Formula Growth Limited€¦ · Jan 2012 Formula Growth Alpha Fund C$ equivalent 27.8% 19.7% 19.6%...
Transcript of Formula Growth Limited€¦ · Jan 2012 Formula Growth Alpha Fund C$ equivalent 27.8% 19.7% 19.6%...
New York
28 West 44th Street, Suite 1516
Montreal
1010 Sherbrooke W. Suite 2300
Investor Wealth
Creation Since 1960
Hong Kong
(PhoenixInvest)
27/F, Two Exchange Square
Formula Growth Limited2016 U.S. Outlook
January 2016
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Historical context
• Founded in 1960 by John Dobson, we specialize in bottom-up stock selection
• We focus on less efficient markets where we believe more alpha can be generated
• U.S. small/mid cap stocks since 1960 & Asia small/mid cap stocks since 2009
• Long history of outperformance for all our different funds
• C$840 million with a team of 9 investment professionals (16 total)
• Research offices in Montreal, New York City and Hong Kong
• 100% employee owned with strong alignment of interest
CONFIDENTIAL – NOT FOR DISTRIBUTION
AUM are estimated as of January 1st 2016
1960 1976 2002 2009 2011 2014
Formula Growth
Fund
First Institutional
Account
Formula Growth
Hedge Fund
Formula Growth
GOF
Formula Growth
Alpha Fund
Formula Growth
Focus Fund
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Investment Team: Experienced, Qualified, Stable
CONFIDENTIAL – NOT FOR DISTRIBUTION
* Formula Growth Management Company Inc is a U.S. subsidiary 100% owned by Josyd Inc, the parent company of Formula Growth Limited. PhoenixInvest, as of January 28th
2016, will be a majority controlled subsidiary of Josyd Inc, the parent company of Formula Growth Limited.
Name Position LocationYears at
FG
Total
Industry
Randall Kelly, CPA, CFA CEO and Chief Investment Officer Mtl 31 37
John Liddy, MBA President and Director of Research (FGMC Inc.*) NYC 21 25
Tony Staples, CFA Vice President & Senior Portfolio Manager Mtl 18 22
Michael Gentile, CFA Vice President & Senior Portfolio Manager Mtl 14 16
Nelson Cheung, CFA Vice President & Senior Portfolio Manager (PhoenixInvest*) HK 6 16
Charles Haggar, CPA, CFA Vice President & Senior Portfolio Manager Mtl 9 12
Cameron Fortin Portfolio Manager Mtl 11 11
James Sinclair, CFA Vice President & Economist (FGMC Inc.*) NYC 10 10
Lucy Chher Analyst, Trading and Risk Management Mtl 4 4
René Catafago, CA, CFA Executive V-P & Chief Financial Officer Mtl 28 43
Ari Kiriazidis, CFA Vice President Operations and Chief Compliance Mtl 14 14
Rodney McCollam Vice President and Corporate Controller Mtl 15 35
Mathieu Boisvert, M.Sc. Vice President Mtl 2 14
Alexa Dorsainville, CPA Director of Finance Mtl 1 6
Rosanna Vitale Administrative Assistant Mtl 19 19
Tony Naaman Associate Mtl 1 1
INVESTMENT MANAGEMENT
BUSINESS MANAGEMENT
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Buy &Sellside
Network of over 55 years
Conferences&
Management meetings
InternalDatabase≈ 3,000 stocks
CompanyExecutives
All products leverage a common research platform
CONFIDENTIAL – NOT FOR DISTRIBUTION
Universe of 4 000 U.S. SMid stocks
TRADITIONAL LONG ONLY
FG
FUND
Launch 1960
EQUITY LONG SHORT
FG
HEDGE FUND
Launch 2002
EQUITY MARKET
NEUTRAL
FG
ALPHA FUND
Launch 2012
TEAM OF 7 PORTFOLIO MANAGERS
Buy & Sellside
Network of over 25 years
Conferencesand
Management meetings
Quantitative Filters &
Databases
Universe of 2 500 Asian stocks
TRADITIONAL LONG ONLY
JAVELIN SELECT CHINA
Launch 2010
EQUITY LONG SHORT
FG
GOF
Launch 2009
EQUITY
LONG SHORT
PhoenixInvest
PACIFIC
Launch 2010
TEAM OF 3 PORTFOLIO MANAGERS*
CompanyExecutives
* PhoenixInvest, as of January 28th 2016, will be a majority controlled subsidiary of Josyd Inc, the parent company of Formula Growth Limited.
