Invesco Canada blog

Insights, commentary and investing expertise

Jason Whiting | May 22, 2014

The courage to invest differently pays off

In January, I shared my investment story about PNI Digital Media and, more specifically, how after two years of sticking to my thesis, the market was starting to come around to my original calculation of the company’s value.

At that point, PNI investors had been rewarded with a 108% gain in 2013. Despite its huge gain, I didn’t sell a single share in 2013.

Fast forward a few months and PNI has received a takeout offer from a major American retailer willing to pay a significant premium to market value.

That’s great news for investors in both  Trimark North American Endeavour Class and Trimark Canadian Small Companies Fund , because PNI accounted for 9.14% and 1.02% of those portfolios, respectively, as at March 31, 2014.

The average cost of my PNI holding is $0.84 per share and the estimated return is 102% in a little under three years. That’s a compound annual growth rate of 29%. It’s a great return, but how many investors these days have the patience to wait three years for an idea to work?

The keys to this successful outcome were research and conviction.


I wouldn’t have had this type of weight without doing a ton of work that led me to my strong beliefs. In fact, this was virtually all my own research. When I first bought shares, only four brokers covered PNI. When I was buying more between February and October 2013, not one broker covered the company.

It is Trimark’s research budget and the effort we put into understanding all our companies, which made investing in PNI possible. Smaller firms can’t do this. Firms that own hundreds of companies can’t do this. Only large firms with concentrated portfolios can undertake the necessary research.


My investment in PNI peaked at 17% of the shares outstanding, making me by far the largest shareholder in the company. That gave me tremendous access to management to assist in my research process. Just one example was last September when I spent seven hours at the company’s headquarters in Vancouver previewing their new software platform and discussing strategy.

PNI also illustrates the ability to play a more active role in the management of an investment, something few fund managers can or will do. For example, in 2013 PNI’s board shrank from eight to five members, with three of those five being new to the board, a process I was actively involved in.

In summary, PNI demonstrates a lot of things that make active management at Trimark so successful:

  • Research
  • Conviction
  • Concentration
  • Patience
  • Focus

Feel free to leave any comments or questions that you may have, and thank you for your continued support.

Learn more about the Trimark Investments team. 

Note: The company mentioned in the above article was selected for illustrative purposes only and are not intended to convey specific investment advice.

Trimark North American Endeavour Class, Series A provided the following performance returns as at April 30, 2014: 1-year, 44.11 %; 2-year, 24.05 %; 3-year, 7.99 %; 5-year, 13.95 %; 10-year, 4.04 %. On August 10th, 2007, the Fund’s investment objectives and strategies, and portfolio advisor were changed. The performance of this Fund for the period prior to this date would have been different had the current investment objectives and strategies, and portfolio advisor been in place during that period.

Trimark Canadian Small Companies Fund, Series A provided the following performance returns as at April 30, 2014: 1-year, 34.39%; 2-year, 19.22 %; 3-year, 14.00 %; 5-year, 20.37 %; 10-year, 9.23 %.

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