2 Recent Buys – FSV, EQX

BuySell

A quick update on two purchases in my portfolio from last week.

  • First purchase: I initiated a new position in FirstService Corp (FSV.TO) @ CAD $122.00. I have had my eye on FSV for about a year and finally pulled the trigger on a starter position. FSV is real estate operating company (REOC) company with operations in US & Canada (95/5 split). This company flies under the radar for different reasons, but is an excellent capital allocator; has a long runway of organic and acquisitive growth; dominant competitive position; market leader in a fragmented market; owner-operator management team, dividend grower (just a 0.65% starting yield though) … and the list goes on. The IR chartdeck has detailed info & can be found here.
  • Second purchase: I added to my position in Equinox Gold (EQX.TO) @ CAD $7.88. I originally bought Equinox in May 2018. The company is chaired by the legendary Ross Beaty, who is a serial entrepreneur and has built some of the largest silver mining companies in world. His first company was the same name and Beaty has mentioned that he wants to bookend his career with two companies called Equinox, so this could possibly be his last endeavor. Equinox is a mid-tier gold producer (about 200-230K oz/yr), but has big ambitions to become a major producer (mostly via acquisitions). To date, Equinox has executed perfectly since my first purchase including: raising investments from Mubadala (the Abu Dhabi investment vehicle for UAE), consolidating shares 5:1, cross-listing on NYSE; graduating from TSX-V to TSX (effective today Nov 25, 2019). Management has communicated that next step is to get included in index funds (such as GDXJ and/or other funds) following the cross-listing and graduation to TSX, which should open up the company for more institutional funds to flow. Most companies struggle to execute on all these promises, but EQX has delivered and I continue to be bullish on this name.

What are your thoughts on these purchases. Share a comment below.

Full Disclosure: Long FSV, EQX. Our full list of holdings is available here.

Recent Buy – EQX

BuySell

A quick update on a recent purchase in my portfolio. This round is a new position in my portfolio.

Although I have been pulling back from the Basic Materials sector since the sector has grown to a big part of my overall portfolio, I find some good lucrative businesses to invest in, as the sector still remains one of the most undervalued sectors of the economy. I initiated a new position in Equinox Gold (EQX.V).

I bought the company in two tranches, first in May and the second earlier this month. I own a total of 2,000 shares with an average cost basis of C$1.05.

Recent Buy Decision

  • A company chaired by Ross Beaty, a legend in the mining sector. Ross Beaty is a serial entrepreneur, who has started, run, grown and sold a series of successful businesses over the past few decades. While the management team is young, Ross’ leadership should guide this company to a successful outcome. In addition, Ross’ first successful company was also called Equinox, and he has indicated that he wants sandwich his career with two companies with same names.
  • His success has resulted in fortunes being made by many investors and I intend to join that club with this investment. Betting on smart, successful entrepreneurs with a proven track record make this a relatively safer speculation. While Ross has built his career in the silver sector, he has turned his attention to gold on this company. Ross thinks that gold mining is more lucrative in current environment.
  • The company owns resources in US (Castle Mountain, California) and Brazil (Aurizona); while owning some other assets in other countries including Ecuador, Canada etc. In fact, last night it was announced that Equinox will spin off its copper assets to create Solaris Copper.
  • The company is on a fast track to start producing gold. Aurizona is on track to start pouring before the end of the year. The resource estimates show that this will be a producing mine for decades to come.
  • The company also intends to grow substantially to become a major mid-tier mining company via acquisitions with its $200M debt facility.

For more details, see Equinox Gold’s corporate presentation.

Full Disclosure: Long EQX.V. Our full list of holdings is available here.