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55+ years of success investing U.S. SMid Equities
CONFIDENTIAL – NOT FOR DISTRIBUTION
Cumulative return:
3x the S&P500 TR
Inception: 1960
Cumulative Return:
3x the S&P500 TR
Annualized Return:
FG Fund: 12%
S&P500 TR: 10% FGHF
FG Alpha
Formula Growth Fund 2015Trailing
3 Yr.
Inception
1960
Formula Growth Fund C$ 9.6% 23.9% 13.0%
Formula Growth Fund US$ -8.2% 11.0% 12.2%
Source Formula Growth, Bloomberg. All returns are net of fees and in US$ unless specified. The Russell2000 was only launched in 1979.
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13+ years of success investing Long/Short U.S. SMid Equities
CONFIDENTIAL – NOT FOR DISTRIBUTION
Cumulative return:
5x the HFRI EH
3.5x the S&P500 TR
Inception: 2002
Historical Market Capture:115% of positive equity markets
55% of negative equity markets
Annualized Return:FG HF: 19%
S&P500 TR: 8%
HFRI EH: 6%
FGHF FG Alpha
Formula Growth Hedge Fund 2015Trailing
3 Yr.
Inception
Dec 2002
Formula Growth Hedge Fund C$ 25.9% 17.1% 17.4%
Formula Growth Hedge Fund US$ 9.3% 7.3% 19.0%
Oct 07 - Feb 09
S&P500 TR: -51%
HFRI EH: -31%
FG HF: -22%
Source Formula Growth, Bloomberg. All returns are net of fees and in US$ unless specified. The HFRI EH is a hedge fund index composed of the returns of long/short equity managers.
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4+ years of success investing U.S. SMid Equity Market Neutral
CONFIDENTIAL – NOT FOR DISTRIBUTION
Cumulative return:
1.3x the HFRI EH
Corr. 0.3 vs S&P500 TR
Inception: 2012
Historical Market Capture:45% of positive equity markets
0% of negative equity markets
Annualized Return:FG Alpha: 11%
HFRI EMN: 4%
10yr TBill: 3%
FG Alpha
Formula Growth Alpha Fund 2015Trailing
3 Yr.
Inception
Jan 2012
Formula Growth Alpha Fund C$ equivalent 27.8% 19.7% 19.6%
Formula Growth Alpha Fund US$ 7.1% 7.2% 10.7%
Source Formula Growth, Bloomberg. All returns are net of fees and in US$ unless specified. The HFRI EMN is a hedge fund index composed of the returns of equity market neutral managers.
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We haven’t been in a Bull Market for a year and a half…
Current markets
CONFIDENTIAL – NOT FOR DISTRIBUTION
Source: Cornerstone Macro
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We are back to the same level as 2-3 years ago…7 years ago for Emerging Markets
Current markets
CONFIDENTIAL – NOT FOR DISTRIBUTION
Source: Cornerstone Macro
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We are back to the same level as 2-3 years ago…7 years ago for Emerging Markets
Current markets
CONFIDENTIAL – NOT FOR DISTRIBUTION
Source: Cornerstone Macro
Over 24 months…
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Historically, there have been 30 declines of 20%+% the average market decline is
30% and lasts for 7-8 months
Current markets
CONFIDENTIAL – NOT FOR DISTRIBUTION
Source: Cornerstone Macro
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Our 2016 Outlook
CONFIDENTIAL – NOT FOR DISTRIBUTION
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• Global growth is slowing due to China and other energy exporting countries such as Russia
and Brazil
• The U.S. economy should be solid in 2016
Bear Market Causes: Slower global growth
CONFIDENTIAL – NOT FOR DISTRIBUTION
Source: Cornerstone Macro
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Bear Market Causes: Collapsing Commodities
CONFIDENTIAL – NOT FOR DISTRIBUTION
• Oil slide has been relentless…
WTI Crude Oil
Source: Cornerstone Macro
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Bear Market Causes: Wider Credit Spreads
CONFIDENTIAL – NOT FOR DISTRIBUTION
High-Yield credit spreads represented by the Markit CDX North America high-yield index, which tracks the credit-default swaps of 100 non-investment grade companies
• High yield spreads have widened over 500 bps since mid 2014…
• …as Energy has fallen into distress
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• China is decelerating and investors unimpressed with Chinese authority policy response
