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Value investor seeks good management, widely used products

Peter Scourtoudis

Occupation

Dispatcher for the City of Toronto

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The portfolio

Includes High Liner Foods Inc., Canadian Apartment Properties REIT, Milestone Apartments REIT and Visa Inc.; Vanguard exchange-traded funds (ETFs) tracking the U.S. stock market.

The investor

Just after Peter Scourtoudis began buying stocks in 2007, the stock market crashed. But such setbacks have only made him more determined to become a better investor. "This journey has been about learning, making mistakes and learning from those mistakes," he declares.

How he invests

Mr. Scourtoudis looks for undervalued companies that have good management and widely used products. The companies should also have an easy-to-understand business model.

An example is his investment in seafood-processing firm High Liner Foods, based in Lunenberg, N.S. He bought its shares after they plunged more than 25 per cent on news that Donald Trump was elected U.S. President.

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There was a fear the company's exports to the United States would be hit by Mr. Trump's campaign promises to increase trade barriers. However, Mr. Scourtoudis thought the sell-off was overdone. For one thing, he believes the company hasn't "fundamentally changed that much to warrant such a reaction." For another, the checks and balances in the U.S. political system can water down or even block presidential initiatives. So far, the company's stock price remains close to where he bought it.

Two other holdings in his portfolio are Canadian Apartment Properties Real Estate Investment Trust (REIT) and Milestone Apartments REIT. Mr. Scourtoudis owns them because "soaring real estate prices and stagnant wage growth will force more people to become tenants instead of owners."

He plans to sell call options on his U.S. stocks in the near future. The income received should add a return of about 4.5 per cent to his portfolio, he estimates. The holders of the call options have the right to buy his stocks if their prices rise to the prices specified in the options – but if the stock market levels off after its recent run-up, chances are that won't happen.

His ETFs are held in a registered retirement savings plan, where the investing horizon is long term. For him, ETFs and other index funds are better than picking stocks in an RRSP because trying "to beat the market index over 30 years is an Augean task."

Best move

Buying Visa Inc. stock at its initial public offering and scoring a gain of 525 per cent so far.

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Worst move

It was selling Apple Inc. stock in the mid-$500s.The price is now above $975 (split-adjusted).

Advice

"If being buried in industry reports and balance sheets sounds boring to you," says Mr. Scourtoudis, then "skip stock picking and go with index ETFs."

Want to be in Me and My Money? Contact Larry MacDonald at mccolumn@yahoo.com

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