samedi 1 juillet 2017

My picks for 2017, 6 months later

On january 2nd, I wrote a post titled "My picks for 2017".

A lot of people submitted their picks too. With 48 comments, I can't look back at every suggestion made. However, I invite everybody who wrote something to share their performance in the comment section.

Here's my picks and the performance of each stock:

1- Constellation Software (softwares); UP 12%
2- CGI Group (consulting services); UP 1%
3- Alimentation Couche-Tard (convenience stores); UP 2%
4- Linamar (auto parts); UP 9%
5- Knight Therapeutics (healthcare, but mostly a full-cash company for now); DOWN 3%
6- Tucows (Internet services); UP 47%
7- United Therapeutics (healthcare); DOWN 10%
8- Mohawk Industries (carpets and ceramics); UP 20%
9- Disney (movies, thematic parks, ESPN and more); 0%
10-LKQ (auto parts and cours à scrap); UP 6%

Average return: 8,4%
S&P/TSX: -1,4%

The S&P/TSX if the best benchmark for me because my portfolio is almost 50% US and 50% CAN. I've beaten the S&P/TSX by almost 10% over the last 6 months, which is a good performance.

There's a guy who achieved a pretty good performance so far. At the time he wrote his comment, I thought he had something. Now, 6 months later, I realize he was right. And that's where I'm heading more and more as time passes: great companies that compound even if they're a little expensive.

Here's his comment: 

Quality investor:

"Compounders almost regardless of valuation"

1. BRK.B
3. V
4. MA
5. NVO
7. TJX
9. FDS
10. FB

What about you? 

21 commentaires:

  1. "Compounders almost regardless of valuation"

    The above quote was the most memorable for me as well from that whole thread with 48 comments/entries.

    I think this halftime exercise is a good thing. It's good to look back on the first six months in order to see what worked and what did not work out so well.

    I had three similar picks with the penetrator portfolio: up 12% down 3% up 47%

    For my other seven picks I want to show the dec. 30, 2016 price and the june 30, 2017 price (in case my math is off):

    mck $140 to $164 up 17%
    fizz $51 to $93 up 82% $4.15 to $3.13 down 25%
    patk $76 to $73 down 4%
    payc $46 to $68 up 48%
    supn $25 to $42 up 68%
    aobc $21 to $22 up 5%

    My biggest mistake is one that sophisticated investors do not make: I invested in a mining company. Avoid investing in a hole in the matter how undervalued it seems. There's so many risks and fewer rewards in owning commodities type businesses (especially mining companies).

    I want to make an e-book recommendation for all your loyal followers. If you can spare the $1 american or about $1.30 canadian, Penetrator's friend Robin Speziale (author of Market Masters) has a new ebook available on amazon called:

    CAPITAL COMPOUNDERS: How to beat the market and make money investing in growth stocks.
    Read it. If you're too lazy to read books...go to the back of the book and take down his list of 25 great growth stocks. That alone will be worth thousands of times your $1 investment in the years ahead.

  2. Here’s what I’ve come up with so far with my own picks…Dec 30 2016 through June 30 2017…

    GUD……………down 4.19
    TNC……………up 17.25
    BPY.UN……up 7.64
    SVC……………up 52.67
    CXI……………down 14.05
    HWO……………down 19.06
    CBL………….down 23.19
    PNE……………down 31.86
    BBU.UN……up 8.71
    LGT.B… …down 0.85

    Ave Return…down - 0.69

    I own all of the above holdings in my own personal portfolio which I hold in my RRSP with the exception of LGT.B.

    Interesting…I seem to be treading water so far this year but I still have high hopes for my stragglers. A few comments about my under achievers…

    There is a privatization process underway with CBL (the controlling shareholders now hold 68 % of the float) and I have a feeling the price is being managed down to shake out the weak hands, that being the case I’m going to hold on and hopefully my patience will be rewarded.

    I have held PNE since Dec 2014 and am still underwater on the stock. I think I got in too early. I intend to keep holding it as the management team are excellent capital allocators and tend to buy their assets at the low end of the capital cycle and hold for the long term. I’m trying to follow their lead.

    I’m convinced that CXI is a keeper especially for the long term, now that they have their long awaited bank license. This will provide them with a valuable moat around their business in the years ahead. Again I’m a believer in the management team.

    The management team at HWO like PNE are excellent capital allocators and think in terms of years not months. They are not concerned with quarterly results but with enhancing shareholder value for the long term. They picked up a lot rigs last year when the price of oil was at its low. Again they have a good sense of investing when the capital cycle is low.

