From the Desk of Irwin Michael – August 14, 2015

Over the past month numerous companies have reported their latest corporate earnings results. This week, we will highlight the earnings of two long-term ABC Funds holdings. For instance:

Polaris Materials Corporation, an operator of aggregate properties on Vancouver Island posted record gross profit per ton despite lower quarterly sales. Furthermore, the company announced its fourth consecutive quarter of positive adjusted EBITDA largely due to rising aggregate prices and a weaker Canadian dollar.With production costs in Canadian dollars and sales primarily to the California market in U.S. dollars, Polaris should also be a beneficiary of the recovering American housing market. More importantly, Polaris announced that its Long Beach terminal was opened in July, which will give the company access to the robust, more lucrative market of Los Angeles.

Equitable Group Inc., a Canadian mortgage financier and schedule I bank, reported exceptional earnings on August 13th, 2015. The company announced EPS of $2.06 versus an estimated $1.85 and reported single family lending originations of $641 million, an increase of 28% from last year. Despite growing market negativity with regard to Canada’s economy and housing market, Equitable reported surprisingly positive results. We believe that Equitable Group has a strong management team, excellent risk management, and a very attractive valuation.

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Irwin A. Michael Signature

Irwin A. Michael, President
I.A. Michael Investment Counsel Ltd.

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