Benj Gallander.Tibor Kolley/The Globe and Mail
Benj Gallander is president of Contra The Heard Investment Letter. His focus is on contrarian investing.
Top picks:
DLH Holdings Corp.
The major challenge facing DLH is that it has to boost the stock price above $1 or face delisting. This seems eminently achievable for this outfit with a backlog of $153-million, whose revenues increased by 21 per cent last year and the last quarterly loss of $354,000 was less than one-tenth of the prior year's. (Initial sell target: $5.24.)
1-800-Flowers
Flowers has been in major turnaround mode and it appears that the lessons learned from those difficulties will bode well for the future. As the economy recovers, discretionary income should increase, helping this enterprise. (Initial sell target: $11.84.)
First Busey Corp.
BUSE has stabilized revenues and earnings and has more than $1-billion in cash and equivalents accompanied by a nominal debt load. Insider ownership is around 14 per cent and the dividend works out to about 3.5 per cent. (Initial sell target: $9.24.)
ATS Automation
Then: $6.31
Now: $8.93
Total return: +41.52 per cent
Flextronics
Then: $6.21
Now: $6.65
Total return: +7.09 per cent
DLH Holdings Corp.
Then: $2.19
Now: $0.71
Total return: –67.57 per cent
Total return average: –6.32 per cent
Market outlook:
Predicting markets at this time is exceedingly difficult as both positive and negatives are rampant. However, with the S&P 500 hitting a five-year high, and investments such as GICs at historical lows, it is quite possible that many investors will be enticed back into the markets. Sadly, they will have missed out on this rally.