Singular Research Director’s Letter : November 2015

A Nice Rebound in October

After the disappointment of September markets staged a nice rebound in October, with the Singular coverage universe outpacing both the S&P 500 and Russell 2000 indices. As we have discussed previously, come earnings season, individual stocks (and thus the overall market) move up or down based on their respective earnings reports. Clearly, the market liked what companies had to say in October.

In addition, macroeconomic conditions seem benign with the FED possibly looking to raise interest rates at its last meeting of the year. Even so, in various speeches and commentary, FED Governors have supplied ample messaging that if there is an increase it should not be read to mean there will be a steady cadence of increases with each successive meeting.

dir-ltr-20151118a

Recapping the table above, for October, the S&P 500 was up 7.78%, the Russell 2000 was up 5.09% and the aggregate Singular List was up 8.87%. For the trailing twelve months, the S&P was up 2.90%, the Russell 2000 was up 0.60%, and the Singular Research List was down 6.13%.

Digging into the companies on our coverage list, as our table below shows, the top performing company on the Singular List was SeaBridge Gold (SA). The company reported positive news regarding its recent drilling results and appears moving closer to bringing in a JV partner in the form of one of the precious metals majors. Our other top performers were generally up with the market, as they had yet to report earnings as of month end.

dir-ltr-20151118b

Our worst performers in October saw their monthly returns driven by various factors although the scale of the declines is small relative to the gains seen among our top 5 gainers. In some cases, such as with GSL, the decline was not due to any fundamental issue but rather appeared to be the result of investors locking in gains after a recent move higher.

dir-ltr-20151118c

At Singular Research we continue to seek out investment ideas that have minimal to no Wall Street coverage. There are a number of uncovered and under-covered names we continue to track with an eye on helping our clients gain an edge. We thank our clients for your support of independent equity research.

Sincerely,

Jeremy Hellman, CFA
Director of Research/Chief Operating Officer