jeudi 23 juillet 2015

Portfolio review - july 23th 2015

The Penetrator Portfolio is up about 20% this year, which is pretty good given the fact that the performance of the S&P/TSX has been flat so far.

What are the big winners of my portfolio since the beginning of the year? Let's see:

Nobilis Health is up 143% (precision: I didn't have shares of NHC at the beginning of the year).
Concordia Healthcare is up 120%.
Valeant is up 88%.
Constellation Software is up 65%.

The other stocks didn't do bad (except for Home Capital Group and Callidus Capital) but they didn't achieve such a spectacular performance.

On this day, Valeant released excellent results. The stock has been up about 6% today and it may continue to go up in the next few weeks. Given the rate of acquisitions and the gift Michael Pearson has for integration, I'm pretty sure that Valeant will be a 400$ stock at the end of the year (330$ today).

The next days will bring us a lot of results and the picture of my portfolio may change a lot.

Ok now, here's my portfolio.

Canadian stocks:

Valeant (healthcare): 14,7%
Constellation Software (information services): 9,8%
CGI Group (consulting services): 7%
Couche-Tard (convenience stores): 6,7%
Concordia Healthcare (healthcare): 5,7%
Cipher Pharma (healthcare): 4,4%
Nobilis Health (healthcare): 4%
Home Capital Group (financial services): 3,2%
Knight Therapeutics (healthcare): 2,7%
Callidus Capital (financial services): 2%

US stocks:

Mallinckrodt (healthcare): 9%
Portfolio recovery and associates (financial services): 8%
Gilead (healthcare): 7,9%
Dollar Tree (1$ stores): 4%
Ross Stores (cheap clothes): 3,6%
Dorman Products (auto parts): 2,6%

Cash: 4,8%

mardi 14 juillet 2015

Home Capital is sinking... and I don't wanna swim

Have you seen the incredible drop of Home Capital since yesterday? It's been pretty spectacular: about 23% down since monday morning.

Why? The company has announced that the earnings would be flat since last quarter and would be a little down since same quarter a year ago. About 2% down which is not too scary. The sales are a little more scary because, even if earnings look flat, the sales are down a lot.

The growth at Home Capital seems to have stopped. When will it resumes? Surely not at short term. It worries the market and it worries me a bit, but it's still a great company and the metrics are good.

What do we have now? A company for which:

Average ROE last 5 years: 25
Actual PE ratio: 7,6
Bottom PE ratio last 5 years: 9
Actual Dividend: 2,7%
Price to book value: 1,6 times (which is very low for such a great business)

It looks a bit like IBM: High ratio PE/ROE, high dividend (on a relative point of view), very well managed business that has a long history of rewarding shareholders. And I don't see how it could get much lower from here. Few large companies have such a low PE ratio.

It may be the time for the company to buy back massive amount of stocks or to be bought.

Should you buy? I don't know (I never really know). For the short term, forget it. For the long term, it may be an excellent moment to get some shares and a nice dividend which may grow along the way (your 2,7% dividend may easily become a 4% dividend in about 5 years).

The company still aims at about a 10% earning growth each year which is a nice growth for such a low price.

Check it out. 

dimanche 12 juillet 2015

The nightmare is over

Did you ever have a boss who disliked you and most of the people with whom he worked?

That was my case until recently and I was so upset that I thought very seriously about retirement or any kind of reorientation. I didn't feel safe at all because that guy moved everyone around him. In about a year, he moved about 50 people and he said some nasty things to me about others and some other nasty things about myself to me directly.

Like: "Out of ten, I'd give you 4/10 for your intellectual capacities or 3/10 for your team management. "

That was pretty fucked up: the guy who didn't know what was the name of the members of The Beatles saying to me that I lack intelligence (OK, knowledge and intelligence aren't the same) or the guy who couldn't get along with anybody telling me that I couldn't manage a team.

I'm pretty happy to have gotten a better job with nice people. I'm still a little upset about all the things he said to me. But well, I'm back to a more normal attitude: I still want to retire as soon as possible, but my mind is way lighter now. In other words, I can breathe easier now.