Stephen Takacsy Portfolio manager Stephen Takacsy says it was part design, part luck that his Canadian equity fund was relatively “COVID proof” when the markets plummeted this year after the pandemic forced the widespread closing of businesses.
Some of his biggest positions were in sectors that surged amid the market uncertainty, including renewable energy and e-commerce.
“We had little pockets of weakness, but most of our portfolio was quite resilient,” said Mr. Takacsy, president and chief investment officer at Montreal-based Lester Asset Management Inc., which manages about $335-million in assets.
Mr. Takacsy also used the market drop in the spring to add more shares of beaten-down names such as Pembina Pipeline Corp., Gibson Energy Inc. and Badger Daylighting Ltd., for example, and to buy new names such as Canadian Apartment Properties REIT, Brookfield Infrastructure Corp., Altagas Ltd., Toronto-Dominion Bank and Morneau Shepell Inc.
The strategy has so far been profitable, with his Canadian Equity Fund up 11.2 per cent year-to-date, as of Dec. 11, versus a return of 6.1 per cent for the S&P/TSX Composite Index over the same period, based on total returns (which includes reinvested dividends).
Below are some of Mr. Takacsy’s picks across three sectors he favours now – technology, health care and consumer discretionary products:
TECHNOLOGY
His two picks are software company MDF Commerce Inc., up about 70 per cent over the past year, and supply chain management software company Tecsys Inc., up about 145 per cent over the same period.
“We’re looking for e-commerce exposure at a reasonable price,” Mr. Takacsy said.
His firm started buying MDF Commerce, formerly known as Mediagrif Interactive Technologies Inc., when it brought in new management last year and bought a large block at $3.50 a share in April from a mutual fund that was selling. The company, which provides software-as-a-service, or SaaS, and e-commerce platforms to enable transactions between buyers and sellers for large corporations and governments, has strong recurring revenue. Mr. Takacsy said the company is signing up large, recurring clients and is making money. “It’s really undervalued and it’s early days [for the company],” he said.