Benj Gallander is president of Contra the Heard Investment Letter. His focus is contrarian investing.
Gold stocks have been severely beaten and Harmony is no exception. This is a major company with experienced management. It was purchased for less than one-third of book value. Initial sell target: $16.14 (U.S.)
Infrastructure is critical. This company has invested in hydro, wind, biomass, solar and water. The payout was cut to $0.30, still fat for investors but a much more reasonable level. An excellent takeover candidate. Initial sell target: $8.74.
Rona Pref. A
Rona appears to be undergoing a major turnaround. The preferred at this level offer an excellent dividend and the likelihood of capital appreciation.
Past Picks: February 20, 2013
AgJunction Inc. (formerly: Hemisphere GPS)
Then: $0.82; Now: $1.07; Total return: +30.49%
Orange S.A (formerly: France Telecom)
Then: $10.08; Now: $12.70; Total return: +33.72%
Then: $6.60; Now: $9.10; Total return: +37.88%
Total return average: +34.03%
Many badly beaten-down stocks have had a dramatic rise since the recession. Certainly there are far less bargains than a few years ago. Still, many investors who were afraid of investing in stocks are now afraid of only obtaining desultory returns in GICs and are herding back into the market.