Monthly Message

The Wutherich & Co. Composite was up 2.5% in March. This compares with the S&P 500 up 6.8%, the DJIA up 7.2%, the NASDAQ up 6.8%, the S&P/TSX up 5.3%, while the BMO Small Cap Index was up 6.7%.

Gains in the Canadian market were largely driven by mining stocks where we have comparatively little exposure. How sustainable these gains are is unknowable and a matter of conjecture, one that we are not willing to engage in. Rather, we spend our time and money on well managed, well capitalized companies. They have strong cash flows, good balance sheets and we are comfortable owning them for many years, through good times and bad.

A good example is Avigilon Corp. (AVO–T), a Vancouver-based manufacturer of end-to-end security systems. Their products are deployed by companies, governments and agencies around the globe. The company should continue to gain share in a growing market with solutions that appear to be far superior to those of their competitors. They have recently doubled manufacturing capacity which should allow them to grow earnings at a rate of 20% for several years. At only 17 times forward P/E we think the stock offers great growth for a reasonable price.

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