Bear Market Causes: China wildcard
CONFIDENTIAL – NOT FOR DISTRIBUTION
Source: Cornerstone Macro
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U.S. fundamentals: Still Intact
CONFIDENTIAL – NOT FOR DISTRIBUTION
Source: Cornerstone Macro
Auto sales are strong
Housing sector recovery continues Employment is solid
Consumer spending recovering
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U.S. Fundamentals: Recession risk seems low
CONFIDENTIAL – NOT FOR DISTRIBUTION
“Here are the 11 variables used to calculate our Recession Risk Model, with only 1
indicating the probability of a U.S. recession is over 50%. As a result of these low odds, we
believe this expansion could last another 4 years.” – Cornerstone Macro, January 4th 2016
Source: Cornerstone Macro
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U.S. Fundamentals: FG checks confirm stability
Management teams that the FG team met with over the past 2 months:
CONFIDENTIAL – NOT FOR DISTRIBUTION
1-800-Flowers.com Inc-Cl A
2U Inc
8X8 Inc
Aaron’s Inc
Acadia Healthcare Co Inc
Acuity Brands Inc
Agco Corp
Airgas Inc
Alamos Gold Inc-Class A
Albertsons Cos Inc
Ametek Inc
Anadarko Petroleum Corp
Apache Corp
Arcbest Corp
Argos Therapeautics Inc
ARM Holdings PLC-Spons ADR
Asbury Automotive Group
Atalssian Corp PLC-Class A
AVG Technologies
B&G Foods Inc
Bankrate Inc
Barrett Business SVCS Inc
Basic Energy Services Inc
Bazaarvoice Inc
Beazer Homes USA Inc
Bill Barrett Corp
BMC Stock Holdings Inc
Boston Beer Company Inc-A
Brunswick Corp
Builders FirstSource Inc
Bunge Ltd
Caesarstone Sdot-Yam Ltd
Cal-Maine Foods Inc
Carbo Ceramics Inc
Cardiovascular Systems Inc
Cardtronics Inc
Carmike Cinemas Inc
Carrizo Oil & Gas Inc
Casey’s General Stores Inc
CBOE Holdings Inc
Cemex Sab-Spons ADR Part Cer
Cenovus Energy Inc
CGI Group Inc - Class A
Chefs’ Warehouse Inc/The
Chegg Inc
Cherokee Inc
Cimarex Energy Co
Citi Trends Inc
C&J Energy Services Ltd
Clorox Company
Concho Resources Inc
Conn’s Inc
Consol Energy Inc
Container Store Group Inc/The
Continental Resources Inc
Cooper Tire & Rubber
Core-Mark Holding Co Inc
Coty Inc-Cl A
CPI Card Group Inc
Credit Acceptance Corp
Cree Inc
CSI Compressco LP
Darling Ingredients Inc
Deckers Outdoor Corp
Deere & Co
Del Taco Restaurants Inc
Devon Energy Corp
DHX Media
Diamondback Energy Inc
Domino’s Pizza Inc
Dorman Products Inc
Drew Industries Inc
Edgewell Personal Care Co
Encana Corp
Endurance International
EOG Resources Inc
Eros International PLC
Euronet Worldwide Inc
Expeditors Intl Wash Inc
Exponent Inc
Express Inc
Extended Stay America Inc
Fairmount Santrol Holdings Inc
Financial Engines Inc
First Data Corp-Class A
First Financial Bankshares Inc
Fleetcor Technologies Inc
FMC Technologies Inc
Foot Locker Inc
Forrester Research Inc
Fossil Group Inc
Freightcar America Inc
Fresh Del Monte Produce Inc
Freshpet Inc
FTI Consulting Inc
General Motors Co
Genworth Finanical Inc-Cl A
Gigoptix Inc
Gildan Activewear Inc
Globant SA
Golar LNG Partners LP
Grand Ocean Advanced Resources
Gray Television Inc
Guess Inc
Gulfport Energy Corp
Halogen Software Inc
Hain Celestial Group Inc
Harley-Davidson Inc
Harman International
Helmerich & Payne Inc
Hertz Global Holdings Inc
Hill International Inc
HMS Holdings Corp
Hormel Foods Corp
Houghton Mifflin Harcourt Co
Huntington Ingalls Industries
Imax Corp
Incontact Inc
Ingersoll-Rand PLC
Innova Gaming Group
Installed Building Products
Intersect ENT Inc
Intertain Group Inc
Inventure Foods Inc
J & J Snack Foods Corp
KB Home
Keurig Green Mountain Inc
Kimberly-Clark Corp
Kinder Morgan Inc
Kirby Corp
Kirkland Lake Gold
Kirkland’s Inc
Klondex Mines Ltd
Knight Transportation Inc
Kraft Heinz Co/The
Krispy Kreme Doughnuts Inc
L Brands Inc
Lennox International Inc
Libbey Inc
Lindsay Corp
Lithia Motors Inc-Cl A
Lukoil PJSC-Spon ADR
Lululemon Athletica Inc
Lumber Liquidators Holdings
Malibu Boats Inc- A
Manhattan Associates Inc
Manitowox Company Inc
Marathon Oil Corp
Marinemax Inc
MarketAxess Holdings Inc
Marketo Inc
Masco Corp
Mastec Inc
MCBC Holdings Inc
Men’s Wearhouse Inc/The
Methods Electronics Inc
Mix Telematics Ltd-SP ADR
