Canadian energy equities have been going through a correction since mid-December 2015. The iShares S&P/TSX Capped Energy (TSX: XEG) has been down approximately 12% since December 15, 2016. We therefore see an opportunity in high quality intermediate E&P’s.
On November 11, 2016 Savaria Corporation (TSX: SIS) announced that the Bourassa family was selling 1.75 million shares at $11.34 per share via a secondary offering. Unfortunately, the market was not pleased with the announcement that the founders were selling 12% of their position. The lead on the offering was not able to place the whole deal. This created an overhang on the stock and caused it to trade below the deal price for the remaining of 2016 and early 2017. However, we heard from the bank that the overhang was finally sold on January 11, 2017. Weekly_Commentary_170112