Web Pages I know and use

Web Pages I know and use

http://quote.morningstar.ca/quicktakes/Stock/s_ca.aspx?t=DSG&region=CAN&culture=en-CA

My favourite area is key stats.

http://www.investorsguru.com/homepage.html

My favourite area here is news

http://stockcharts.com/freecharts/marketsummary.html

An excellent summary of the various segments of the market.

https://www.odlumbrown.com/research/fixed-income-research/hanks-blog

I always like to get a Bond’s guy take on things.

 https://www.brookfield.com/

Reading the various reports that Brookfield Asset Management distributes on their website gives me a unique look on what's going on in the world economy and how they intend to manage their affairs in relation to it...Far more valuable and insightful than reading the crap that's on the web's news sources.

Websites of Small Fund Managers I follow

https://www.lesterasset.com/Home

This is my personal favourite as I view the managers here to be kindred spirits with my current philosophy of investing.

https://www.penderfund.com/

Lots of solid information and advice for those who are willing to listen.

http://galibiercapital.com/

Stumbled on this one not long ago, Very transparent and open with their information.

 http://www.ldic.ca/investment-funds

 Michael B. Decter is the President and CEO of LDIC Inc. since 1998. I find the insights offered on this site make worthwhile reading.

Websites of Fund Managers with slightly more assets under management

https://www.libertyiim.com/category/articles/

Invests with more of a global view on things, with solid investing advice.

https://dginv.com/view

Terrific site…I read the founder’s book on investing. It’s one of the very best books on investing I have ever read.

Over the years a do-it-yourself investor develops his own resources which he can access over the web, sources of information that fit in with his own personal philosophy of investing in the markets. I don’t agree with everything everyone says here on their websites and that’s okay. When you invest long enough, you reach a point in time where you have honed your own personal approach while standing on the shoulders of those you have learned from.

Exploit Canada’s obscurity

Exploit Canada’s obscurity

Our goal is to find underpriced assets. Where should we look for them? A good place to start is among things that are:

-          Little known and not fully understood;

-          Fundamentally questionable on the surface;

-          Controversial, unseemly or scary;

-          Deemed inappropriate for “respectable’ portfolios

-          Unappreciated, unpopular and unloved;

-          Trailing a record of poor returns; and

-          recently the subject of disinvestment, not accumulation.

Howard Marks

Stephen Takacsy, CIO at Lester Asset Management, says the really deep discounts in Canada have little to do with industrial sectors and more to do with the size categories.

“No question, in Canada small- and mid-cap are trading at a huge discount, and that’s where you’ll see the differences — by market cap and also by liquidity. That’s where we get big discounts,” he said.

As an increasing number of investors opt for passive, index-based strategies, Takacsy says that small-cap stocks — and particularly those in Canada — are being ignored.

“They’re less liquid, so the big institutions can’t buy them and the ETFs don’t own them,” he said. “They’re not part of any basket. That’s where you find the bargains.”

Takacsy points, for instance, to one of his proudest investments: winemaker Andrew Peller Ltd. Five years ago, the stock was trading at multiples around 4x. Since then, it has jumped over 300 per cent.

Be wary of the herd

We tend to think of modern markets as being ultra-efficient, led by supercomputer algorithms that can spot valuation gaps and exploit them instantly — but that’s far from the truth.

Even obvious discounts are often ignored for months or years, because the market tends to move like a herd, says Takacsy, with capital flowing in and out of regions as macroeconomic conditions change.

“Foreign investors get hot and cold on Canada,” he said. “If it’s not doing well, they pull their money out in a panic. And then when it is doing well, the plow back in.”

What that means for a bottom-up value investor is that cheap stocks can stay cheap for a long time, but eventually some major event turns the tide.

Tax cuts and deregulation in the U.S. have ignited markets to the south in the past year. Investors in Canada should be on the lookout for similar indicators — like rising commodity prices, surprise rate hikes or favourable trade deals — that will attract investment to discounted equities.

Source

Financial Post

Stock Idea…K-BRO Linen Inc.

Stock Idea…K-BRO Linen Inc.