Monro Muffler Brake Inc
Monster Worldwide Inc
Moody’s Corp
Movado Group Inc
MRC Global Inc
Nationstar Mortgage Holdings
NCI Building Systems Inc
Newmarket Gold
Nielsen Holdings PLC
Noble Energy Inc
Nuance Communications Inc
Nutrisystem Inc
Oasis Petroleum Inc
Oceaneering Intl Inc
Och-Ziff Capital Management-A
Old Dominion Freight line
Opower Inc
Owens Corning
Papa Murphy’s Holdings Inc
Parsley Energy Inc
PDC Energy Inc
Performance Food Group Co
Perry Ellis International
Pioneering Natural Resources Co
Ply Gem Holdings Inc
Polycom Inc
Proto Labs Inc
Q2 Holdings Inc
QAD Inc-A
QEP Resources Inc
Qorvo Inc
Quaker Chemical Corp
Qualcomm Inc
Quanex Building Products
Rackspace Hosting Inc
Ranges Res Corp
Realogy Holdings Corp
Redknee Solutions
Renewable Energy Group Inc
Richmont Mines
RingCentral Inc-Class A
RLI Corp
Roadrunner Transportation SY
Rockwell Automation Inc
Roper Technologies Inc
Rovi Corp
RSP Permi
Rush Enterprises Inc-Cl A
SciQuest Inc
SeaWorld Entertainment Inc
Select Comfort Corporation
ServiceNow Inc
Sherwin-Williams Co/The
Shopify Inc-Class A
Shoretel Inc
Sigma Designs Inc
Silicon Graphics International
Skyworks Solutions Inc
Smith & Wesson Holding Corp
Snyders-Lance Inc
Southwestern Energy Co
SpartanNash Co
Spirit Airlines Inc
Square Inc - A
Steelcase Inc-Cl A
Stratasys Ltd
Sunopta Ltd
Supercom Ltd
Sysco Corp
Tangoe Inc/Ct
Targa Resources Corp
Teladoc Inc
Tempur Sealy International I
Terex Corp
Tesla Motors Inc
Titan Machinery Inc
Toll Brothers Inc
Transdigm Group Inc
Trex Company Inc
TriNet Group Inc
TrueBlue Inc
TubeMogul Inc
Twitter Inc
Ubisoft Entertain-Unspon ADR
Under Armour Inc-Class A
United Natural Foods Inc
USG Corp
Valeant Pharmaceuticals Inc
Veeco Instruments Inc
VF Corp
Virtu Financial Inc-Class A
Wal-Mart Stores Inc
Wayfair Inc- Class A
WD-40 Co
Web.Com Group Inc
WebMD Health Corp
Whiting Petroleum Corp
William Lyon Homes-Cl A
World Wrestling
WPX Energy Inc
WSP Global Inc
XPO Logistics Inc
Yelp Inc
YRC Worldwide Inc
Zendesk Inc
Zillow Group Inc - C
Zumiez Inc
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U.S. Fundamentals: Corporate profits may rebound
CONFIDENTIAL – NOT FOR DISTRIBUTION
If earnings are up, the market usually follows…
• Earnings were down in 2015 per the negative contribution of energy (down 60%), industrials
(down 10%) and materials (down 5%)
• Price to earnings of the market is roughly 18x, about the same as early last decade
• Market returns have historically been correlated with earnings
Earnings
S&P 500 Return ?Source IBES Estimates, Formula Growth Ltd.
S&P 500 Return vs Earnings
?
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Global weakness/U.S. strength: Throwback to 1998!
CONFIDENTIAL – NOT FOR DISTRIBUTION
Source: Cornerstone Macro
• The current environment reminds us of the late 1990s: similar P/E, good employment, etc.
• This is also a period that lived through many crisis and therefore volatility
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U.S. Outlook and Actions
• Bear market caused by commodities/credit/China: therefore watching these
factors for abatement
• U.S. Corporate profits fell in 2015 because of energy and materials: therefore
working hard to understand whether profit weakness is spreading
• Bullish wildcards include continued corporate M&A, renewed central bank easing,
widespread fear and underinvestment
CONFIDENTIAL – NOT FOR DISTRIBUTION
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Why Formula Growth?
CONFIDENTIAL – NOT FOR DISTRIBUTION
FORMULA GROWTH PROPOSITION
50+ yrs of Investment Success with a Stable & Experienced Team
Proven Alpha generation through Many Investment Cycles
Expertise in a Less Efficient Small/Mid cap equity markets
Strong risk management tools & controls
Important Alignment of Interest, Integrity & Transparency
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Appendix
CONFIDENTIAL – NOT FOR DISTRIBUTION
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Green Mountain Coffee (NYSE: GMCR)
CONFIDENTIAL – NOT FOR DISTRIBUTION
Idea: The firm has been actively involved, both long and short, since 2011.
