February 27, 2015 – Value Commentary

We have been experiencing interesting times in the market over the past four weeks. Oil and the Canadian dollar both seem to have stabilized, and consumer confidence is positive, especially with the decline at the gas pump.

As February is coming to an end, we would like to review our investment activities over the past month. Similar to last month’s note, we continue to lower our energy and precious metals exposure, particularly in the small cap names that have limited value creation potential. Most of the unwinding has been done and we are encouraged to see that our shift to a more consumer and industrial non resource focused portfolio strategy is showing positive results. In fact, all of the ABC funds are showing positive results YTD and we believe they are set for a successful 2015.

Since our last note, we have continued to reposition our portfolios and have added new holdings, which we believe will provide great value. These additions are tied to the American consumer and the strengthening US economy. These purchases include: Johnson & Johnson, Foot Locker, The Gap, Whirlpool, Flexsteel, and American Express. All of these stocks are free cash flowing and should provide excellent opportunities for stock buybacks, debt reductions, increased dividends and accretive acquisitions.

With the changes we have made to our portfolios, along with our view of improving American economic activity, we believe our portfolios are well positioned for this year.

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