Symbol : KBL

Exchange: TSX

Market Cap : 399.3 Million

Revenue : 171 Million
Three Year Revenue Growth : 17.9 %
Investment Type : Small Cap Value/Growth

Price/Earnings : 71.1

Forward P/E : 37.3

Price/Book : 1.9

Price/Sales : 2.0

Price/Cash Flow : 21.4

Price : 38.00

Dividend Yield : 3.19
Investment Stem : Stephen Takacsy of Lester Asset Management

K-Bro Linen Inc is a Canada-based owner and operator of laundry and linen processing facilities. The Company provides laundry and linen services to healthcare institutions, hotels and other commercial accounts. The Company's services include the processing, management and distribution of general and operating room linens (K Bro Operating Room (KOR) Services), including sheets, blankets, towels, tablecloths, surgical gowns and drapes, and other types of linen. Other types of processors in the Company's industry in Canada include independent privately-owned facilities (small and single facility companies), public sector central laundries, and public and private sector on-premise laundries (OPLs). Its healthcare customers include hospitals and long-term care facilities. K Bro Linen Systems Inc is the subsidiary of the Company.

The dreaded metrics from Morningstar…

http://quote.morningstar.ca/Quicktakes/stock/keyratios.aspx?t=KBL&region=CAN&culture=en-CA&ops=clear

The company’s website…

http://www.k-brolinen.com/

Canadian leader in laundry and linen services to the growing health-care and hospitality industries. High barriers to entry and limited competition. K-Bro has 30 per cent market share in Canada with long-term contracts at high renewal rates. It is the lowest cost producer and is nearly finished a major capex program to build new plants in Ontario and B.C., which will increase capacity and lower costs and allow K-Bro to widen its lead over the competition. Recently acquired Fishers Topco in Scotland. Stock has come down due to transition costs of new plants and minimum-wage increases, which the company can pass on to most customers within a year. We expect improving margins as costs are absorbed and K-Bro wins more business. It is now a great buy at 9x 2009 EBITDA. Pays a 3.3 per cent dividend.

They have been investing heavily in new plant and equipment. This is a great entry point. They are lowering their costs. They have 30% of the Canadian market and the next biggest player is very weak. There are one time start up costs.  This is when you want to invest in these kinds of companies. You get a great dividend while you wait for higher margins.

Update on K-BRO Linen Inc...as of June 14 2018

Canadian leader in laundry and linen services to the growing health-care and hospitality industries. High barriers to entry and limited competition. K-Bro has 30 per cent market share in Canada with long-term contracts at high renewal rates. It is the lowest cost producer and is nearly finished a major capex program to build new plants in Ontario and B.C., which will increase capacity and lower costs and allow K-Bro to widen its lead over the competition. Recently acquired Fishers Topco in Scotland. Stock has come down due to transition costs of new plants and minimum-wage increases, which the company can pass on to most customers within a year. We expect improving margins as costs are absorbed and K-Bro wins more business. It is now a great buy at 9x 2009 EBITDA. Pays a 3.3 per cent dividend. We recently added to our position at $35.

Stock Idea…Altus Group Limited

Stock Idea…Altus Group Limited

Symbol : AIF

Exchange: TSX

Market Cap : 1,1 Billion

Revenue : 478 Million
Three Year Revenue Growth : 14.9 %
Investment Type : Mid Cap Value/Growth

Price/Earnings : 10.4

Forward P/E : 20.0

Price/Book : 2.9

Price/Sales : 2.3

Price/Cash Flow : 20.7

Price : 29.30

Dividend Yield : 2.07
Investment Stem : Stephen Takacsy of Lester Asset Management

Altus Group Ltd provides independent advisory services, software and data solutions. The Company's segments include Property Tax Consulting (Property Tax); Research, Valuation & Advisory (RVA); ARGUS Software; Geomatics, and Cost Consulting & Project Management (Cost). The Property Tax segment performs property tax assessment reviews and appeals, and assists with property tax compliance filings. The RVA segment performs real estate valuations, litigation support, financial due diligence, research and real estate-related services. The ARGUS Software segment offers software and solutions for analysis and management of commercial real estate investments. The Geomatics segment provides geomatics solutions, such as geographic information systems, digital mapping, remote sensing, three-dimensional laser scanning and orthophoto maps. The Cost segment provides construction cost planning, loan monitoring and project management services to construction companies and financial institutions.

The dreaded metrics from Morningstar…

http://quote.morningstar.ca/Quicktakes/stock/keyratios.aspx?t=AIF&region=CAN&culture=en-CA&ops=clear

The company’s website…

http://www.altusgroup.com/

Global provider of software for commercial real estate management and consulting services for property taxes and appraisals, used by banks, pension funds, insurance companies and real estate owners. Altus is transitioning from a consulting services company to a technology company as it migrates clients to its analytics software and integrates more of its services onto its platform in order to cross-sell these. Strong organic growth from acquisitions. Expect multiple to expand as recurring licence revenue from their software platform grows. The stock has pulled back as Altus is investing heavily in growth. Market cap is $1.2 billion. Altus pays a two-per-cent dividend.