Investment Thesis: Since our last long involvement in 2012-13, GMCR succeeded in: eliminating their unlicensed competition, replacing their
management team, and became more of a “real” business that generated respectable free cash flow and ROIC. However, due to the market’s
unreasonably high expectations for their Kold platform (via a partnership with Coca Cola which didn’t gain the traction) some had hoped to
see stock collapsed from its high of $150 to the mid-$40s. Meanwhile, consumption of it’s core K-Cup products were a healthy +12-15% and
the stock traded at 12.5x EPS. We saw a lot of value in the context of other CPG stocks with barely any organic growth that commanded 20-
25x PE multiples.
Evolution: JAB Holdings acquired the company in December for $92/share in cash, a 78% premium to prior close.
Purchase
Exit
26CONFIDENTIAL – NOT FOR DISTRIBUTION
Idea: We had a long history with the company as we had owned it throughout 2003-2004 (from $5 to $12). The regional broker KC Capital had
followed it since 2000 and gave us a call when the stock was trading around $10-11. We resumed our work from where we had left it off when
we sold the stock in 2004.
Investment Thesis: Peru fishing season was at risk due to “El Nino” tightening global supply and leading to an increase in prices. The stock fell
below book value of $11 and the cost cutting was going to increase OME’s EBITDA margin. A US peer (Daybrook Fisheries) sold for 8x
EBITDA while OME was traded at a multiple of 3x.
Evolution: We bought initial position at the $10-12 range with a $16-17 price target. Activist filed a stake requesting strategic alternatives and
we increase our position size at $12-14 raising our target price to $20. The company then beat EPS and EBITDA estimates per the increase in
prices and volumes (our thesis). Stock then traded at $20 where we decided to exit as it had reached our target price.
Purchase
Exit
Omega Protein (NYSE: OME)
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Owens Corning (NYSE: OC)
CONFIDENTIAL – NOT FOR DISTRIBUTION
Idea: We had researched building products companies early in the building cycle – 2010.
Investment Thesis: Returned to Owens Corning on the long side as we recognized that quickly falling oil prices would
lower the input cost of asphalt which is important in the roofing shingle business.
Evolution: Analysts steadily recognized the benefit of lower cost of goods by raising estimates throughout late 2014 and
mid 2015. We built the stock into largest position and exited when it reached our price target.
Purchase
Exit
28
RNG (NYSE: RNG)
CONFIDENTIAL – NOT FOR DISTRIBUTION
Idea: Met with the company during the IPO roadshow in 2013.
Investment thesis: RNG's software as a service (SAAS) offering is replacing legacy communication systems (Avaya, Cisco, Genessis) with a
software PBX. RNG has a more powerful mobile first product with lower total cost of ownership for the customer. It is a very large market
at $50B globally and cloud is only 5-10% penetrated. Organic growth has been running 30%+ y/y since our entry. It came public with -19%
op. margin in 2013, but had consistently showed leverage reaching Op. margin B/E in Q3 2015. We saw a long run way for growth as they
continue to succeed in moving up market.
Evolution: Involved in Sept 2013 IPO. Re-engaged in May of 2014 post the melt down of SAAS valuations. Spent time with management at
May JPM conference to confirm thesis. Built position throughout 2014 and traded around the position in 2015. As they proved model
durability their valuation expanded from 2x EV/S to now near 3x 17 EV/S. Still a discount to other 30%+ SAAS names and LT earnings
potential. We exited when it reached our target price.
Purchase
Exit
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Short NTRI (NYSE: NTRI)
CONFIDENTIAL – NOT FOR DISTRIBUTION
Idea: Originated from research on publicly traded peers MED and WTW, Formula has been following the group for a long period
of time.
Investment Thesis: The dieting business is notoriously driven by fads and trends, indeed, NTRI has stated it needs to replace 75%
of its customers each diet season. Spokespeople are a particularly effective marketing tool to drive traffic and in late 2015 Weight
Watchers signed a partnership with arguably the most impactful celebrity possible for the target demographic: Oprah. The last case
study was in 2011 when WTW signed Jennifer Hudson, their revenues and stock price increased markedly while NTRI collapsed.
Evolution: Met the management teams of both NTRI and WTW. Early signs of WTW enrollment data were very positive into late
December. NTRI stock fell to within 10% of our 2016 fair value targets and the position was covered.
SHORT SELL
COVER
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Formula Growth Team
CONFIDENTIAL – NOT FOR DISTRIBUTION
Anthony Staples, CFA
VP & Senior Portfolio ManagerAnthony Staples is Vice President & Senior Portfolio Manager of Josyd Inc. the parent
company of Formula Growth Limited and is located Montreal. Over the last 15 years,
Anthony has specialized in U.S. small capitalization public equities with a particular
emphasis on the technology, business services, consumer and healthcare sectors.
