Singular Research Director's Letter: September 2018
September S& P 500 defying gravity
In September, U.S. equity markets bucked the historical trends and another rate hike by the Fed while edging slightly higher. However, the Russell 2000 index and the Singular Research coverage list were both slightly lower in September.
Perhaps distracted by the battle regarding the Kavanaugh appointment, it seems many market participants didn't read the fine print in the FED minutes showing a shift to a more hawkish stance toward raising rates very soon.The Fed hinted at up to five more hikes between now and the end of 2019, actions that may appear to be too aggressive. And a tone that likely as of this writing in mid-October has initiated a sharp correction in US Equity markets.
Our top performers for September were an Eclectic group of stocks.
The list was led by Seabridge Gold (SA), up 14.6% benefiting from a recovery and a possible bottoming of gold related equities in September. Our second top performer was Olympic Financial (OLY .TO) up 14.3%. Olympic was bolstered by a better-than-expected earnings report spurring our analyst to his raise his price Target.
Are third best top performer was Emerging Biosolutions ( EBS), up 6.2%. Emergent benefited from the announcement of a significant acquisition marking their entrance in the opioid treatment business acquiring a top private company with a remedy for overdoses called Narcan.
Singular three bottom performers were led by Huttig Building Products, (HBP), off 18.5% Huttig was hurt by the recent hike in interest rates which slows down demand for housing. Our second worst performer was Harvard Bioscinces, (HBIO), down 11.8%. Harvard appeared to be impacted by uncertainties caused by the departure of its CFO and light profit-taking. Are Third worst performer was Salem Media Group (SALM) down 11-75. Salem has been struggling most of the year adjusting is portfolio of stations ridding itself of lower-performing stations while focusing on top performers.
We hosted our Midwestern values conference in Dallas on September 20th featuring ten exciting growth and value ideas. In attendance were top local and regional fund managers, the conference was viewed as an outstanding success.
We thank our clients for their support and input as we move forward in the fourth quarter and toward what we believe will be a strong finish to 2018.