Monthly Message

The Wutherich & Co. Composite was down 3.2% in May. This compares with the S&P/TSX down 3.1% and the BMO Small Cap Index down 2.7%.

Sell in May and go away? Well, we certainly saw some selling in May, egged on by a few Trump Tweets about trade. That strategy, however, seems like a tough way to make money. You need to sell all your stocks at just the right time; buy them back at the right time; and minimize any trading fees and tax consequences of your actions. Best to leave well enough alone. Perhaps the maxim should read: “Less is more.” We tend to do as little trading as possible throughout the year and only do it according to valuation parameters that we apply to each stock in the portfolio.

A recent addition to the portfolio is Plantronics (PLT-N). This is a US-based company that is a global supplier of headsets and phone equipment for consumer and business applications. The stock has come off significantly recently as they work to integrate a large acquisition. The stock has also been impacted by Trump Tweets about tariffs against imports from Mexico. Their largest manufacturing facility is in Mexico. This company has shown strong execution and free cash flow generation in the past and, while it may be difficult, we think they can navigate the troubled waters of world trade. We have used weakness in the stock price over the last few months to initiate a position in the company.

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