Anthony joined Formula Growth in 1997 after four years with a Montreal-based
investment management firm focused on private equity investing. Anthony is also a
part time lecturer in applied investments at McGill University and a mentor in the
Kenneth Woods Portfolio Management Program at Concordia University. A graduate
of McGill University in Economics, he also holds the Chartered Financial Analyst
designation. Mr. Staples’ principle responsibilities involve research, portfolio
construction and management of the firm’s long-only products as well as stock idea
generation for the firm’s entire suite of products including long-short products.
Michael Gentile, CFA
VP & Senior Portfolio ManagerMichael Gentile is Vice President & Senior Portfolio Manager of Josyd Inc. the parent
company of Formula Growth Limited and is located in the Montreal office. Since
joining the firm in 2002, Michael has specialized in the natural resource, consumer and
healthcare sectors. Michael graduated with Great Distinction from the John Molson
School of Business (Concordia University) and received the Calvin Potter Fellowship
from Concordia's Kenneth Woods Portfolio Management Program. He lectures on
Applied Investments at Concordia University. Mr. Gentile’s principle responsibilities
involve research, portfolio construction and management as co-manager for the
firm’s FG Alpha Fund and FG Focus Fund strategies. He also has the responsibility to
generate stock ideas for the firm’s entire suite of products.
* Formula Growth Management Company Inc is a subsidiary 100% owned by Josyd Inc, the parent company of Formula Growth Limited.
John Liddy, MBA
President & Director of Research (FGMC Inc.*)John Liddy is President & Director of Research for Josyd's wholly owned U.S.
subsidiary Formula Growth Management Corp. and is located in the New York office.
A graduate of Waterloo and York Universities, he joined Formula Growth in 1995 after
four years as a growth stock analyst in Toronto. Mr. Liddy’s principle responsibilities
involve leading the research for the firm’s entire suite of investment products.
Randall Kelly, CPA, CFA
Randall W. Kelly is Chief Executive Officer and Chief Investment Officer of Josyd Inc.,
parent company of Formula Growth Limited and is located in the Montreal office of
the firm. A graduate of Concordia and McGill Universities, he joined Formula Growth
in 1984 after six years with Deloitte. Mr. Kelly is responsible for the day-to-day
activities and strategic long-term planning of Formula Growth. More specifically, Mr.
Kelly is responsible for all facets of the business of Formula Growth including its parent
company Josyd Inc. and all affiliated companies and relationships globally. As CIO of
all Formula Growth products Mr. Kelly has ultimate responsibility for all portfolio
construction and management, stock selection, regulatory and professional
compliance, risk management, business development, sales and marketing and
administration.
CEO & CIO
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Formula Growth Team
CONFIDENTIAL – NOT FOR DISTRIBUTION
Nelson Cheung, CFA
VP & Senior Portfolio ManagerNelson Cheung is a Vice President & Senior Portfolio Manager of Josyd Inc. the parent
of Formula Growth Limited and is located in the Montreal office but also spends
approximately a quarter of his time traveling to the Asia Pacific region for research
purposes. He has over ten years of investment experience in portfolio management
of global equities with a particular emphasis on Asian stocks. Prior to joining Formula
Growth, Nelson worked with Acuity Funds where he co-led and helped develop their
global equities effort and at CN Investment Division where he was a Senior Analyst
part of a team that managed $8 billion in equity investments. Nelson is a CFA
Charterholder and graduated from the John Molson School of Business (Concordia
University) with a Bachelor of Commerce degree. He also received the Calvin Potter
Fellowship from Concordia's Kenneth Woods Portfolio Management Program. Mr.
Cheung’s principle responsibilities involve research, portfolio construction and
management for the firm’s Global products.
Cameron Fortin
Portfolio ManagerCameron Fortin is a Portfolio Manager of Josyd Inc.’s wholly owned U.S. subsidiary
Formula Growth Management Corp. and is located in the New York office. A Bachelor
of Commerce graduate from the John Molson School of Business (Concordia
University), Cameron has worked with Formula Growth since 2004. He also received
the Calvin Potter Fellowship from Concordia's Kenneth Woods Portfolio Management
Program. Mr. Fortin’s principle responsibilities involve research and portfolio
management for the firm’s U.S. equity directional hedge funds.
Lucy Chher, MBA
Analyst, Trading and Risk ManagementKheu-Sing (Lucy) Chher is working on trading and risk management in parallel for
Josyd Inc. the parent company of Formula Growth Limited and is located in the
Montreal office. She graduated from McGill University with a Mathematics and
Computer Sciences double major degree in 2001, worked in software engineering and
management at CAE for 10 years before joining Formula Growth. She completed her
MBA studies at Goodman Institute of Investment Management and is a CFA level III
candidate.
