Cleland Pulls ahead in National Post race
Leader rides small caps
Jonathan Ratner, Financial Post
Published:Friday, July 10, 2009
Competition participants capitalized on strongmarkets in a second quarter that saw the S&P/TSX composite index up nearly20% and the S&P 500 climb 15%. With two of his picks seeing their shareprices more than double, Hugh Cleland took over top spot with a commanding lead.He is up more than 70% year-to-date. However, persistent volatility in themarket due to the lingering effects of the economic crisis could narrow the gapin the coming months, as could uncertainty surrounding his third selection. Theupdated picks from our stock pickers reflect the concerns still hauntingcompanies and investors, as well as the opportunities still available out there.To review, each participant is given $10,000 to split between three stocks orexchange-traded funds listed in North America. Players are allowed to rebalancetheir portfolios each quarter.
+70.9%
HUGH CLELAND
NorthernRivers Capital Management
The wait appears to have paid off. As is oftenthe case when things get really scary, people abandon small caps, Mr. Clelandnotes. However, he feels this is exactly the time to be buying fundamentallysound names. He is sticking to all three of his picks and expects they willcontinue to experience strong year-over-year growth throughout thisrecession.
"If if the third quarter sees a reasonable pullback in thosenames, I'll stick to them and would expect them to be higher still by the end ofthe year," Mr. Cleland said. "The strong smaller companies will still outperformdramatically over the next one to three years relative to their large-capcounterparts."
Mr. Cleland expects the U. S. economy to bottom in thethird or fourth quarter, with North American equity returns forecast to be inthe -10% to +10% range.
Neptune recently announced a commercializationdeal with Bayer, which he considers a critical building block supporting hislonger-term sum-of-the-parts price target of more than $20.
Mr. Clelandalso noted that Webtech, a global telematics solutions provider, made somestrong inroads into the insurance industry and still has plenty of growth aheadof it. VendTek, meanwhile, did not trade in the second quarter after its shareswere halted in early March due to the need for some financial statements to bere-filed. The decline in value occurred because Mr. Cleland's firm, NorthernRivers, wrote down the value of the shares from 60¢ to 50¢ to account for alonger-than-expected delay in resuming trade.
NEW ALLOCATION - WebtechWireless Inc. (WEW/TSX) 33% - Neptune Technologies Inc. (NTB/TSX) 33% - VendTekSystems Inc. (VSI/TSX-V) 33%
View full article here:
https://www.nationalpost.com/story.html?id=1776196