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Had this in his Growth portfolio, and it just didn’t work out. A situation where a company gets oversold. It will probably have a good January bounce because of all the tax loss selling that has probably occurred over the last couple of weeks or months. He is having a hard time with this. Would like to support it on valuation, but in terms of execution it has issues with payor codes changing, and the revenue growth is largely beyond the company's control. They haven't handled the past year very well. He would put this in the "OK" category, but with 10,000 public companies to choose from, it is well low on his list.

This is driven by the economy, sales and web transactions. Has some very, very good monopolistic situations in Canada with a couple of very, very large customers, including Canada Post. It probably has some potential to go from here and will have a good 2018. With giant contracts, a lot of investors come on board in anticipation of those contracts. As they start hitting the revenue growth and earnings growth, some investors may start exiting, so doesn't think you are going to see as great a run over the next 2 years, as there has been in the past 3, but it will have a decent year. A nice solid company.

Has beaten this up for years, because they’ve issued a lot of equity. Even with that, their debt has been higher than he has liked. It hasn't really treated shareholders properly in a sector that is not doing very well. One of his least favourite companies in the whole sector. He doesn't see a big reason to own it. However, whenever oil decides to go up again, it will be a "go to" name. It will rally hard when oil goes, but he would rather have a consistent company that is showing better growth and treats their shareholders better.

Has been hearing about their real estate value for years. The hedge funds are saying this $10 stock has $31 of value if they do something with the real estate valuation. He is not sure how long investors are willing to wait. Meanwhile, the retail business and industry are not doing very well at all. They really have to get it together. Either do something with the real estate, or not. He doesn't like recommending companies that "might" do something.

Investors have considered this as ridiculously expensive for 10 years now. Everyone talks about the valuation, and meanwhile they continue to grow and continue to execute well. They continue to increase their market share and continue to make investors money. He likes it quite a lot and has just added it to one of his portfolios. At some point they will hit the saturation limit in Canada, and are starting to make inroads into other countries. At some point, a larger entity will probably come in, in order to take over the Canadian dollar market, and guess who they are going to buy. A really good opportunity over the next 3-4 years. As a growth story, this is one of the best in Canada.

The issue is debt. It is massive. If you look at their 12-month cash flow, it was about $67 million in cash flow for the last 12 months, and the debt is over $1 billion. Those numbers just scare him to death. That wouldn't be so bad if the sector was surging and all the oil/gas producers were massively increasing budgets. He would be very, very cautious on any service or drilling company.

They've had a tough go recently. They missed earnings and sales have been disappointing. Also, doesn't like their balance sheet much, right now. Doesn't think it’s in jeopardy of going under, but they really have to turn around their earnings growth picture, and improve operating performance and drive down costs to get investors interested again. Thinks it is probably dead money for a period of time, until they get 3 or 4 quarters of consistent results. If you own, he would suggest getting out of it and looking at it later when everything looks better.

Average down? As a general rule, he doesn't ever like averaging down. Mathematically, it has been proven it’s not a good strategy. You have a situation where investors are not liking the company. There are always other investors that are going to throw in the towel after you’ve averaged down. This is interesting, because the company was up for sale in the $8-$9 range many years ago, and is actually quite a well-run gas company that continues to hit new lows, and we are in the middle of tax loss right now, and he thinks there is an opportunity. Wouldn't be really too worried if you bought more, as long as your position limit is within reason. A great company, but in the wrong sector. If you have a few years, it is probably safe to Buy.

Has had an "up and down" year, and a lot of people are concerned, partially about the "pay in" system in the US medical market. They have surgery centres in the US. A nice little company, and the dividend is well covered by cash flow, but investors are concerned about growth potential and changes to the system. It may be a victim of "there is more excitement elsewhere". Well run and well-managed. He would view this as an income story, not 100% secure income and a relatively small company. Dividend yield of 8.3%.

The valuation is really low. It is below 10X earnings and the dividend is relatively attractive. The growth rate is really quite high. As you get job growth in Canada, you'll get some mobility in the workforce, which helps the furniture business as well. Also, as you get economic growth in Canada, you lose less money on your higher risk loans you are making on the easy financial side. Conditions are really, really quite good for them. Doesn't think it will ever get to a 20X earnings multiple, but thinks it is worth more than the current multiple. There is some good potential upside.

From an operational point of view, this is a decent company. They have decent assets. However, there is a very high debt level, which is probably the main reason why it has been getting destroyed on the stock market. For investors in a struggling sector, this is just not what they want. He wouldn't recommend this because of the debt. He would rather make less money on less risk on something else.

A software supply chain management company. The stock went from about $90 to about $60 after they lost a customer this year. Investors thought the game was over. One customer came around and they had a good quarter. Business is really, really quite strong now. He likes that they are seating the global market. They get a customer that buys 50 or 60 seats for employees, likes the solution and then comes back and buys more and more. These are multinational corporations with the potential for giant, giant orders as they expand. The company is sitting on $150 million in cash. It's not cheap, but is one of the companies where you have great growth and a great balance sheet with a great management team. (Analysts' price target is $87.50.)

Steve Hudson is an entrepreneur who has grown and sold companies before. This is trading below its NAV, and is buying back stock. They had an investor presentation this week basically saying look for the 1st quarter to be pretty exciting in terms of acquisitions. They’ve made some acquisitions and dispositions. Has a great balance sheet. Thinks they will be very, very active. A leasing/finance company with low interest rates in a strong economy, trading below its asset value. A pretty safe bet for the next year. Dividend yield of 1%. (Analysts' price target is $5.00.)

Got beat up by the Short sellers, but their business is good. They've never missed a quarter and have almost $1 billion in cash. They are going to be profitable next year, and the earnings are going to grow out about 400%-500% on a per share basis. They are now the dominant player in facilitating online merchants. Has a tie with Amazon (AMZ-Q), which is always risky, because of Amazon's power. The Short thesis was that it was a multilevel marketing company, i.e. if I joined Shopify, and got you to join, I would get paid. That was simply wrong. A US hedge fund just picked up 8% of the company. (Analysts' price target is $151.00.)

Market. He’s been very Long this market for a while, and for asset allocation model 70/30 to fixed income, he is right on the edge in terms of his swing for 90% equity. Stocks are expensive, but are not expensive relative to bonds, apartment buildings, a lot of different private equity alternatives. If you can find a stock with a 11 or 12 PE with a 4% dividend and visibility growing at 10% and EPS, there is still lots of opportunity. As a protection strategy, he is using the options market to squeeze out yield on both sides, using Calls or puts.