From the Desk of Irwin Michael – June 19, 2015 Since the beginning of June, global equity and fixed income markets have continued to exhibit considerable volatility primarily due to expectations of an impending U.S. interest rate increase and the unresolved Greek debt situation. However, the American market has been trending higher this week as the U.S. Federal Reserve implied on Wednesday that interest rates could remain on hold to the latter part of this year. The fact is that interest rates are at record lows and while they will eventually increase, they are providing considerable attraction for higher dividend paying stocks with capital gains potential. An example is Leon’s Furniture Ltd. During the past two months, we accumulated Leon’s Furniture (TSX: LNF), a Canadian retailer of furniture, appliances, and electronics for the ABC North American Deep-Value Fund and the ABC Dirt-Cheap Stock Fund. There are several reasons why we find value in this company: Firstly, Leon’s Furniture has an attractive valuation; the company trades at a 14x forward price to earnings multiple and has a dividend yield of 2.6%. Secondly, the company generates significant free cash flow, which it has been using to pay down its debt from the Brick acquisition and to support its dividend. Thirdly, the company became the dominant retailer within its field after it acquired the Brick in 2013. We believe that after this purchase, Leon’s secured a very strong hold on the Canadian market for home goods. Overall, we believe that the company offers attractive value and good long-term prospects for the future. Irwin A. Michael, President I.A. Michael Investment Counsel Ltd.