Companies in the same industry are not the same!

Michael Rudd, CFA | President, CEO and Portfolio Manager

As I typed the date above, I couldn’t believe that we were already at “back to school” (sort of). Where did the time go? It was a strange summer indeed and I suspect that the fall will be even stranger with oscillations between COVID-19 therapeutics, second waves, vaccines, economic stagnation/recovery and what is bound to be a hotly contested US election. I hope the fall goes as fast as the summer! Last week, we wrote about the end of earnings season and this week I wanted to write about “meetings” season. There is a period of about 6 weeks after earnings season where meetings often take place between companies and investors. These can be either in person at the investor’s office, at the company’s office/plant/mine etc., in groups at a stockbroker’s office or in some cases in a conference setting. The Pathfinder Investment Team meets with more than 500 companies a year, so we engage in all of the above. What is interesting in the current environment is that much of the in-person meetings have stopped for obvious reasons, so now most of these meetings are done via video conference. I suspect this type of format will continue. This past week, we “attended” an Infrastructure Conference and were able to have management meetings (CEOs & CFOs) with a number of companies that we invested in and follow. I wanted to highlight one of those companies today.

  • WPT Industrial REIT (TSX:WIR.U) is a company that owns industrial buildings in mainly the eastern US economic corridor. They have always focused on leasing their purpose-built properties to logistics, ecommerce and consumer staples companies, which as you can imagine is paying dividends now. They have no vacancy, no bad debt, no clients in distress and have actually been able to increase both rental rates and gross leasable area by expanding their buildings.
  • Other real estate firms have had a significantly different experience. Retail has had to struggle through mall closures, significantly reduced traffic and bankruptcies. Office has had to deal with vacancies, sub-leases, valuation impairments and a future change in work habits, while Residential has seemed to fare well but that could change if government support programs are reduced. Furthermore, within the Industrial sector, it is the focus on logistics and e-commerce that have really provided value. E-commerce is booming and inventory & supply chain management needs have made logistics companies indispensable. The other specialized industrial businesses are not as strong and have not seen the same boom as logistics.

“This means that” we will continue to spend the time and energy to deeply understand the businesses that we own. We have owned WIR.U for years and have been able to reinitiate and increase our position during the stress of the pandemic because of the time that we had previously taken to understand the business and management’s operating philosophy.

Pathfinder Asset Management Ltd. | Equally Invested™
1320-885 W. Georgia Street, Vancouver, BC V6C 3E8
E | T 604 682 7312 |
Sources: Pathfinder Asset Management Limited

National Instrument 31-103 requires registered firms to disclose information that a reasonable investor would expect to know, including any material conflicts with the firm or its representatives. Doug Johnson and/or Pathfinder Asset Management Limited are an insider of companies periodically mentioned in this report. Please visit for full disclosures.

*All returns are time weighted and net of investment management fees. Returns from the Pathfinder Partners’ Fund and Pathfinder Real Fund are presented based on the masters series of each fund. The Pathfinder North American Equity Portfolio and The Pathfinder North American Income Portfolio are live accounts. These are actual accounts owned by the Pathfinder Chairman (Equity) and client (High Income) which contain no legacy positions, cash flows or other Pathfinder investment mandates or products. Monthly inception dates for each fund and portfolio are as follows: Pathfinder North American Equity Portfolio (January 2011), Pathfinder North American High-Income Portfolio (October 2012) Pathfinder Partners’ Fund (April 2011), Pathfinder Real Fund (April, 2013), and Pathfinder International Fund (November 2014).

Pathfinder Asset Management Limited (PAML) and its affiliates may collectively beneficially own in excess of 10% of one or more classes of the issued and outstanding equity securities mentioned in this newsletter. This publication is intended only to convey information. It is not to be construed as an investment guide or as an offer or solicitation of an offer to buy or sell any of the securities mentioned in it. The author has taken all usual and reasonable precautions to determine that the information contained in this publication has been obtained from sources believed to be reliable and that the procedures used to summarize and analyze such information are based on approved practices and principles in the investment industry. However, the market forces underlying investment value are subject to sudden and dramatic changes and data availability varies from one moment to the next. Consequently, neither the author nor PAML can make any warranty as to the accuracy or completeness of information, analysis or views contained in this publication or their usefulness or suitability in any particular circumstance. You should not undertake any investment or portfolio assessment or other transaction on the basis of this publication, but should first consult your portfolio manager, who can assess all relevant particulars of any proposed investment or transaction. PAML and the author accept no liability of any kind whatsoever or any damages or losses incurred by you as a result of reliance upon or use of this publication.