July 2018 Commentary

July saw a resumption of positive returns for Forge First Asset Management Inc. after an ever so brief hiatus. Given our strong focus on free cash flow and continuous bottom up analysis, we typically find that earnings season treats us reasonably well. It’s a quarterly reminder to the investing world that the companies we own have strong underlying fundamentals while those that we are short may be overvalued for any number of reasons; but again the presentation of financial statements leaves little room to hide. We were particularly encouraged by the broad based contributions to July’s performance, with the top ten made up of energy E&P longs (3) and shorts (1), technology longs (2), a REIT, a financial, an industrial and an energy marketer that seemed left for dead less than a year ago. Concerning the last stock in that list, we thought mid-year might be a decent time to lay out what has been our thesis for some time on one of our favourite names.

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