A real estate advisory consultant firm, and also trying to build end to end software service solutions for real estate data and real estate analytics. This is what the markets are really starting to get interested in now. A higher margin business and recurring revenues.
Mawer New Canada Fund is a major stakeholder.

Stock Idea…Sienna Senior Living Inc.

Stock Idea…Sienna Senior Living Inc.

Symbol : SIA

Exchange: TSX

Market Cap : 1,1 Billion

Revenue : 558 Million
Three Year Revenue Growth : 18.7 %
Investment Type : Mid Cap Value/Growth

Price/Earnings : 45.7

Forward P/E : 31.8

Price/Book : 1.9

Price/Sales : 1.6

Price/Cash Flow : 14.6

Price :16.89

Dividend Yield : 5.33
Investment Stem : Stephen Takacsy of Lester Asset Management

Sienna Senior Living Inc. is a Canada-based company, which is engaged in serving the range of independent living (IL), independent supportive living (ISL), assisted living (AL), memory care (MC) and long-term care/residential care (referred to as LTC) communities. The Company's segments include LTC business, Retirement, Baltic, Corporate, Eliminations and Other. Its LTC segment includes over 30 owned LTC homes and the management services business. Its Retirement segment includes approximately 10 owned retirement residences (RR) communities. Its Baltic includes seven Baltic properties in, which the Company's interest is in the Nicola Lodge and Pacific Seniors Management General Partnership (PSM). The LTC segment in Ontario and British Columbia consists of various private, public sector operators and not-for-profit organizations offering a range of services. The Company offers a range of services, such as management, consulting and educational services.

The dreaded metrics from Morningstar…

http://quote.morningstar.ca/Quicktakes/stock/keyratios.aspx?t=SIA&region=CAN&culture=en-CA&ops=clear

The company’s website…

https://www.siennaliving.ca/

Sienna Senior Living owns over 100 long term care facilities and retirement homes in Ontario and B.C. It’s the second-largest publicly traded retirement residence owner after Chartwell. The stock has great defensive characteristics in this volatile market. The dividend yield is 5 per cent.
Rising interest rates should not impact this stock as rental leases are short-term in nature and can be adjusted for inflation. It should be steadily increasing its net operating income and adjusted funds from operations (AFFO) per share, and growing dividends over the long run. Sienna was recently added to TSX Composite Index.

This used to be mostly long-term care but is now 50/50 retirement housing, which is like leasing apartments. Prices will go up with interest rates and inflation. The dividend is safe. This stock barely budged over the market turmoil earlier in the year. Their biggest competitor, Chartwell, trades at a much higher multiple.

If you are a retiree looking over a steady income stream without too much volatility this stock might fill the bill. An interesting investing theme as well based on an increasing demographic.

It’s a Lovely Day in the Neighbourhood

It’s a Lovely Day in the Neighbourhood

“If I was running $1 million today, or $10 million for that matter, I’d be fully invested. Anyone who says that size does not hurt investment performance is selling. The highest rates of return I’ve ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers. But I was investing peanuts then. It’s a huge structural advantage not to have a lot of money. I think I could make you 50 percent a year on $1 million. No, I know I could. I guarantee that.
The universe I can’t play in has become more attractive than the universe I can play in. I have to look for elephants. It may be that the elephants are not as attractive as the mosquitoes. But that is the universe I must live in.”

Warren Buffett, discussing the advantages of small-cap stocks

“A baseball player never really gets paid, no matter how many homeruns he hits or what his batting average is, unless he gets to the big leagues. Then he’s guaranteed to make a lot of money. But in the fund business you can find a minor league where you can hit for a better average, because that’s what you’re paid on.
 I remember one of our guys taking us into Korea in the early 1990s, and the market was so inefficient that it was a gold mine if you knew what you were doing. One of our Tiger funds today focuses on gold – a league that is inhabited by some of the crazier investors out there – and it just has a phenomenal record. They know more about gold than anyone else in the world and they just kill all the rest. 
My point is that to be successful in this business, you don’t have to be better than everybody everywhere, just better than everybody in the league in which you play, it’s maybe today more difficult to find those inefficient areas, but it’s not impossible.”

Julian Robertson, Tiger Management


So where is this neighbourhood? It’s the non-resource small to mid cap sector in the Canadian markets. That’s the market I like to hang out in. With the gathering momentum of interest in passive investing along with the explosion of specialized ETF’s, a rift is developing as companies not deemed liquid or big enough to be to put into an ETF are becoming mispriced. This is creating a market inefficiency in the fore-mentioned sector of the Canadian stock market.

