Bruce Campbell Canaccord newsletter highlighting Bruce Campbell from the latest edition. Expalins thier stock selection process somewhat....... In our Wealth Management “PM4-aggressive growth” program, we utilize a gent out of BC to tap into his expertise with some smaller-cap names that we have followed for years now. His name kept coming up as a great source for insights to those companies. He is Bruce Campbell, an Alberta boy who moved to Kelowna and manages his StoneCastle fund for Redwood. Bruce is a regular guest on BNN and companies like Dirtt Environmental (DRT-t), Nobilis Health (NHC-t) & Patient Home Monitoring (PHM-v) kept leading us back to Bruce.
We met up with Bruce eye-to-eye & he was kind enough to give our readers a personal insight into what he does and some of his favorite stories going forward. Here you go…
“At StoneCastle we use a disciplined approach that is definable, repeatable and predictable to manage portfolios. The process is a sophisticated three part discipline for managing portfolios. The first step in the process is determining if we are on offence or defence. We have several indicators that help us to guide which positioning we should have with the portfolios. If all of the indicators that we follow are positive then we are on offence and fully invested. If those indicators start to deteriorate then we begin to position the portfolio towards defence. When we are on defence we will hold large cash positions to protect the portfolios.”
“The second step to our process is looking at individual companies to invest in the portfolio. We aren’t concerned with sectors or industries but rather looking at individual companies who are experiencing a fundamental change in their business that will accelerate their earnings today or in the near future. We also look at valuation to ensure that we aren’t overpaying for that level of earnings.”
“The last step in our process is the technical analysis of the individual companies. We like to think of this as economics 101 – supply and demand. We want companies where demand is in control of the relationship. If this changes, then we will take action to remove the position from our portfolio. “ “Our selling process is as disciplined if not more than the buying discipline. Most investors are great at buying but poor at selling. We have a rules-based process that helps to guide when we will exit a company’s stock. We have these rules to eliminate the emotional aspect of selling. “ “Currently the indicators that we follow have us on offence, whereby the portfolio is close to fully invested. We do expect that we could experience a see-saw market during the summer months. This could represent an opportunity for traders to capitalize on the volatility. It will present the long term investors a chance to get some of
their favorite company’s stock on sale. “