Monthly Message
For June, the Wutherich & Co. Composite was up 5.1%.
The snapback has continued for now. Whither? We certainly don’t know but are glad to own companies in the portfolio that are showing great resilience to the macro and geopolitical uncertainty in the world around us.
Last month, we gave an example of one of these companies, namely Black Diamond Inc. (BDI-T). Another example is Propel Holdings Inc. (PRL-T), a Toronto-based financial services company specializing in loans to sub-prime borrowers in the US with smaller operations in Canada and the U.K. The company has no physical branches and leans heavily on automated systems and artificial intelligence to screen for prospective borrowers. Much of this was developed in-house and is considered proprietary, allowing them to sell this capability to other institutions as another product line which they call Lending-As-A-Service (LAAS). As large banks tighten their lending criteria in the current environment, more people spill into PRL’s prospect pool. This, combined with exceptional operating practices and the ability to sell LAAS, is allowing the company to grow earnings at a pace greater than 25% while trading at a P/E ratio of only 14 times. We’ll take that combination all day long.
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