    If I sound like a broken record about talking about the long term its only because that’s what the market has taught me over the years, the value of being patient. I’m still working on it. Now if I could only transfer that over to my chess game.

    1. You did a little better than the TSX/SP500 which is still good!

  3. Courtesy of

    The 10 Best S&P 500 Stocks Through 2017’s First Half

    If you're top ten in a universe of 500 stocks, you're in the top 2%. Of course, there's no guarantee that these ten stocks continue outperforming. Here's the link:

  4. On that list, Micron is a constant up and down stock. It will go up 50% this year and go down 80% next year. Total speculative stock.

    1. Micron is one of the trickiest cyclical stocks to invest in. Everything you learned about investing is turned on its head when it comes to Micron. I have made money with Micron and I credit one thing to my success: dumb luck.
      If you buy Micron when it is going for 5 or 6 times next year earnings, you're likely to lose money. If you buy Micron when it is losing money quarter after quarter then you are likely to double or triple your money two or three years down the road. The problem is that they have to spend BILLIONS in market cap every 2 or 3 years to keep up to Samsung in the race for better and faster memory chips. Billions in extra expenses have a way of taking a company going for 6x next year earnings and turning it into a company that just bleeds red ink. But the strange thing is that the time to buy is when things look hopeless and the time to sell is when Micron seems like an unbelievable bargain. The good news for Micron is that there's only two other major manufacturers of memory chips in the world. The bad news is that they are both in South Korea and one of them is Samsung. Their business philosophy is to take market share even if they do not make a profit. Good luck competing with Crazy Sammy *Samsung* and SK Hynix...and god help you if the Chinese enter the industry (they tried to buy out micron for about $20 per share during the last downturn).
      There's one event that can make Micron shareholders extremely rich. If you turn on your computer or television and find out that Trump is bombing North might want to buy a lot of shares of Micron. The North Koreans would likely reply with a lot of artillery fire that may ruin the main factories of Micron's competition in South Korea. We may find it hard to buy a new computer or smart phone for lack of memory chips if that happens. And Micron shareholders may get very rich. :-)


      Samsung plans $18.6 billion South Korea investment amid chip boom. Good luck keeping up, Micron. lol

  5. Thanks for highlighting my picks. 6 months is a short time to judge investment decisions but I think owning (not trading) compounders is a long-term winning strategy.

    A few good things about this strategy:

    1) You don't have to pay capital gains tax until you sell which should be rare.
    2) These durable companies hold their value better during a recession, and may even gain market share. Cyclical, high-debt companies are the first to exit when unfavorable conditions arrive.

    The compounders that I own have increased their intrinsic value (i.e. earnings) well this year so far. I hope they will continue to do so in the future.

    I have also found other (relatively) smaller compounders that I will discuss on my blog when I get more time. But I haven't really found any cheap ones.

    If anyone is visiting New York and wants to meet up to exchange ideas, let me know. I am always in the mode of discovering fellow capitalists and learning new insights from them.

  6. Angelo, what are you current holdings?

    1. I am making big bets on:

      1. Savaria ( (they made an acquisition in America and will be adding to earnings and getting a huge foothold in the American market now).

      2. I am holding and ADDING to my position in Tucows (once the enom acquisition earnings get added in, you are looking at a stock that is going for LESS than 15x next year earnings. It's very likely they start making at least $4 per share (u.s.) as of next year.

      3. Supernus (SUPN) is a PROFITABLE small cap bio pharma with a very high ROE and an amazing pipeline. One of their drugs was recently approved as a way to prevent migraines. They are working on solutions for epilepsy, bi polar disorder, migraines, attention deficit disorder and other such conditions.

      4. I have even taken to heart the quote "compounders almost regardless of valuation" and made a bet on Shopify. I believe their revenue growth and dominance in their niche of e-commerce is so huge that years from today, no valuation we can give SHOP today will come close to what this company's market cap will be 5 years from today.

      5. If you look at the beverage or soft drink market you'll see a bunch of companies that have flat earnings or slightly declining earnings. Then you will notice a little company called National Beverage (FIZZ) that grew their earnings by 73% in the last year. They are behind a top selling CARBONATED, ZERO CALORIE, FLAVORED water that is selling like crazy in America called LaCroix. The health conscious millennials and the aging boomers need to drink something healthier than coke and pepsi. LaCroix seems to be the choice of more and more Americans. It has the bubbles and a wide variety of natural flavours but no calories, no sodium and no aspartame.