Charles Haggar, CPA, CFA
Charles Haggar is a Vice President & Senior Portfolio Manager of Josyd Inc. the parent
company of Formula Growth Limited and is located in the Montreal office. Charles
graduated from the John Molson School of Business (Concordia University) with a
Bachelor of Commerce, major in Finance and McGill University with a Diploma in
accounting. Prior to joining Formula Growth in 2007, he worked for
PricewaterhouseCoopers, CDP Capital, and Montrusco Bolton. Charles has completed
his Charted Accountant and Chartered Financial Analysts designations. He also
received the Calvin Potter Fellowship from Concordia's Kenneth Woods Portfolio
Management Program. Mr. Haggar’s principle responsibilities involve research,
portfolio construction and management as co-manager for the firm’s FG Alpha Fund
and FG Focus Fund strategies. He also has the responsibility to generate stock ideas for
the firm’s entire suite of products.
VP & Senior Portfolio Manager
* Formula Growth Management Company Inc is a subsidiary 100% owned by Josyd Inc, the parent company of Formula Growth Limited.
James Sinclair, CFA
Vice President & Economist (FGMC Inc.*)James is Vice President and Economist for Josyd's wholly owned U.S. subsidiary
Formula Growth Management Corp. and is located in the New York office. A graduate
of McGill University, with a Bachelor of Commerce, major in Finance, James joined
Formula Growth in 2006. James has his Chartered Financial Analysts designation. Mr.
Sinclair’s principle responsibilities involve economic research for the firm’s entire suite
of investment products.
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Formula Growth Team
CONFIDENTIAL – NOT FOR DISTRIBUTION
René Catafago, CPA, CFA
Executive VP & CFORené Catafago is Executive Vice President and Chief Financial Officer of Josyd Inc. the
parent company of Formula Growth Limited and is located in the Montreal office. A
graduate of Université de Montréal, he joined Formula Growth in 1987 after 15 years
in public accounting practice.
Ari Kiriazidis, CFA
VP Operations & CCOAri Kiriazidis is Vice President of Operations and Chief Compliance Officer of Josyd Inc.
the parent company of Formula Growth Limited and is located in the Montreal office.
A Bachelor of Commerce graduate from McGill University and a CFA Charterholder,
Ari has been at Formula Growth since 2001.
Rodney McCollam
VP & Corporate ControllerRodney MCollam is Vice President and Corporate Controller of Josyd Inc. the parent
company of Formula Growth Limited and is located in the Montreal office. A graduate
of Concordia University, he joined Formula Growth in 2000 after more than 20 years
working for both public and private corporations in the Pharmaceutical and
Technology industries.
Rosanna Vitale
Rosanna Vitale is the Administrative Assistant for Josyd Inc. the parent company of
Formula Growth Limited and is located in the Montreal office. She joined Formula
Growth in 1996.
Administrative Assistant
Mathieu Boisvert, M.Sc.
VPMathieu Boisvert contributes to the product development and institutional client
management process at Formula Growth. Located in Montreal he is also a member of
the risk management committee. Prior to joining Formula Growth in 2014 he spent
over 12 years at one of the largest fund of hedge funds in Canada. As Partner and
Portfolio Manager, his role included building fund of hedge fund portfolios on behalf
of Canadian and International institutional investors, conducting investment and
operational due diligence to select hedge fund managers, as well as conducting
performance reviews with clients. He graduated in Economics from McGill and
received a Master’s degree in Finance from Sherbrooke University.
Tony Namaan
AnalystTony Namaan is an analyst and is located in the Montreal office. After graduating
with Honors in Finance from John Molson School of Business (Concordia
University) he joined Formula Growth in 2015.
Alexa Dorsainville, CPA, CA
Director of Finance
Alexa Dorsainville is responsible for the accounting and other treasury functions
of Formula Growth. She graduated from HEC Montreal with a trilingual Bachelor
of Business Administration specializing in Public Accounting and later obtained
her CPA, CA certification. Since 2010 Alexa worked at a public accounting practice
firm and she joined Formula Growth in 2015.
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Disclaimer
CONFIDENTIAL – NOT FOR DISTRIBUTION
THIS DOCUMENT WHICH IS BEING PROVIDED ON A CONFIDENTIAL BASIS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF
ANY OFFER TO BUY WHICH MAY ONLY BE MADE AT THE TIME A QUALIFIED OFFREE RECEIVES AN OFFERING MEMORANDUM (“OM”), CONTAINING
IMPORTANT INFORMATION (INCLUDING INVESTMENT OBJECTIVE, POLICIES, RISK FACTORS, FEES, TAX IMPLICATION AND RELEVANT
QUALIFICATIONS), AND ONLY IN THOSE JURISDICTIONS WHERE PERMITTED BY LAW. IN THE CASE OF ANY INCONSISTENCY BETWEEN THE
DESCRIPTIONS OR TERMS IN THIS DOCUMENT AND THE OM, THE OM SHALL CONTROL. THESE SECURITIES SHALL NOT BE OFFERED OR SOLD IN ANY
JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL UNTIL THE REQUIREMENT OF THE LAWS OF SUCH
JURISDICTION HAVE BEEN SATISFIED. THIS DOCUMENT IS NOT INTENDED FOR PUBLIC USE OR DISTRIBUTION. WHILE ALL THE INFORMATION
PREPARED IN THIS DOCUMENT IS BELIEVED TO BE ACCURATE, FORMULA GROWTH LIMITED MAKES NO EXPRESS WARANTY AS TO THE
COMPLETENESS OR ACCURACY, NOR CAN IT ACCEPT RESPONSABILITY FOR ERRORS APPEARING IN THE DOCUMENT.
