Jean-François Tardif, president and portfolio manager at Timelo Investment Management Inc. in Toronto. Illustration by Joel KimmelThe Globe and Mail
Money manager Jean-François Tardif is betting on stock market volatility to continue in the months ahead, including the risk of a severe economic downturn amid slowing growth, rising debt and the war in the Middle East.
“Bottom line: I expect a recession probably between now and 2027,” says Mr. Tardif, president and portfolio manager at Timelo Investment Management Inc. in Toronto.
“As a result, I have a lot of puts,” adds Mr. Tardif, referring to contracts sold in the options market to speculate that a stock’s price will fall. He says the puts are generally on market indexes such as the S&P 500.
Nevertheless, he’s bullish on stocks in sectors such as gold, energy, health care and some consumer names.
Mr. Tardif oversees about $600-million in assets across two long-and-short funds: Timelo Strategic Opportunities Fund, for qualified investors, and JFT Strategies Fund, which he oversees for CI Global Asset Management.
His investment strategy focuses on fundamentals such as free cash flow, valuations and insider buying and selling. He says the long-short strategy aims to counterbalance market risks while providing stable returns with lower volatility.
JFT Strategies Fund, Series F, was up 15.3 per cent over the past year as of March 31. Its three- and five-year annualized returns were 6.1 per cent and 6.4 per cent, respectively. Its 10-year annualized return was 8 per cent.
Timelo Strategic Opportunities Fund returned 15.8 per cent over the past year as of March 31. Its three- and five-year annualized returns were 6.1 per cent and 6.4 per cent, while its 10-year annualized return was 8.2 per cent.
The performance for both funds is based on total returns, net of fees.
The Globe spoke with Mr. Tardif recently about what he’s been buying and selling.
Name three top picks in your portfolio right now.
Radisson Mining Resources Inc. RDS-X, a Quebec-based junior gold mining company, is a stock I first bought in 2021 and added to in the first quarter of this year. The company has had a high drilling success rate of more than 80 per cent.
It’s growing its resources to either build or sell the company. It also owns property near other mining companies with milling facilities, including Iamgold Corp. IMG-T and Agnico Eagle Mines Ltd. AEM-T, [which could make it an attractive takeover target]. There’s no guarantee [of a takeover], but it makes a lot of sense.
Radisson also has a strong management team with success in building mines. The company has enough capital to drill for the next year and a half.
Profound Medical Corp. PRN-T, the Mississauga-based commercial-stage medical device company, is a stock I’ve held for about seven years. I bought more shares when the company raised more money in December last year.
The company has a U.S. FDA-approved system [known as Tulsa-Pro], to treat prostate disease. The stock has been disappointing lately, but I believe the company is seeing progress. Profound’s system could become the new standard of care for prostate treatment. If that becomes a reality, there’s a good chance it could take a very big market share.
Pet Valu Holdings Ltd. PET-T, the Markham, Ont.-based pet food and accessory retailer, is a stock I loaded up on in early March. The stock got crushed after its latest quarterly earnings report showed flat same-store sales growth.
The stock is trading around its 2021 IPO price, even though the company has been growing. It’s a cheap stock and a very stable business. The company generates lots of free cash flow. When same-store sales growth returns, the multiple will revert to its former level. I’m being patient. The long-term potential is attractive.
Name a stock you sold recently.
Major Drilling Group International Inc. MDI-T, the Moncton-based provider of drilling services to the mining sector, is a stock I bought in stages about a year ago at an average cost of $13.50 a share. We sold it in March for around $17.
I sold it because the company’s recent results were a bit disappointing. I also own a different drilling stock, Foraco International SA FAR-T, which I prefer at this time.
I was also looking for ways to reduce my exposure to the mining sector. If the stock pulled back, I would be interested in buying back because the next few years will be really good for drillers, as mining industry budgets are expected to increase.
This interview has been edited and condensed.