The year is over so here is my full year 2019 portfolio update. I added a couple of new positions in Q4 2019. Here is my complete portfolio.
2019 was a year full of learning. I wrote a previous post about some of the lessons I learned in 2019 here.
I consider my direct comparable performance-wise the Vanguard S&P 500 ETF (VFV.TO) and the Vanguard FTSE Canada All Cap Index (VCN.TO). The full-year numbers for these two ETF’s are not yet out. From what I have read I definitely underperformed the S&P 500 which had dividend reinvested returns of 33%. The S&P/TSX was up 19% this year. Overall I’m satisfied with the performance of my portfolio.
I addressed the mistake I made purchasing Datable Technology Corp in my previous post. If I would have avoided this mistake it would have boosted my returns simply by not losing 75% of that position. Hopefully, I’ve learned my lesson not to buy a position before I fully research a company. I took on too much risk in 2019 than I needed too. I don’t want to avoid risk but instead, be more aware of the downside potential of investments.
My portfolio was really propped up by Well Health Technologies (WELL.V) and Xpel Inc (XPEL). These two positions made up for the large losses I sustained in iAnthus (IAN.CN) and Datable (DAC.V).
Q4 Exited Positions
Enbridge Inc (ENB.TO) Market Cap: 105 billion
In Q4 I exited my position in Enbridge. Enbridge has been a solid performer for my portfolio since I bought my position in the spring of 2018. Since I bought Enbridge my focus has shifted to microcap companies as I feel they have the potential for the best long term returns.
Enbridge has a very solid business model and their concerted effort to divest non-core assets I believe was an excellent decision. Their focus on pipelines is a smart move. There is dramatic pushback against any new pipelines in North America making their existing infrastructure even more valuable.
My fear with Enbridge is they suffer a large pipeline burst that costs billions of dollars to repair and potential loss of life. This may be an irrational fear but they have had pipeline explosions in the past couple of years. One explosion in Kentucky killed a worker. While I have no doubt they have a strict focus on safety the risk of an ageing pipeline bursting is always in the back of my mind and I think a real risk to the investment.
Q4 New Positions
Polaris Infrastructure (PIF.TO) Market Cap: 216 million
I’ve been watching Polaris for a little while and a lot of smart investors I know are owners. I felt Polaris was a very logical choice to move my Enbridge money into. It is another dividend payer and involved in the energy sector. Polaris, however, is a clean energy company with a geothermal plant in Nicaragua and new assets coming online in Peru.
I felt Polaris was simply a better value than Enbridge and has the potential for better appreciation. Their diversification into Peru should remove some of the risks of being a single asset company and attract new investors. I added just before Q3 earnings and then Polaris declined 17%. Thankfully I had additional capital to deploy and was able to take advantage of the sell-off.
JEMTEC Inc (JTC.V) Market Cap: 5 million
Jemtec Inc. is a provider of offender monitoring services in Canada. I read about Jemtec awhile ago but never really came back to it until Q4. They are profitable, have a strong balance sheet and are very illiquid.
I felt taking a position in Jemtec was a good idea as I have some knowledge of Canada and it’s legal system being employed in law enforcement. In my observations I see fewer and fewer offenders being brought to jail. Instead, they are left in the community while they await trial and even to serve their sentences. Processing offenders through our court system and housing them in prison is extremely expensive.
If this trend continues, which I am very confident it will, Jemtec could see an increased role. The technology around electronic offender monitoring is improving and with those improvements, we could see greater adoption in Canada.
On January 8th, 2020, Jemtec announced a special dividend of $0.25 per share. This is a nice bonus and returns 18% of my initial investment.
2019 Portfolio Update Biggest Movers
Well Health Technologies Corp (WELL.TO) Market Cap: $213 million
2019 Performance: 248%
Like I mentioned above, WELL, was an amazing performer for me in 2019 and a major boost to my portfolio. The share price recently caught some momentum from their uplisting to the TSX. The primary care clinic is a poor experience and one that can be greatly improved on. I am counting on WELL tackling this challenging problem.
Namesilo Technologies Corp (URL.CN) Market Cap: $33 million
2019 Performance: 42.9%
Namesilo is a company I am very high on and has become my largest position. CEO Paul Andreloa is a very respected Canadian microcap investor and has purchased large blocks of Namesilo stock in the open market. Namesilo continues to add domains and ancillary services. 2020 should be another strong year for Nameslio.
iAnthus Capital Holdings (IAN.CN) Market Cap: $346
2019 Performance: -67%
iAnthus, and the entire cannabis sector, got decimated in 2019. While I still think the US cannabis sector is in its infancy it’s never fun losing 67% of your largest holding. I would like to think that I am a little bit wiser and will recognize hype-filled bubbles in the future and avoid investing in them. I do like iAnthus’ management team. They preach all the things that investors want to hear. If they can execute and become cash flow positive in 2020 things should improve.
Datable Technology Corp (DAC.V) Market Cap: $1.66 million
2019 Performance: -64%
There isn’t much more I want to type about Datable. I will continue to hold Datable in hopes they can generate more revenue and self fund their operations. This may be a mistake but insiders have been participating in all of their financings.
2019 Portfolio Update Conclusion
2019 was a fun year of investing. The more I invest and learn the more confident I am that I have the temperament to be a good investor. I am content with where my portfolio is today and will look to add to existing names in my portfolio as their business performance improves. Three solid performers really helped my portfolio in 2019, Well, Xpel and Namesilo.
In 2020 Namsys is a company that I am targetting to increase position size. I think it is an excellent business with solid growth potential and wonderful profitability. Namsys will likely be the topic of my next large post.
I will continue to read and learn in hopes of improving further. One of my goals for 2020 is to start researching companies beyond their financials. I did a little bit of this in 2019 with my research in Crescita Therapeutics although it was a very beginner style research. I enjoying talking to management but it has to be taken with some skepticism. They will most likely paint a very rosy picture of how their company is doing. By speaking with customers and employees you get a much better idea of how the business is performing and the quality of their product. I hope to do much more of this in 2020.
Thanks for checking out my 2019 portfolio update and good luck to all in 2020!
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