CIBCAsset Management are buyers! While some investors are analyzing economic data and the U.S. presidential race to determine which stocks to buy and sell right now, money manager Craig Jerusalim remains focused on longer-term corporate performance.
“We don’t try to make big macroeconomic calls or time the market. We stay focused and allow for the compounding effect that comes with owning businesses for the long term,” says the senior portfolio manager at CIBC Asset Management Inc. in Toronto. He co-manages about $6.5-billion in assets across two strategies: Canadian growth at a reasonable price (GARP) and Canadian dividend growth.
Mr. Jerusalim looks for high-quality, growing companies with strong margins and “prudent” balance sheets, recurring revenue and solid management teams. His Canadian GARP strategies are up 11.6 per cent year to date and 14.9 per cent over the past 12 months. His five-year annualized return is 12.7 per cent. The performance is based on total returns, before fees, as of July 23.
The Globe spoke with Mr. Jerusalim recently about three stocks he likes – one trading near its all-time high, one at a multi-year low and one suffering a temporary setback that he believes is “an interesting opportunity”
DRI Healthcare Trust
is a company that has suffered what we believe is a temporary setback after its chief executive officer was let go following an investigation into his expense claims. He was accused of overcharging the firm on certain fees. The company was paid back, so shareholders weren’t affected, but it caused the stock to pull back by close to 40 per cent. It has only recovered partially, which we see as an opportunity.
DRI is a royalty business for select pharmaceuticals. It has recurring, predictable revenue that’s not tied to the economic environment. The company trades at about a 10-per-cent discount to its book value [the net value of a firm’s balance sheet assets]. We think its book value will substantially increase as the company closes its current deal pipeline with funds it currently has available. We think this company will keep growing with its new CEO and existing investment team, who are all highly qualified. We’ve owned the stock since its initial public offering in 2021 and increased our position last year. We’re comfortable in our large position in the company (IPO) today and are looking to acquire more in the future.