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me and my money

Investor Sam Kovacs holds infrastructure firm Canam Group in his portfolio.

Sam Kovacs

Occupation: Student

Portfolio: Shares in Canam Group Inc., Blackrock Inc. and Gulfmark Offshore Inc.

The investor: Sam Kovacs is majoring in finance at a Montreal university. He is also enrolled in the chartered financial analyst program, and is an avid reader of investment books.

How he invests: Mr. Kovacs examines the "fundamentals," such as income statements, balance sheets and a company's management team. He especially looks for managers who meet their forecasts and have "a clear plan for delivering value to their shareholders."

One of his holdings is Canam Group Inc., "the premier fabricator" of steel components for the construction industry. Based in Canada but operating mostly in the United States, it benefits from the higher U.S. dollar. But what Mr. Kovacs particularly likes is a doubling in the company's order backlog over the year, which suggests an impending ramp-up in earnings.

As the U.S. economy gains momentum, the order inflow could pick up even more. Even if the recovery remains weak, there should still be good demand for Canam's products since much of America's infrastructure is near the end of its lifespan and needs to be replaced.

Meanwhile, management has put in place an incentive program to reward employees who find cost efficiencies. Another sign of frugality is the "installed-video conference rooms in various plants to keep its travel costs as low as possible."

Best move: Capturing a 60-per-cent gain on Penn West Petroleum Ltd. earlier this year "after oil prices began to recover and caused short sellers to cover."

Worst move: He "caught a falling knife" by investing in Gulfmark Offshore Inc., a provider of services to offshore oil operations. However, it "has the fundamentals to endure the tough times…"

Advice: "Knowledge helps you develop an investment thesis and stick to your guns when the rest of the world doesn't get it."

Want to be in Me and My Money? Contact Larry MacDonald at mccolumn@yahoo.com or his Website.