AN INVESTMENT IN A FORMULA GROWTH LIMITED FUND IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF RISK. OPPORTUNITIES FOR
WITHDRAWAL OR REDEMPTION AND TRANSFERABILITY OF INTERESTS ARE RESTRICTED SO INVESTORS MAY NOT HAVE ACCESS TO CAPITAL WHEN
IT IS NEEDED. THERE IS NO SECONDARY MARKET FOR THE INTERESTS AND NONE IS EXPECTED TO DEVELOP. THE PORTFOLIO, WHICH IS UNDER
THE SOLE TRADING AUTHORITY OF FORMULA GROWTH LIMITED, IS PRIMARILY CONCENTRATED IN LONG SHORT EQUITY STRATEGY AND THE
LACK OF DIVERSIFICATION MAY RESULT IN HIGH RISK. LEVERAGE MAY BE EMPLOYED IN THE PORTFOLIO WHICH CAN MAKE INVESTMENT
PERFORMANCE VOLATILE. AN INVESTOR SHOULD NOT MAKE AN INVESTMENT UNLESS IT IS PREPARED TO LOSE ALL OR A SUBSTANTIAL PORTION
OF ITS INVESTMENT. THE FEES AND EXPENSES CHARGED WITH THIS INVESTMENT MAY BE HIGHER THAN THE FEES AND EXPENSES OF OTHER
INVESTMENT ALTERNATIVES AND MAY OFFSET PROFITS.
THERE IS NO GUARENTEE THAT THE INVESTMENT OBJECTIVE WILL BE ACHIEVED. MOREOVER, THE PAST PERFORMANCE OF THE INVESTMENT
TEAM SHOULD NOT BE CONSTRUED AS AN INDICATOR OF FUTURE PERFORMANCE. ANY PROJECTIONS, MARKET OUTLOOKS OR ESTIMATES IN THIS
DOCUMENT ARE FORWARD-LOOKING STATEMENTS AND ARE BASED UPON CERTAIN ASSUMPTIONS. OTHER EVENTS WHICH WERE NOT TAKEN INTO
ACCOUNT MAY OCCUR AND MAY SIGNIFICANTLY AFFECT THE RETURNS OF PERFORMANCE OF THE FUND. ANY PROJECTIONS, OUTLOOKS OR
ASSUMPTIONS SHOULD NOT BE CONSTRUED TO BE INDICATIVE OF THE ACTUAL EVENTS WHICH WILL OCCUR.
ALL FIGURES ARE ESTIMATES AND SUBJECT TO CHANGE WITHOUT NOTICE. PERFORMANCE RETURNS ARE ESTIMATED PENDING THE YEAR-END
AUDIT AND ARE SUBJECT TO REVISION. ACTUAL RETURNS MAY DIFFER FROM THE RETURNS PRESENTED BASED UPON, AMONG OTHER FACTORS,
TIME OF INVESTMENT. THE CHARACTERISTICS OF THE BENCHMARK INDICES MAY BE MATERIALLY DIFFERENT FROM THAT OF THE FUND, AND
THUS, LITTLE CORRELATION MAY EXIST BETWEEN THE FUNDS RETURN AND THOSE OF SUCH INDICES. THERE ARE ONLY DISCLOSED TO ALLOW FOR
COMPARISON OF THE FUND’S PERFORMANCE TO THAT OF WIDELY RECOGNISED INDICES.
THIS DOCUMENT IS CONFIDENTIAL AND INTENDED ONLY FOR THE ADDRESSEE. THIS DOCUMENT MAY NOT BE PUBLISHED OR DISTRIBUTED
WITHOUT THE EXPRESS WRITTEN CONSENT OF FORMULA GROWTH LIMITED.
34
Contact Information
CONFIDENTIAL – NOT FOR DISTRIBUTION
1010, Sherbrooke Street W. Suite 2300
Montreal, Quebec H3A 2R7
Canada
28 West 44th Street, Suite 1516
New York, NY 10036
USA
27/F, Two Exchange Square
Hong Kong
Mathieu Boisvert
514.904.2887