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North West Company Inc. (The) (NWC)
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Premium Brands Holdings Corporation (PBH)
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Savaria Corporation (SIS)
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Exchange Income Corporation (EIF)
Q: A good portion of my smaller cap portfolio weighting is in these 4 stocks. They seem reasonably diverse sector wise but the first three have been trending down for 3 months or more, and EIF seems to be now following suit. From a lot of recent commentary I was thinking small and mid-cap names might have a bit of a tail wind, at least on a valuation basis. I know I shouldn’t focus on 3-6 months but still a bit “vexing” watching them slide. I’ve read the recent q&a on all of them, don’t see any alarming comments really, any new concerns I’m missing?
5i Research Answer:
We do not see anything alarming here. PBH has been extra frustrating, however. The small/mid cap thesis should still be intact, however December was simply horrible for the sector, as investors feared stronger economic growth (ya, we know, that's a good thing) and its potential impact on rates. Small caps pretty much across the board have taken hits. There has been some minor respite in January but this week raised more concerns.