I am an accredited or eligible investor as defined in National Instrument 45-106.




Liis Palmer, Cassels Investment Management, Inc.

Last week the Marquest Monthly Pay Fund (A units) closed at $5.32, up from $5.27 the previous week. The TSX was up 0.7 percent in the same period. Oil prices were higher on concern about Ukrainian tensions. As well, revised economic data showed that Canada had added 42,000 jobs in July.

Leading contributors in the portfolio were Russel Metals (up 4.6 percent), TD Bank (up 1.9 percent) and Pembina Pipeline (up 4.8 percent). Russel Metals is one of the largest metals distribution companies in North America. Revenues, gross margins and operating profit improved in all three of their business segments. Their Metals Service Centres and Steel Distributors segments benefitted from strong demand and higher steel prices. Their Energy Products segments benefitted from strong oil and gas prices and increased drilling activity. The CEO Brian Hedges commented on the strengthening economy in the US and Western Canada. They raised the dividend 9 percent to $0.38 per quarter. Pembina had a 22 percent increase in net revenues for Q2. Performance was strong in Pembina’s Midstream business, showing high volumes and positive pricing.
Laggards in the portfolio were Black Diamond Group (down 5.4 percent), AutoCanada (down 9.2 percent) and AG Growth (down 4.2 percent). Black Diamond is a remote workforce lodging and modular buildings business. They reported strong revenue growth and increased their dividend. However, the stock dropped in sympathy with its competitor, Horizon North Logistics, which missed consensus estimates substantially on a lack of large camp contracts. Despite AutoCanada reporting a strong quarter and OEM approval of another Chrysler acquisition, the stock has traded down on profit taking. The company expects 8-10 acquisitions by next May. Canadian auto sales have been strong, up 11 percent year over year in July.

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