15 Comments
Jan 8, 2023Liked by Dave Waters

In 2012-2013, something changed for Logistec and the stock price shoot up x 4 / x 5; where it has been roughly rangebound ever since. What was that?

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I wish I had an answer. Investors seem to "discover" this company about once a decade. Meanwhile, Logistec just keeps on growing its earnings and adding good assets to its roster.

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Dec 30, 2022Liked by Dave Waters

Nice piece! I came out of 2022 up 21% (close to $1 million), in part because of my investments in Canadian companies like Journey Energy, CES Energy Solutions, InPlay Oil, Hammond Power Solutions, Supremex, and Obsidian Energy. I also had some nice returns in US and European stocks, including XTB in Poland and RCM Technologies in the US, but Canada has been very good to me. My prime Canadian bets right now are Hammond, Supremex, Total Energy Services, and Step Energy Services, but I'm also invested in Data Communications Management, Cipher Pharmaceuticals, Titanium Transportation, Hemisphere Energy, Currency Exchange International, Calfrac Well Services, Itafos, Alvopetro Energy, Black Diamond, Taiga Building Products, PHX Energy Services, Pine Cliff Energy, Trican Well Service, Major Drilling, Shawcor, and Chemtrade Logistics. Rich pickings!

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Quite a nice list of companies for me to check out! I have been building a position in one of them.

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Dec 31, 2022Liked by Dave Waters

I really appreciate your ideas and writing, truly excellent. By the way, the PFIC dilemma can be solved (for US taxpayers) by buying PFICs in a tax-exempt account, IRA, etc. It used to be that all PFIC owners had to file regardless, but that rule was suspended some years ago. A google search can quickly verify this.

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Dec 31, 2022Liked by Dave Waters

Thanks as always for your interesting write-ups. Any idea how a PFIC is treated in retirement accounts?

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Great Ideas.

I like Melcor in Alberta real estate at a discount.

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Thanks, I'll check them out. I tend to avoid Canadian companies that pay significant dividends as the tax treatment is a real drag on returns for a US investor. But sometimes it makes sense if there is a catalyst to drive a re-rating.

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Dec 31, 2022Liked by Dave Waters

Thanks Dave and Happy New Year.

My favorite thing about Canada is that every company, even small Venture exchange companies with market caps of 5-10 million (Canadian) file a complete complement of required filings on SEDAR. They do so without complaining about taking too much of management's time, concerns regarding competitors seeing their results, remarks that the cost it too prohibitive, etc. All the 'reasons' why the US has thousands of companies in Expert Market and Pink Limited/Current. If Canadian companies can do it steadily and without breaking the bank, US companies should be required to do the same. The SEC pretends to be playing hard ball but they aren't, the Canadians do it better. If your shares trade publicly you must complete these documents, that's all, no discussion, just do it.

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Jan 5, 2023·edited Jan 5, 2023

While I am not familiar with Canadian corporation or securities laws, I doubt that this is true. This would mean that if two people form a landscaping company and structure it as a corporation, they would have to file regular reports with SEDAR. I am curious whether anyone knows the precise rules for which companies must file. A brief internet search reveals only that "public" companies must file. In the United States the term "public company" has no legal significance; people throw it around all the time, but it means whatever they want it to mean in a particular context. Does "public company" have a legal definition in Canada?

Saying that "if your shares trade publicly you must complete these documents" explains nothing. In the United States almost all corporations, including landscaping companies with only two stockholders, trade publicly, in the sense that any stockholder who chooses may sell to any willing buyer unless the corporate charter or bylaws happen to have a rule limiting transfers. I suppose you could adopt a definition that the trading is not public unless they are listed on an exchange, but then "Pink Limited" companies would not qualify as public; or you could say that they have to be DTC-eligible, but the DTC did not exist before around 1971, so that would mean that no companies were public before then; or you could say that companies are public if their shares have market makers, but market makers did not exist before the late 1800s, which would mean that all companies traded on the NYSE before then were not public. So I presume that Canada has a rule analogous to the one in the Securities Exchange Act that companies must file if they have more than 300 registered shareholders, as interpreted by the SEC rule that all DTC participants count as separate registered shareholders. Does anyone know what rule Canada employs?

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Happy New Year's, Dave!

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Evertz Technologies. World leader, high ROE, no debt, owner operators...

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Have you ever looked at ECN ($ECN.TO) ?

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Not closely. I remember a decent write-up a few years back? I decided I didn't understand the biz well enough to get confident.

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Might be worth looking again in that case. They recently sold a part of their business so now there are only two loan origination businesses left. They want to consolidate the manufactured housing and marine / RV market. They did it before with Service Finance for a 6,5x return in 4 years.

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