Position opened: First purchase on July 26 2007, total average cost of $5.55 CAD
Position closed: Held as of September 2020. Current price at September 2020 of ~ $14.00 CAD, plus $4.40 CAD dividends ($$18.40 CAD)
Hold period: 13.2 years
Rates of return: 239% (simple) and 9.66% (annualized)
Part of this position is still held today (Sept. 2020), as it has managed to keep paying (steadily) for all these years, and the current return on cost ($0.40 CAD/share) is still a very respectable 7.2%. Terravest was purchased back in 2007 as it was coming off a bad year. Earnings were down due to a large one time write down of goodwill, but the company was still managing to pay down debt. Cash flow (which is far more important than earnings) was solid at $24.6 MM CAD for fiscal 2006, which equated to $1.39 per share. At this sort of cash flow multiple, it seemed like just a matter of time before the price improved. While the annualized return shown here isn’t eye popping, it does demonstrate that small companies can often be overlooked, and can provide solid income over the long haul.
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