General Portfolio Comments and Recent Portfolio Company Updates

Over the course of the next week I will be shaking up my portfolio to limit my positions to no more than a maximum of four companies (inclusive of a new company I have been buying up this week). There are so many great companies that I "want" to own, but only a handful that I feel I "must" own that can drive significant shareholder returns. I am no longer interested in holding positions that will represent under 15% of my portfolio. In other words, I will not own a company if I am not committed to making it at least 15% of my portfolio. I put a lot of time into learning my investments in a way that I feel confident that I know them better than most, and structuring my portfolio in a way that reflects that by being highly concentrated is important to me. As Buffett said best, "diversification may preserve wealth, but concentration builds wealth."

A few quick portfolio company updates:

  • Big news from Jernigan Capital  (JCAP) yesterday in which they secured a massive equity financing commitment of up to $125M. The company feels that the money that they will be able to put to work as a result of this can increase book value by $8-10/share by YE 2019. If that actually occurs, book value by YE 2019 will be $26.50 to $29/share. Here is an FAQ that the company also published on the deal.
    • There is a small note in the FAQ that stock issuance will likely occur in the future to fund additional growth, but at a much higher share price (hopefully).
    • If you recall, I have been extremely positive on JCAP despite the market not willing to give their business model any credit. I was aggressively buying stock near $10/share several months ago, and Q1 2016 results really provided a shot in the arm to the company and investors started to realize their business model is a viable one. This announcement further validates their business model and should remove a lot of lingering doubt from the marketplace about the viability of the business model. 
    • JCAP isn't going to provide multi-bagger results from here, but it will provide upside potential of perhaps 100%, in addition to a very generous quarterly dividend. The company also has a stock repurchase program in place of up to $5M in common stock purchases. 
       
  • I expect Kraken Sonar (PNG.V) to close their current private placement next week. I am told the raise has gone very well, so I am looking forward to learning about the total amount of equity the company was able to raise. As announced earlier this week, I have more than doubled my position in Kraken.
     
  • Ackroo's (AKR.V) Q2 2016 results should be out before the end of this week. While I do not expect the company to show profitability or positive cash flow yet, I do expect to see that they are getting closer. In addition, I am anxious to see how much organic growth the company was able to achieve over the same period in 2015. Read about my recent visit with Ackroo by clicking here. Ackroo represents roughly 50% of my overall portfolio, so obviously I am highly optimistic about the company being able to capitalize on the many opportunities ahead of them for several years to come. 
     
  • ProMIS Neurosciences's (PMN.TO) Private Placement should be closing next week as well. Again, I hear the demand for the PP has been quite strong, and with the share price being above the PP price since being announced, it has probably only helped to drive investors into the PP. Very exciting times for ProMIS, and hopefully their presentations at AAIC this week are turning some heads. 

I look forward to sharing my portfolio update and my comments regarding Ackroo's Q2 2016 results with everyone over the weekend.