Two fund managers I follow have already talked about this. David Barr of PenderFund Capital Management who sometimes is a guest on BNN (a Canadian Business News Network) and Stephen Takacsy of Lester Asset Management who often appears on that network’s phone in talk show. Both fund mangers are value-orientated buy and hold investors but insist on manageable growth as well. They like to focus on the non-resource small and mid cap markets in Canada. They concentrate on the company’s business model with an emphasis on evaluating the senior management of those companies. In other words, they are bottom-up investors. Mr. Barr who has a private equity background likes to concentrate on the tech sector while Mr. Takacsy focuses more on traditional businesses but who will invest in tech when he sees the opportunity. Both seem to gravitate to catalysts (a change in the circumstances of the company creating an opportunity for a mis-pricing). 

I usually pay attention to what they have to say on BNN and on their fund’s websites. It beats the hell out of listening to the financial media drone on about the day to day noise of the markets.

It's lovely day in the neighbourhood

Resources

https://www.bnnbloomberg.ca/

https://www.lesterasset.com/Home

https://www.penderfund.com/

Stock Idea…Intertape Polymer Inc

Stock Idea…Intertape Polymer Inc

Symbol : ITP

Exchange: TSX

Market Cap : 1.1 Billion

Revenue : 928 Million
Three Year Revenue Growth : 14.8 %
Investment Type : Mid Cap Value/Growth

Price/Earnings : 13.2

Forward P/E : 13.1

Price/Book : 3.2

Price/Sales : 0.9

Price/Cash Flow : 9.9

Price : 18.13
Investment Stem : Cheap Small Cap Screen 2
                                Galibier Canadian Equity Pool

Intertape Polymer Group Inc manufactures and sells a variety of packaging products. The firm's primary product categories include tapes, films, and woven coated fabrics. The company's tapes include pressure-sensitive and water-activated carton sealing tapes, and flatback, duct, double coated, foil, electrical, and filament tapes. Intertape's film products include stretch wrap, shrink film, air pillows used for protective packaging, and packaging machines. The woven coated fabrics include building and construction products and specialty fabrics. The majority of revenue comes from the United States.

The dreaded metrics from Morningstar…

http://quote.morningstar.ca/Quicktakes/stock/keyratios.aspx?t=ITP&region=CAN&culture=en-CA&ops=clear

Article from Seeking Alpha on the company as per Jan 2017

https://seekingalpha.com/article/4036611-intertape-polymer-group-turnaround-roll

The company’s website…

https://www.itape.com/

Intertape Polymer Group Inc. is a recognized leader in the development, manufacture and sale of a variety of paper and film based pressure-sensitive and water-activated tapes, polyethylene and specialized polyolefin films, woven coated fabrics and complementary packaging systems for industrial and retail use. Headquartered in Montreal, Quebec and Sarasota, Florida, the Company employs approximately 2,600 employees with operations in 19 locations, including 13 manufacturing facilities in North America and one in each of Europe and Asia. 

Showed up on my 2^nd cheap small cap screen…currently making acquisitions for the future. Recently gave guidance for 10% revenue growth and 15% earnings growth in 2018. They have a 5-7-year plan to double earnings. Good cash flow with a dividend yield of 3.93 percent. Have some good institutional backing. Appears to offer good value over the long term and that's the only timeline that matters to me.

“The stock market has done nothing this year.”

“The stock market has done nothing this year.”

Above heading reflects the sentiment of most investors today. Bombarded by the endless black headlines, investors continue to fret and sweat fearing that the market will reach new lows. Clearly, these are the professional S&P watchers and know nothing about “the market”. Little do they realize that last Friday, the following Advance-Decline Lines hit record highs again: SPX, NDX, MID-CAP, and SMALL-CAP. More importantly, the NYSE Advance-Decline Line Cumulative and the NYSE Common Stock Only Advance-Decline Line also closed at new record highs along with the Cumulative Advancing Volume-Declining Volume Index. These internal measures reveal the real health of the market and are far more informative and hence, more important than the S&P. What these indicators are telling investors is that “the market” bottomed in early February as I’ve said and the bull market has resumed. Moreover, as the market has yet to register overbought readings and sentiment if far from euphoric, short-term risk is limited and further gains lie ahead. When the major market indices reach new highs, the horses are long out of the gate as they already have.

Leon Tuey via Jeffrey Saut