From the Desk of Irwin Michael – May 29, 2015 During the month of May, we continued our search for common stocks exhibiting respectable free cash flow, strong balance sheets, and attractive valuations. The latter half of the month has been characterized by wide variability in stock prices mostly driven by the stock market’s interest rate outlook and comments from the Federal Reserve. On balance, we remain vigilant and focused, as we search for new, undervalued securities.As mentioned in our last note, we have purchased several new Canadian companies and have added to a few current holdings. Some of our recently added positions include: Information Services Corp., a Saskatchewan based company servicing the province’s real estate/home registrations as well as other complementary registration services. The company has long-term contracts with the Province of Saskatchewan and given its significant free cash flow we see opportunities for the company to make accretive acquisitions. Additionally the company pays a solid dividend. We hold Information Services Corp. in three of our ABC Fund’s: Fully-Managed, North American Deep-Value, and the Dirt-Cheap Stock Fund. Polaris Materials Corp.,is an aggregates company specializing in sand and gravel production from its quarry on Vancouver Island. Most of its production is supplied to the California market through its terminals in Long Beach and San Francisco. Polaris is about to become free cash flowing by the end of 2015 and has seen improving prices for its products.Polaris Materials is held in the Fundamental Value and the Dirt-Cheap Stock Funds. Home Capital Group Inc., a lending company that provides mortgages and related products to residential and commercial clients across Canada. The company also provides deposits and other banking services such as credit card products. We like its dominant mortgage business within the non-big bank market. Additionally the company has a high quality loan book, clean balance sheet and pays a good dividend. We hold Home Capital Group in our ABC North American Deep-Value Fund. Com Dev International Ltd., a company that designs, manufactures, and distributes space-based wireless communications products and subsystems in Canada and internationally. More importantly, the company has a growing navigation technology service segment called Exact Earth, which is used primarily to aid the maritime industry. The company is free cash flowing, has good business prospects and pays a dividend. We hold Com Dev in the Fundamental Value, Dirt-Cheap Stock and the North American Deep Value Funds. Irwin A. Michael, President I.A. Michael Investment Counsel Ltd.
