Skip to main content

The Globe and Mail

Panic and fear are tools for this contrarian investor

Isaac Legault prefers to invest when panic, fear and pessimism prevail.

Mike Legault, Legault

Isaac Legault


Enrolled in the Ivey School of Business at the University of Western Ontario

Story continues below advertisement

The portfolio

DH Corp., NorthWest Healthcare Properties REIT, Alaris Royalty Corp. and other mid-cap equities.

The investor

Isaac Legault bought his first stock when he was 15 years old. "The stock is delisted now, so you can guess how that turned out," he says.

The loss discouraged him from investing for several years. Now, he is back in the market and finding more success with his "own combination of fundamental and technical analysis." He is also taking steps toward a finance career, including a work term at RBC Dominion Securities performing equity research on mid-cap companies.

How he invests

For the most part, Mr. Legault is a contrarian investor. Panic and uncertainty are fertile grounds, in his opinion. "I often invest in mid-cap companies that have recently had a surprisingly poor earnings report, a shocking news release" or some other adverse event, he says.

Story continues below advertisement

Those types of conditions can "create situations where fundamentally strong companies are trading at steep discounts to their fair value." This is especially so for small- and mid-cap equities where the lack of analyst coverage means "excellent investment opportunities often go unnoticed." Once Mr. Legault finds a "stock that has had its valuation significantly cut," he'll dig into the company's financial statements, markets and so on. If he buys, he'll patiently hold until the market bids the stock up to its real value – at which point he sells and moves onto the next undervalued opportunity.

Mr. Legault became interested in financial-technology provider DH Corp. after a poor earnings release in October sliced its share price in half. The stock has since partially recovered but Mr. Legault's analysis indicates it could go up another 25 per cent or so from its current price near $23.50, whenever delayed contracts are renewed, U.S. lending picks up, or a buy-out bid prices the firm near its break-up value.

Best move

It was purchasing the shares of a small mining exploration company that "had been releasing very encouraging mineralization reports." They were later taken over by another company at a 150-per-cent premium to the market price.

Worst move

It was selling his DirectCash Payments Inc. shares too early. A few months later, they were acquired by another company at a 60-per-cent premium to the market.

Story continues below advertisement


"Be cautious when investing in a company that the market is very bullish on – they have a lot of downside potential if there is any indication expectations will not be met," Mr. Legault advises.

Want to be in Me and My Money? Contact Larry MacDonald at

Report an error

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.

Discussion loading… ✨

Combined Shape Created with Sketch.

Combined Shape Created with Sketch.

Thank you!

You are now subscribed to the newsletter at

You can unsubscribe from this newsletter or Globe promotions at any time by clicking the link at the bottom of the newsletter, or by emailing us at