Bill Harris is partner & portfolio manager at Avenue Investment Management. Today we look at their equity portfolio composite.
Management Fee: 1.5%
Top Five holdings
Bell CDA 4.64% 2016
First Capital 5.34% 2013
|1 mo.||-1.73 %||-2.95%|
Past Picks (Jan. 17, 2008)
(S-T) - still owns
Then: $13.58 Now: $2.87, -78.9%
Total return: -78.4%
Arawak Energy (AAK-T)
major shareholder takeover at $1
Then: $2.29 Now: $0.97, -57.6%
Total return: -57.6%
Red Back Mining (RBI-T)
Sold & bought Agnico last fall
Then: $7.92 Now: $7.28, -8.1%
Total return: -8.1%
Total Return Average: -48.0%
Canadian Natural Resources (CNQ-T)
The company has great management and is a low-cost producer. We feel that the current share price discounts most of the risk associated with its debt level.
7.75 per cent 2015 Bonds
The bonds currently yield 13 per cent. The ability to service the debt is based on fixed-price term contracts for coal in western Canada.
8 per cent 2013 Bonds
The bonds yield 20 per cent. The company has an appropriate amount of debt given the size of the asset base. The production break-even cost is around $25 a barrel of oil.
The current environment offers a risk-adjusted opportunity to invest incorporate bonds. Avenue's equity portfolio is now 33-per-cent weighted in this asset class.
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