolios of the larger portfolio managers. They have a great operation with their rigs operating under contract in Papua New Guinea. Also, has a great yield that is well-maintained. Wouldn’t be surprised to see them make some acquisitions and start to expand the business.

HOLD

He operates such that if anything goes against the company by 20%, he tries to Sell unless there is a real big catalyst. Everyone was quite excited about the buildup of the auto sector. Now there is a lot of talk about “peak auto”, and this company has been caught by that. Long-term this is a great company and will continue to make great acquisitions and grow. If holding for 3-5 years, he doesn’t see any problem. You can probably accumulate more on weakness. On a shorter term time frame, you might want to wait until there is a ramp up in the technicals before going back in.

COMMENT

Has owned this in the past. Just released their numbers, and he would have liked to have seen stronger numbers out of AMCo. However, it has been fairly steady and they did do another acquisition. From about a year ago until recently, the wind was blowing in their face and no one liked the sector. It appears some of that is now starting to come off. It looks like it might be a little more fairly valued now from a valuation standpoint. He is watching this fairly closely, and it has been improving a fair bit.

COMMENT

Packaging of food and healthcare products. Its history has been one of creating a lot of value for shareholders. Have done it both organically and through acquisitions, and thinks that will continue. There is starting to be some sector rotation with people moving out. When a portfolio manager makes a big move of selling down, the stock will probably take a drop, and then people who don’t own it step back in and pick it up. It has been in an up-and-down pattern. If you hold this longer-term, you will do really well. In the short term you may see some volatility.

BUY ON WEAKNESS

From the beginning of the year until last week this was doing phenomenally well. They came out with earnings, and although strong, the market became concerned that they were going to have to issue some equity in order to fund their cash flow. CEO recently indicated this was not the case. The lentil business is going to be a growing and an expanding one over the next 10 years. One of the world leaders as far as the distribution and packaging. This is one you could buy on a bit of a pullback. Sold his holdings, but is waiting for the technicals to steady out a little.

COMMENT

This management continues to deliver. Have done some phenomenal things as far as acquisitions go. The real driver in the last little while has been the ready-made sandwiches. They have a big sandwich assembly-line right now, and are trying to grow that out as fast as they can, because it is at close to full capacity. This is a big market right now in the quick service restaurant brand area. The stock is fully valued right now, and portfolio managers are looking to go other places and using this as a source of funds. You might see a bit of chop for the next little while. He still really likes this.

COMMENT

He still really likes this. The stock price really hasn’t done too much as a result of a lack of news flow. Have 2 really significant things they have worked on and completed in the last little while. One was with the Pacific Disaster Centre, a revenue producing project. Management indicated they have more opportunities to grow that business. The 2nd is Tabcorp, online gaming, out of Australia which he had expected to see revenue from now, which has been delayed because of Tabcorp not being able to assimilate well with Breaking Data. Understands they now have that sorted out and will start to get that up and running. Breaking Data will provide them with their information to allow them to get some revenue from that. The stock has been quiet, but the company is doing all the right things, and their technology continues to get vetted out by more and more sources.

PAST TOP PICK

(A Top Pick May 20/15. Down 54.76%.) A high flyer about a year ago, and probably got ahead of itself. However, they are doing all the right things. He was very close to making this a Top Pick because they continue to execute really well. They’ve opened 4 new clinics in the last 45 days, and have also opened their lab. They are hoping to have a run rate of about 80 million by the end of this year. He still really likes this.

PAST TOP PICK

(A Top Pick May 20/15. Down 43.37%.) Investors haven’t liked this sector too much, and until just recently, they weren’t as profitable as they would have liked. This was because of one division that they will be selling.

PAST TOP PICK

(A Top Pick May 20/15. Down 93.21%.) The company had some technology that allowed for compliance and payment processing technology. They started in the Bitcoin area, which didn’t work out very well. They then moved on to high risk areas, which would be considered gaming. Recently announced a strategic review of the company, so are looking at other avenues. Management had over promised and under delivered.

BUY ON WEAKNESS

Continues to deliver great results and has a nice sustainable dividend yield. It doesn’t happen very often, but if you see a pullback that is the time to step into this.

COMMENT

A company that has been extremely frustrating. It seems the company just can’t get out of its own way, especially when it comes to their auditors. Reported recently and missed their numbers by a fairly wide margin. Management could have done a much better job of guiding the market that they were going to be spending more money on the hospital that they had bought. This was followed next day by news that the auditors had not signed off on the financial statements, the 2nd time this has happened. That gets investors pretty spooked. Management needs to get a little more open with what they are doing, and auditors need to understand that the company is in the business of acquiring other businesses. He owns a small piece.

BUY ON WEAKNESS

Has owned this in the past. Just had some numbers out that were pretty good. Has a very healthy dividend, and their payout ratio is less than 100% which is nice. Expects they will continue to get a lot of work from infrastructure that is going to be upgraded over the next couple of years. Also, expects they will get some work on the Fort McMurray situation as well. If you could Buy on a pullback, that would be ideal.