Market Call:
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James Hodgins, Chief Investment Officer, Curvature Hedge Strategies
FOCUS: Market-Neutral Investing (Small & Mid-Cap Stocks)

TOP PICKS:

  • DHX Media (DHX TSX)
    Most recent purchase yesterday at $1.95. Now the largest independent producer and distributor of children's content in the world makes DHX a terrific takeover candidate as new digital distribution channels (NETFLIX, Apple TV, etc.) make content an order of magnitude more valuable. Trades at roughly 6x forward EBITDA vs. our estimated takeover multiple of 10x.
  • Valeura Energy (VLE TSX)
    Most recent purchase yesterday at $0.94. Roughly half the market cap in cash with estimated cash flow of $0.40 this year and $0.60 next year. Relatively safe gas production in Turkey with big upside in applying horizontal drilling to light and heavy oil basins. Targets on the street as high as $7.00/sh based on the risked NAV.
  • B2Gold Corp (BTO TSX)
    Most recent purchase 2 weeks ago at $3.70. Best growth profile among intermediate producers, provides good upside regardless of the gold price fluctuations. Arb pressure on stock lifted after the acquisition of CGA mining should give near term upside to the stock. Another likely takeover as former CEO of Bema, sold to Kinross is doing it again at B2.
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Disclosure: Personal Family Portfolio/Fund
DHX N N Y
VLE N N Y
BTO N N Y

PAST PICKS: January 27, 2012

Innovative Composites (IC TSX-V)

 

Then: $0.76 Now: $0.08 -89.47% TR: -89.47%

VersaPay (VPY TSX-V)

 

Then: $1.14 Now: $1.45 +27.28% TR: +27.78%

*Short* 5N Plus (VNP TSX)

 

Then: $5.26 Now: $2.32 +55.89% TR: +55.89%

Total Average Return: -2.1%

 

Disclosure: Personal Family Portfolio/Fund
IC N N N
VPY N N Y
VNP N N N

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