Caldwell North American Equity Strategy ‐ Monthly Update March 2014

Portfolio Additions

We did not have any new additions to the portfolio in February.

Portfolio Deletions

We did not have any deletions from the portfolio in February.

Company Updates: A Few Highlights

CCL Industries (CCL.B‐CDN)

CCL reported their fourth quarter results in February and had another very strong quarter as their transformational acquisition of Avery Labels continued to exceed expectations. CCL is one of the many beneficiaries of a depreciating Canadian dollar which also helped their numbers. The stock traded up 13% on the month as a result of the strong quarter and they also announced a 16% increase to their dividend.

Home Capital Group (HCG‐CDN)

HCG continues to defy the skeptics calling for a Canadian housing crash as they reported another strong quarter in February. Loan growth was ahead of expectations and contributed to the earnings beat in the quarter. We keep a close eye on the quality of their current outstanding loans and it continues to be very strong. The stock was up 12% in February and they also announced a 14.3% increase to their dividend.

Shawcor (SCL‐CDN)

SCL announced $90 million in new contract wins towards the end of February which helped the stock gain 12% for the month. Part of our thesis on the stock was that they would be able to fill their backlog of work which had been declining in the last few quarters. The amount of work they have been bidding on is $900 million which is significantly higher than the current backlog at around 600 million. As a market leader in the pipe coating business, they have a very high success rate when they bid.

Verisign (VRSN‐US)

VRSN reported at the beginning of February and disappointed investors with a very slight decrease to their guidance for 2014 (they actually exceeded expectations on the quarter!). The stock was off almost 15% on the month before rebounding to close the month down only 5%. We took advantage of the sell off near the lows to add to our position. Our investment thesis hinges on their dominant position in the .com/.net website management space and the amount of cash they generate from this. This thesis remains intact and we believe that they will eventually do something interesting with all of the data they control.

BalanceFund_Monthly_March2014