The Wutherich & Co. Composite was up 0.9% in October. This compares with the S&P/TSX being down 3.1%.
The portfolio continues its recovery from the downturn that we experienced last Spring. The 0.9% result for October represents a U-turn from earlier in the month. At one point, the portfolio was up nearly 10%. It is interesting to observe these large swings because nothing has changed in terms of the fundamentals of the companies in the portfolio. Yes, the pandemic is affecting them all to varying degrees, sometimes positively, sometimes negatively, but none of that had changed from October 1 to October 31. All that may have changed is investor sentiment about these companies and the markets in general. At times like this, we think it is very important to have a firm understanding of our companies’ long-term prospects and buy or sell accordingly. A recent example is Hibbett Sports (HIBB-Q). The company has been benefitting from the pandemic. People are spending less on travel, restaurants and entertainment but more on athletic shoes and apparel. The company has a strong e-commerce platform which allowed online sales to increase 212% last quarter. Even brick and mortar same store sales grew 65%! They have no debt and nearly 1/3 of their market cap is in cash! Despite these rock-solid fundamentals, the stock started the month at about $40, rose to a high of $55 only to end the month near $39. There had been no change to the story throughout this period.
We have received some fairly strong feedback from our clients and contacts that they would appreciate a presentation in January via Zoom or some other platform. JF and I are happy to oblige and will get back to you with details in the coming weeks.
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