Position opened: First purchase on May 14 2001, total average cost of $2.39 CAD

Position closed: Last sale on February 02 2006, total average proceeds of $2.29 CAD, plus $2.62 CAD dividends ($4.91 CAD)

Hold period: 4.72 years

Rates of return: 105% (simple) and 16.41% (annualized)

I probably could have done better with this had I not held it as long, as one can see that the final sale price is actually less than the original purchase price. However, as a novice investor I was hesitant to pull the trigger on something that kept paying me. This company was a good example of something that lived in total obscurity – a small technology company headquartered in Quebec. At the time that I invested in Promatek, it was debt free and for every dollar of revenue, approximately $0.40 flowed to the bottom line – and that was after taxes. This company was the confirmation (for me) that prices could be very inefficient at the small cap end of the market.

Leave a Reply