Monthly Message

The Wutherich & Co. Composite was up 0.2% in June versus the S&P/TSX being down 1.4%.

While the last twelve months have been very strong for the Wutherich & Co. Composite, if we zoom out a little, the market and our portfolio have seen relatively weak performance since November 2021. Outside of a handful of mega-cap US technology names, the average stock has had very modest performance indeed. Russian troops pulled up to the border of Ukraine in November of 2021. I am no macro-economist, but it seems like these events are linked.

Since I started as an investor 32 years ago, when everyone is focused in one direction, in this case, US mega-cap technology, I am hardwired to look elsewhere. All you need to do is widen your view and discover so many high-quality companies that are being ignored. Some buyers are recognizing this as M&A activity is starting to pick up. We have seen several names in our research universe be bought or put themselves up for sale in recent weeks. HIBB-Q, WIRE-Q and TGLS-Q are all examples.

With the removal of HIBB from the portfolio this month, we have plenty of cash. Combine this with the summer being a weak time for stocks, we think that we have an excellent opportunity to add a few ignored, inexpensive names to the portfolio. In our Portfolio Composition, I believe that for the first time since we launched almost 25 years ago, we have no US names. For now, the better opportunities for us are on the Canadian side of our research universe.

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