Balanced Fund Report December 2013

Caldwell North American Equity Strategy ‐ Monthly Update December, 2013

Portfolio Additions

We did not initiate any new positions in the portfolio this month.

Portfolio Deletions

FedEx Corporation (FDX‐US)

Reason we Sold the Stock: The stock reached our valuation target of 7x ev/ebitda, which is on the higher end of its historical trading range. The stock has been a great performer for our clients as we purchased the shares at a much lower multiple. Looking forward, the company will benefit from cost cutting initiatives but we see the shares as reflecting some of that upside, and we prefer to stay on the sidelines at these levels.

Company Updates: A Few Highlights

CCL Industries (CCL.B‐T)

CCL was the strongest performer in November on the back of strong earnings results. The stock was up over 20% versus the TSX at 0.3% and the S&P 500 at 2.8%. This is the first quarter that CCL reported earnings results that included the acquired Avery Dennison business and results were well ahead of expectations on both revenue growth and margin levels. CCL also announced it will be closing a plant in Penetenguishine, ON, which it plans to integrate into existing manufacturing facilities in the U.S. and Mexico. CCL will likely be able to get a higher valuation for this business under the proposed structure, should it wish to sell these assets down the road.

Tyson Foods (TSN‐US)

Tyson was another strong performer, up 14.5% in November. It had a good earnings report, with revenue and earnings per share growth of 7% and 27%, respectively. The company continues to demonstrate the strength of its improved business model, which we believe will continue to drive the valuation multiple higher.

Cisco (CSCO‐US)

Cisco had a challenging earnings report on the back of weak emerging market results and cautious guidance. We continue to hold the name despite recent weakness as product positioning going forward appears favorable and valuation remains compelling. Accounting for cash on the balance sheet, Cisco is trading at a very attractive 7.6x earnings.

Citigroup (C‐US)

We continue to like Citigroup as an investment. Despite an 8% increase in the share price last month, the stock continues to trade below its tangible book value. Continued improvement in business fundamentals should warrant a share price above book value, and we note that book value continues to grow from its low point in the first quarter of 2010.