Reviewing the sooth we said in 2004

Benj Gallander and Ben Stadelmann
Thursday, December 23, 2004

Well, ladies and gents, it’s that time of year again, when we get off our butts and look at how the stocks we chose to write about are doing — whether for better, for worse, or not for much at all. This column will concentrate on the Canadian selections, with the next one focusing on the American picks. Fasten your seatbelts!

Leading off 2004, we talked about commodities with a piece about Aur Resources. We’d written about this outfit in 2001, when it sat at $3.25, and again in 2003, at $4.47. We announced that our entire position had been dumped at $7.25. Aur did shoot higher, to over $8, shortly after our sale, but since then it has see-sawed lower, currently around $6.25.

Another copper play, Corriente Resources, was also highlighted, up from $1.20 in the previous column to about $3.50. Currently, it is around $3. We still hold 15 percent of our original position in that one, having sold another chunk during the year at a delightful $4.74.

Denison Energy was the topic of a column on the resurgence of the uranium market. A company that was in the Contra portfolio twice, with dismal results, rewarded other patient investors handsomely.

Sitting at $6.15 when featured, it is now better than double that, and that doesn’t count the bonus of shares distributed in Calfrac Well Services and Forte Resources in a corporate reorganization. Unfortunately, none of these profits are in the Contra portfolio, but one of us has a welcome winner in his RRSP.

The romance of a merger was looking mighty iffy for Sodisco-Howden Group last June when it was trading at $2.70. Having been on the block for about nine months, it appeared that the corporation would end up a spinster rather than a blushing bride.

Imagine our surprise, then, when CanWel Building Materials appeared on the scene with a $3.25 offer. This is a long two-by-four from our purchase price of $1.19 three years ago.

We argued that Forzani Group, when over $13, would have to be a whole lot cheaper to whet our appetite. Though it has dropped further, this one still does not appeal to our value bent. Maybe later.

Hudson’s Bay Co. was featured in September when at $13.40. This one remains in the portfolio, and our dear hope is that a takeover bid will ensue. Our target price is over $19, but if a suitor arrives soon, the price will likely be lower. Long-term, we are very comfortable with the potential of this venerable retailer.

Westshore Terminals Income Fund has jumped to over $12 since being dumped south of $9 in September. We thought it was getting expensive after doubling in price, but the skyrocketing price of energy had led this stock price into record territory. Rats!

Our oil and gas play, Kelman Technologies, is undergoing major changes. Chief executive David Richard is leaving to pursue supposedly greener pastures. However, at this time we’re very content to stick around with this investment, which remains stuck in the 40-cent range, where we purchased it in 2000.

Lastly, about a year ago we wrote, “The Canadian dollar is not strong. A patient recently taken off life support who is leaving the hospital is anything but strong, but is hopefully improving en route to complete recovery.” Our dollar is now in fine fettle, while the US dollar is on life support. Rumour has it that our neighbours to the south are considering adopting the loonie as their own. Or is it the Chinese rembini?