Pro Picks: 3 Ideas from Bay Street Best
Investment idea's from Moez Kassam of Anson Funds
Pro Picks: Where Moez Kassam Is Investing NOW
WATCH: How does one of Bay Street’s top fund managers consistently deliver 15% annualized returns while navigating controversy and volatility? In this episode of In the Money with Amber Kanwar, Moez Kassam, Chief Investment Officer & Founder of Anson Funds, shares the secrets behind his success—from finding catalysts in overlooked markets to using activism to unlock value.
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1. Gildan Activewear (GIL)
Gildan Activewear is a global apparel manufacturer that recently navigated a high-profile activist campaign, resulting in the reinstatement of founder and CEO Glenn Chamandy.
Reasons for Interest:
Experienced Leadership: Moez highlights Glenn Chamandy proven track record and ability to build shareholder value, emphasizing his experience and access to low-cost capital.
Market Opportunity: A 30-40% stock decline, driven by tariff concerns related to a Bangladesh manufacturing facility, presents a buying opportunity.
Cost Advantage: Gildan’s position as a low-cost producer is expected to support market share growth in a softening economic environment.
Board Restructuring: Moez notes the involvement in installing a new, highly qualified board to enhance governance and strategic direction.
Upside Potential: Moez projects a 30% return in the near term, with additional long-term growth potential due to Gildan’s cost-efficient operations.
Additional Context: Moez’s firm was actively involved in the activist campaign alongside Browning West, having previously held and sold a stake before re-entering the stock following the recent pullback.
2. Vistry Group (VTY.L)
Vistry Group is a UK-based homebuilder focused on social housing, which has faced recent challenges but remains a core holding for Moez.
Reasons for Interest:
Valuation Discount: The stock trades at 4-5 times earnings with a £2 billion market cap, down 50% due to recent operational issues, offering a compelling valuation.
Strong Leadership: CEO Greg Fitzgerald, with a history of three successful exits, is viewed as capable of navigating current challenges.
Cash Flow Generation: Despite setbacks, Vistry generates significant cash flow and is actively pursuing share buybacks.
Prior Activism Success: Moez participated in activism supporting a merger of two major homebuilders, providing deep insight into the company’s operations and management.
Upside Potential: The 50% decline and strong fundamentals suggest significant recovery potential.
Additional Context: Recent earnings warnings stemmed from mismanaged cash flows and production issues, disclosed under UK regulatory requirements. Moez’s firm conducted extensive due diligence, including meetings with management in London, to reaffirm confidence in the investment.
3. InterRent REIT (IIP.UN)
InterRent REIT is a multi-residential real estate investment trust focused on Ontario, where Moez’s firm is the largest shareholder.
Reasons for Interest:
Undervaluation: The stock trades at a 30%+ discount to its net asset value (NAV), presenting a value opportunity.
Robust Portfolio: InterRent owns 12,000 apartments, primarily in the Greater Toronto Area, a region with strong rental demand.
Cash Flow Utilization: With a 10% adjusted funds from operations (AFFO), Moez advocates for share buybacks over new acquisitions to maximize shareholder value.
Governance Focus: Moez is engaged in constructive dialogue with the board to prioritize shareholder-friendly actions, such as buybacks and potential strategic alternatives.
Upside Potential: The 30%+ NAV discount indicates substantial upside if governance changes unlock value, with additional potential from a strategic transaction.
Additional Context: Moez confirmed his firm’s significant stake in InterRent, emphasizing the REIT’s attractiveness amid a broader market overlooking such opportunities. Discussions with management focus on aligning strategies with shareholder interests.
DISCLAIMERS: The information provided in this podcast is for informational purposes only and does not constitute financial, investment, or professional advice. The views expressed by the host and guests are their own and do not necessarily reflect the opinions of any organization or company. The host and guests may maintain positions in any securities discussed on the podcast. Always consult with a qualified financial advisor or professional before making any investment decisions.