Bruce Campbell, founder and portfolio manager of StoneCastle Investment Management, focuses on investments in Canada and uses relative strength and earnings growth as investing criteria. In this interview with The Gold Report, Campbell highlights four companies in a wide spectrum of industries that he says are flying under the radar right now.
The Gold Report: Would you talk a little bit about your investing philosophy?
Bruce Campbell: StoneCastle invests primarily in Canada, and a number of different things fit into our portfolio. We always look at the world and try to figure out whether or not we’re on offense or defense; that’s the first step of our investment process. When we are on offense, we’re fully invested. If we’re on defense, we’re less than fully invested and can have substantial amounts of cash.
We’re pretty tactical with that. We’ll move from cash to being invested over a fairly quick period. So as we see a number of different indicators that we follow move one way or the other, we either bring our risk up or bring our risk down in the portfolio. And when I talk about substantial amounts of cash, it’s not unheard of for us to have 40%-plus cash in a portfolio. Certainly in 2016 there have been times when we had that much cash. We’re not there right now; we’re actually fully invested.
Looking at the bottom-up side, we’re all-caps so we’ll scour the universe to find companies that meet our criteria. We’re generalists, so we really go anywhere and everywhere.
Typically, we’re looking for companies that have some type of catalyst that’s going to be driving their earnings, revenue and cash-flow profile either now or in the immediate future. And again, that’s anything in Canada, whether a small cap, a midcap or a large cap.
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