Mawer Investment Management’s motto is “Be boring. Make Money,” which is did last year. In 2013, each of its equity mandates produced double-digit returns, with small-cap funds returning more than 40% each. The managers recognize however that the increase in returns had more to do with market re-pricing than earnings growth.
While the firm celebrates its positive years, managers also perceive investors as developing a greater appetite for risk as memories of the financial crisis fade and emotions like greed and jealousy begin to drive decisions and cloud rationality. In their 2014 annual letter, the managers write:
“At Mawer, our systematic process is our best line of defense against getting swept into the herd of elephants that is the emotions of the market. By thinking "micro, not macro" and playing a long game, we not only distance ourselves from the daily signals that trigger our emotions, we end up focusing on guideposts we believe are better for estimating future odds. Of course, while we cannot know what the future holds and our method is not the only way, it is the way we have found most reliable over time.”
Mawer announced its fourth quarter portfolio this week, disclosing that it added four new positions.
The New Stocks
Intertape Polymer Group Inc. (TSX:ITP, Financial)
As its largest new buy, Mawer bought 1,725,225 shares of Intertape Polymer Group, a 2.84% equity stake in the company and 2.1% portfolio weighting. The fourth quarter share price averaged $14.
Intertape Polymer Group Inc. was incorporated on Dec. 22. Intertape Polymer Group Inc. has a market cap of $740.260 million; its shares were traded at around $12.18 with a P/E ratio of 10.50 and P/S ratio of 0.86. The dividend yield of Intertape Polymer Group Inc. stocks is 1.42%. Intertape Polymer Group Inc. had an annual average earnings growth of 14.30% over the past five years.
Information Services Corp. (TSX:ISV, Financial)
Mawer purchased 360,734 shares of Information Services Corp., 2.06% of the company and 0.53% of Mawer New Canada Fund (Trades, Portfolio)’s portfolio. The fourth quarter share price averaged $17.
Information Services Corp. was created by Order in Council as Saskatchewan Land Information Services Corporation, a Saskatchewan Provincial Crown Corporation on Jan. 1, 2000, pursuant to The Crown Corporations Act, 1993 (Saskatchewan). Information Services Corp. has a market cap of $340.375 million; its shares were traded at around $19.45 with a P/E ratio of 4.70 and P/S ratio of 4.30. The dividend yield of Information Services Corp. stocks is 2.02%.
K-Bro Linen Inc. (TSX:KBL, Financial)
Mawer purchased 63,730 shares of K-Bro Linen Inc., representing 0.21% of the portfolio. The company’s fourth quarter share price averaged $36.
K-Bro Linen Inc. is incorporated in Canada in 2010. The company is the provider of laundry and linen processing facilities in Canada. K-Bro Linen Inc. has a market cap of $283.814 million; its shares were traded at around $40.00 with a P/E ratio of 26.10 and P/S ratio of 2.15. The dividend yield of K-Bro Linen Inc. stocks is 2.87%. K-Bro Linen Inc. had an annual average earnings growth of 12.20% over the past five years.
New Look Eyewear Inc. (TSX:BCI, Financial)
Mawer purchased 2,074 shares of New Look Eyewear, its smallest new positions, reflecting 0.0026% of the portfolio. The fourth quarter share price averaged $13.
New Look Eyewear Inc. provides eye care products and services in eastern Canada. New Look Eyewear Inc. has a market cap of $223.50 million; its shares were traded at around $17.69 with a P/E ratio of 31.30 and P/S ratio of 2.09. The dividend yield of New Look Eyewear Inc. stocks is 3.39%. New Look Eyewear Inc. had an annual average earnings growth of 9.7% over the past five years.
For more stocks of the Mawer New Canada Fund (Trades, Portfolio), visit its portfolio here. Not a Premium Member of GuruFocus? Try it free for 7 days here!
