Investing outside the box

4/24/2012 10:00:12 AM | Interview with Sal Masionis

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“If you want to make money, you have got to be a little different from the crowd. You have got to look at ideas that are perhaps not the obvious ones.”

Sal Masionis, investment advisor, Brant Securities Ltd. in Toronto

Focus: Special situations, producing oil and gas stocks

Can you give us your perspective on what is happening in the market right now?

“There is too much debt in this world. Interest rates are very low but they are not going to stay low forever. It’s a very difficult time for governments and businesses. So investors are very nervous right now.’’

Given what you see on the market, what is your investment strategy?

“If you want to make money, you have got to be a little different from the crowd. You have got to look at ideas that are perhaps not the obvious ones. I also look at the weighted average cost of capital and the return on invested capital. You don’t want to be in risky stuff, because risky investments are killers.’’

How have you arrived at this investment philosophy?

I have been in the investment business for 44 years. I bought my first car – A 1969 Mercury Cougar – with profits from stocks that were promoted by Murray Pezim.

Can give us a couple of names that you consider to be interesting situations?

Carfinco Financial Group Inc. (TSX: T.CFN, Stock Forum) Carfinco is an Edmonton, Alta, company which provides vehicle loans to consumers who are not able to obtain them from more traditional lending sources. The average value of the loan is around $9,000 for vehicles with an average age of 4.5 years.

Trading at $8.07 this week, Carfinco has a market cap of $198.9 million, based on 24.6 million shares outstanding. The 52-week range is $8.35 and $5.50.

Neo Material Technologies Inc. (TSX: T.NEM, Stock Forum). The company is a producer, processor, and developer of rare earths and zirconium-based engineered materials. The Toronto-based company has 1,375 employees in 19 locations across 10 countries. It is currently in the process of being acquired by Molycorp Inc. (NYSE: MCP, Stock Forum). Trading at $11.04 this week, Neo Materials has a market cap of $1.27 billion, based on 115 million shares outstanding. The 52-week range is $11.43 and $5.47.

ABOUT THE AUTHOR

Interview with Sal Masionis

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