      I'm looking at companies that are capable of doubling their earnings in the next 2 to 5 years. I cannot get such explosive earnings gains investing in a company with a $200 Billion market cap. At the same time, I insist on companies with zero or very little debt. A very strong balance sheet allows a company to grow earnings simply by buying other companies (like Tucows and Savaria just did most recently). Supernus also has a very strong balance sheet and could buy another company if they were not busy with their own huge organic/internal growth. Of course, Shopify has a billion in cash and continues to buy other companies that may be competitors or may add value to what they offer (I think they did 4 acquisitions in the last year).

      I respect people investing in rock solid compounders like Visa, Mastercard and Constellation Software. I just want smaller companies with much greater growth potential that's just around the corner. As the earnings explode will the stock price of these little companies.

    2. Thanks, I respect the comments you post Angelo. Do you have your own blog?

    3. I do not have my own blog. I may consider writing one in the future. I'm not very tech savvy and do not know the best way to go about setting up a blog. Recently, I tried writing for Seeking Alpha as a contributor. They found my articles a little "thin". It seems to me like they want 10 to 20 hours of research and analysis work so they can give you... $50? LOL. I would gladly write for free but I do not need a boss or an editor putting me through hoops. LOL

  7. Based on this morning’s prices and just clicking on the stock and the 6 month return:

    1) Intertape Polymer Group - -0.29%
    2) Toromont Industries - +12.2%
    3) CGI Group - -0.8%
    4) Canadian National Railway - +14%
    7) Tucows - +39.8%
    3) Savaria Corp - +45.31%
    6) Kinaxis - +30.3%
    8) K-Bro Linen - -3.85%
    9) Knight Therapeutics - -0.39%
    10) Grande West Transportation - +78.67%

    Average return: 21.5%

    1. Riley,

      You registered excellent returns. Your returns were even higher a bit earlier in the year. For example, for a while there, Grande West Transportation was up over 100% and Tucows has taken a bit of a beating with money going out of tech stocks and into the financial sector most recently. I wish I had invested in Savaria sooner. It's a recent investment for me.

      Have you added any new positions? Are there some stocks you are more bullish on than others from your picks?

    2. Hey Angelo, no, I haven't been adding lately. I had a great run with Constellation Software and moved out of it but I like what they're doing and I am chewing on the idea of jumping back in. I like CGI Group and am hopeful they go on a run soon, same as Intertape Polymer. I added Richelieu Hardware to my list of stocks to watch in addition to Norbord and Stella Jones. I will look to educate myself better on what they're up to and how things look moving forward as a I have a bit of capital I'm looking to deploy.

      Been pretty quiet on my trading front though -


  8. average return: 21,33% (excl div)

    1. European Reliance 87,5%
    2. Clarke 14,46%
    3. Velcan Energy 11,14%
    4. Sofina 0,92%
    5. Fonar 44,91%
    6. Mongolian Growth Group 9,09%
    7. Pardee Resources 10,44%
    8. Altamir 27,34%
    9. Daejan Holdings -0,24%
    10. Fundsmith Emerging Equities 7,74%

    Altamir and European Reliance are now my n°2 and n°3 position in my portfolio, due to the run-up. Big fan of Fonar.
    My highest conviction pick (and biggest postion) is in Siem Industries, right now.
    Best capital allocators in a beaten down industry?

  9. I was looking forward to hearing how everyone's picks did. Its always interesting to see other investors perspectives and their picks that I may not have even heard of. So my 10 selections did pretty well overall but SHOP definitely did all the heavy lifting. If not for SHOP my average would not be that great. Here's my results
    ITC: -3%
    CRH: -14%
    TIO: +20%
    GUD: -3%
    OTEX: -1%
    PBH: +37%
    GILD: -3%
    SIS: +41%
    TOY: +16%
    SHOP: +105%

    Total: 19.5%

  10. Hey, what do you think about CRH, are you still holding? what do you think about what has been going on recently with the share price?

  11. Uggh, what a shitty day yesterday was! My average is in the $4's so I'm still up 15% but I was up almost 200% at one point. I'm disappointed since I still feel the fundamentals are strong even if reimbursement rates are lowered. There was still a lot of negative sentiment around the stock since that short report which I believed would go away once earnings are released, but this will keep the stock down for a while. I haven't sold and I will wait to see how things go after earnings later this month, I feel this is over blown. In hindsight I should have sold some above $10 but the fundamentals were improving, they have quality mgmt, and a growing demographic.

    1. yeah, my average is around 5.20, already down about 10%. May do what you said and hold till earning to see if I can get above water. Still like the long-term outlook but right now there is to much buzz around the stock than my liking. Good luck to you.