On the positive side, Ero Copper was one of the best performing stocks last quarter (up +24.5%). Despite the weak copper price, Ero’s strategy of increasing high grade mineral reserves at its Brazilian MCSA Mining Complex continues to gather attention. The company has increased its proved probable reserve to over 18 million tonnes of copper. The company plans to further increase production 142% and reduce costs by 40% by 2021. We continue to hold this position in the portfolio as Ero has one of the clearest growth profiles in the sector and continues to deliver on their strategy.

Baylin Technologies is a global leader in data transmission (antenna technology). Continued investment in 4G-LTE and the rollout of the 5G network will be the growth driver in the future. After stumbling out of the gates after its IPO, the company right sized and put capital into fast growing areas such as distributed antennas systems, small cell systems, and base station antenna focused on 5G. They have a strong disciplined history of accretive acquisitions. With both acquisitions and strong organic growth, the company continues to reduce its dependence on its major mobile customer. The portfolio continues to hold Baylin.

GoEasy is a leading Canadian provider of non-prime consumer lending. The company has more than doubled its loan book in the last three years. The company has a strong history of revenue growth through its loan book, and maintains its net charge offs within a consistent band (approximately 14%). GoEasy’s operating margins are also very consistent. The stock has done well and is up +37.5% YTD. However, with the interest rate environment changes, we are watching the company’s metrics closely for any sign of weakness. At this juncture the portfolio continues to hold a position in GoEasy.

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