Includes shares in Hudson's Bay Co., Yellow Pages Ltd., Power Financial Corp.; also includes rental properties and a foreign vacation property.
When Wayne Hylarides (B.Eng., MBA) first ventured into the stock market, he found the volatility hard to handle and sold off his holdings. While out of the market, he focused on investing in himself (via university courses), advancing his career and running a real estate business.
Now, Mr. Hylarides is getting back into stocks. The fluctuations don't bother him as much and he feels more comfortable assessing investment opportunities thanks to his business experience and the analytical techniques learned in his business courses.
How he invests
One of his guiding lights is Prof. Aswath Damodaran, author of several well-regarded books on value investing and a finance professor at the Stern School of Business at New York University. The basic idea behind value investing is to buy shares in companies whose stock prices are trading significantly below their intrinsic value.
Mr. Hylarides estimates a company's intrinsic value according to the discounted cash-flow model. Specifically, he applies a discount rate to calculate the present value of cash flows (or earnings) expected for the next 10 years and adds this amount to book value.
When such estimates come in below the stock price, the company is said to be undervalued. This mispricing occurs because many investors lack an understanding of accounting or don't understand how a business works, "let alone read the notes to the annual report," Mr. Hylarides says.
A recent acquisition was retailer Hudson's Bay.
Mr. Hylarides says independent valuators in 2016 assessed the value of Hudson's Bay at about $35 a share, the majority of which was owing to its real estate portfolio. This intrinsic valuation is nearly three times higher than the current stock price.
It was "buying investment properties in Ottawa and learning business fundamentals."
In the past, he did not have the "stomach to handle volatility," which resulted in selling too soon.
"Your investment strategy must align well with your psychology," Mr. Hylarides advises.
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