November 6, 2017

On Monday, the S&P 500 was up 0.1%.

Toronto was up 0.45% as oil (West Texas Intermediate) rose to $57.24, up 2.9%.

Toll Brothers was up 2.1%.

Stantec was down 1.8%. It reports earnings on Thursday.

CRH Medical fell another 7.6% in Toronto. Perhaps I am being reckless, but I added to my position today. This remains a profitable company and I will stick to my usual practice of buying companies that appear to be under-valued. Over time this has worked out well for me although not with every stock and there are never any guarantees.

Melcor is updated and rated Strong Buy at $15.05. In today’s trading the market was unimpressed with the earning and the stock traded as low as $15.00 and closed at $15.15. This is a company that has never failed to report a profit in the 15 years that I have been following it. Its assets consist mostly of real estate and there is no indication that these assets are worth less than book value and yet the equity trades at 51% of book value. I expect book value to rise over the years (though not every year) and I expect the price to trade up closer to book value at some point. This company looks good from a traditional “margin of safety” perspective. The market can ignore the value for a time but ultimately if the company continues to make profits and to slowly raise its dividend over time (currently the yield is 3.5%) then the market will reflect something closer to full value at some point. When the market ignores the value of a stock there is always the option of basically buying and being prepared to hold for the very long term. I would expect the dividend to be raised modestly in early 2018.