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Wutherich & Co. April 2019 Newsletter

Monthly Message

The Wutherich & Co. Composite was up 4.9% in April. This compares with the S&P/TSX up 3.2% and the BMO Small Cap Index down 0.3%.

We submit our numbers to Mercer (a pension consultant) to compare how we have done versus our peer group. As of March 31, 2019, we rank #1 in the country relative to their Canadian Small Cap Equity Universe for the one, two and three year periods.

Most of our companies continue to generate excellent results and this has driven portfolio performance during the last three years as it has for the nearly two decades that we have been in business. Look at the Performance Chart on Page 2. Though there has been plenty of volatility, you can nearly put a ruler through the green Wutherich & Co. line on top. A consistent investment philosophy has driven our performance since the start. In fact, the Investment Philosophy section on Page 2 has not seen as much as a change in punctuation since it was first written nearly 20 years ago. While there will be plenty of swings and surprises along the way, the consistent application of our investment philosophy should generate good returns for years to come.

We have trimmed several holdings in the portfolio as their valuations have pushed up against our limits.  We intend to deploy the resulting cash in other good names. One recent example is Sangoma Technologies (STC-T, $1.70), a Markham, Ontario based provider of communications systems. Though the company has been around since 1984, new management joined in 2010 and has reinvigorated growth, both organically and through acquisitions. The company is profitable with a good balance sheet and the capability of more than doubling in size over the next five years. We think this stock can meet or exceed our 15% target rate of return over the long-term.

To view the complete Monthly Message and Factsheet click here