The Vox portfolio continues to thrive, although it is not - nor is it ever - without its blights.
In the fall of 2008 and again in March of this year we turned very bullish on big stocks. They have, of course, done well. The S&P/TSX composite index is up by more than 50 per cent since March, while the big U.S. indexes are also sitting on double-digit returns.
The analysis was complicated, technical and rigorous: Everyone is selling in a panic, so buy. How's that for genius?
In the late spring and summer I figured the smaller stocks would have to start moving too, so I started to scan that landscape for cash. I found Mainstreet Equity, trading at $7. This real estate concern has a big footprint in commodity regions such as Alberta, British Columbia and Saskatchewan and is light in places like Ontario, where manufacturing is being decimated.
It also built up a war chest during the recession, largely by refinancing mortgages, and today has about $3 a share in cash. The stock is $11, so that was a great investment in June, up well over 50 per cent in about half a year.
I found two others, Seacliff Construction and Churchill Corp., both in the engineering and construction fields, with lots of cash and beat-up stock prices. They're up 25 per cent and about 32 per cent, respectively, in four months so far.
Sometimes the market hands you a gift. I thought Aeroplan was one in June at $8 or so. Investors were worried about Air Canada and took it out on the frequent flyer program. Buyers of the shares at that time are up almost a third - not bad for six months of work.
My recommendation of Aastra Technologies was poorly timed if you took it right away, at around $29 a share in early May. The stock almost immediately sank to $20 (hopefully you waited a couple of weeks). That said, it's $34 and change today so if you paid $29 and hung on - tough to do given the stock's swoon, I know - you're doing okay.
Ford was an eyebrow-raising recommendation in late April at $4 (U.S.), but I felt confident enough to buy some myself (after the column appeared of course). It's $10 now, and I think the U.S. car makers are going to be way more competitive. I also think they'll get a lot of help from governments, and Toyota and Honda et al . will pay the price.
My advice to avoid Gildan isn't exactly aging well. It was $15 (Canadian) when I said so a year ago and it's above $25 now. The math is clearly not working in my favour there. For what it's worth I still don't think it's a great business but if you can make money on the stock then bully for you.
My call to avoid Yellow Pages Income Fund at around the same time fared better. Units were about $8 and are now $5.35. Not even a 15-per-cent yield skates you onside.
From what I'm reading I think there may be value in these sorts of companies eventually, but at lower prices and assuming they survive (they tend to have debt).
Where Vox really did well was on small caps. Wavefront Technology Solutions was 50 cents when I touted it. It's $2.79 now, for a 450-ish per cent gain. The company's technology, which allows oil producers to extract more from their reserves, is slowly gaining traction.
Landis Energy was another call. Trading at 40 cents at the time, the company, which has a gas storage play in Nova Scotia, has since put itself up for sale and is quoted at 75 cents.
Cyberplex was another small cap on my radar but I got to it late: It was worth $1.50 then, it's now $1.14. But it's still interesting and trades at seven times forward earnings (yes, it has earnings).
One of my few short recommendations appears to be starting to pay off: ZENN Motor Co., which wanted to build electric cars, was north of $4 when I cast suspicion on it at the end of April. It did go to $6 but is back below $4 now. I think it's going a lot lower.
Bearish calls on Research In Motion, meanwhile, were looking good until it knocked out the lights in its latest quarter. On Oct. 9, I argued its best days were behind it (meaning the stock). It was quoted at $71 then, but very quickly sank to $60 before rebounding. Now, it's back to $71.
I stand by my call, having recently upgraded some RIM software on my BlackBerry and found it way worse than the older version. Any company that allows inferior products - and I mean inferior to what it had before - to ship out the door is doomed.
Probably our most bullish call was on natural gas this past summer, when it hit its lows. So far that's looking good, although the weather is helping. Long term it will prove itself. You heard it here first.
Fabrice Taylor is a chartered financial analyst. ftaylor@globeandmail.com