January 30, 2015 – Value Commentary https://abcfunds.com/wp-content/uploads/2015/01/jan15valcom.mp3Podcast: Download (Duration: 3:19 — 1.4MB)Subscribe: Apple Podcasts | RSSThe past four weeks have been quite eventful with regard to economic statistics, corporate earnings, volatile commodity prices as well as currency valuations. As we complete the first month of 2015, we would like to review our investment activities over the past three months. Firstly, we have significantly reduced the ABC Funds resource exposure in oil & gas and base metals. For instance, from October 2014 onward we reviewed our most vulnerable oil & gas holdings and completely liquidated our positions in Legacy Oil + Gas, Long Run Exploration, Twin Butte Energy, Enseco Energy Services, and Hercules Offshore. We also trimmed our holdings of Savanna Energy Services and Strad Energy Services. With the proceeds, we purchased undervalued, free cash flowing, non-resource Canadian common stocks including Pure Industrial REIT, Plaza Retail REIT, Com Dev International, and Uniselect Inc. In the U.S., we bought Big Lots Inc., Cooper Tire & Rubber, Mentor Graphics, Regal-Beloit Corporation, and Superior Industries. Secondly, since the beginning of January 2015, we have made more changes to our ABC portfolios further reducing our resource exposure and boosting our non-resource and American security holdings. In mid-month, we took advantage of higher gold prices to completely sell out our shares of AuRico Gold and Kirkland Lake Gold as well as liquidating our remaining stock of Savanna Energy Services. In addition, we trimmed our holdings in Sherritt International, Argonaut Gold, Fortress Paper, and Seaspan Corporation. With the proceeds, we purchased a diverse mix of Canadian and U.S. stocks including: TransForce Inc., Activision Blizzard Inc., Micron Technology, Gilead Sciences, InterRent REIT, Footlocker Inc., and Carriage Services Inc. Furthermore, on price weakness, we added Superior Industries, Genworth MI Canada, and Equitable Group to our existing holdings. With these changes our ABC American-Value Fund is approximately 80% U.S. positioned whereas our other four ABC Funds are now invested between 40-45% in the U.S. In summation, despite a very volatile and challenging marketplace, we are very comfortable with our current American equity allocations given our optimism with regard to a strengthening U.S. economy and its low interest rate environment. Our new portfolio holdings are strong, liquid, well-managed, free cash flowing and undervalued, and should add considerable value to our portfolios this year.