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Money manager Alex Etsell isn’t just being patriotic when he chooses to invest in Canadian small-cap stocks. Kits Eyecare Ltd. KITS-T, the Vancouver-based eyeglasses and contact lens company, is a stock we bought in early December at about $15.40 a share.
Kits has been growing quickly, and much of that growth is recurring revenue, especially from its contact lens business. What’s unique about the company in this space is its level of vertical integration, from manufacturing through customer fulfilment. It allows the company to drive higher margins.
It’s a stock we exited in our micro-cap strategy in September, before the pullback [last fall], and then bought again late last year. We traded it very well – a bit of luck – but the valuation was looking a little stretched, and then we saw an opportunity to get back in.
