Strad Inc. (SDY – TSX)

Position opened: First purchase on August 10 2018, total average cost of $1.59 CAD

Position closed: Sold April 20 2020, total average proceeds of $2.34 CAD

Hold period: 1.69 years

Rates of return: 47% (simple) and 25.6% (annualized)

Strad was a great example of a company in the unloved energy services sector. Strad had de-levered the balance sheet, and while it was spitting out cash, earnings were poor because of significant amortization charges. Strad realized that it needed to shed the image of being “only” an energy services company, and re-branded itself from “Strad Energy Services” to simply “Strad”. It was eventually taken private in Q1 of 2020, and even at the offer price of $2.39/common share, the company was taken private for an inexpensive 3x cash flow.