Monthly Message

The Wutherich & Co. Composite was down 1.7% in September versus the S&P/TSX being up 3.2%.

While the market continued to be very strong in September, the Wutherich & Co. Composite suffered a set-back with two of our names delivering very weak quarterly results and one of our names announcing an equity issue at a steep discount to its previous market price. This caused a sharp sell-off.

While the two names that reported weak results will need some watching, we have no strong concerns yet. Propel Holdings (PRL-T) is issuing equity. They are doing this to expand operations by buying a company in the UK that does a similar kind of lending to what they do now in North America. Stocks will frequently trade down to the issue price for a period of time but, if the fundamentals progress favourably, the stock price will re-appreciate in subsequent periods.

In the meantime, we continue to pick away at some of the cheaper names in our portfolio to deploy some of our cash. Outside of some significant external shock, we believe that the Wutherich & Co. Portfolio continues to offer the prospect of strong long-term returns given the high quality and inexpensive nature of most of our holdings.

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