| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | 11% |
McElvaine Value Fund returned 7.3% in the first half of 2026 and approximately 11% year-to-date, underperforming Canadian indices but improving through summer. The manager emphasizes balance sheet resilience across all holdings, with most companies carrying net cash or minimal debt—a defensive posture shaped by painful 2008 losses when leveraged businesses failed. Current positioning reflects the belief that defense resides in company fundamentals, not fund-level cash. Top holdings include PrairieSky Royalty (record production, debt reduction, shares up 50%), Exco Resources (aggressive Haynesville development, gas hedged to 2028), Fairfax Financial (93% combined ratio, aggressive buybacks), and Knight Therapeutics (revenue guidance raised twice, strong buybacks). The portfolio is concentrated in owner-managed businesses with insider alignment. With 22% cash following the Osler Fund merger and a fragile market environment, McElvaine maintains a patient, value-focused approach. He cannot predict timing but remains confident in the portfolio's setup, emphasizing that companies are better positioned than six months ago.
McElvaine Value Fund focuses on buying quality businesses at attractive prices with strong balance sheets, emphasizing resilience over thematic investing. The manager learned from 2008 that defense resides in company fundamentals—specifically cash and low debt—not fund-level positioning. Current holdings are positioned to withstand stress and potentially benefit from dislocations, with most companies carrying net cash or minimal leverage. The portfolio is concentrated in owner-managed or insider-controlled businesses across energy, insurance, pharmaceuticals, and materials, with 22% cash providing optionality.
McElvaine states that investee businesses hold more cash, carry less debt, and own better assets than six months ago, creating a setup he likes. He remains confident in the portfolio and the future but cannot predict when this positioning will be rewarded. The tone is patient and cautious, emphasizing resilience over near-term catalysts.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Aug 27 2026 | 2026 Q2 | AIM.TO, CFP.TO, CSU.TO, FFH.TO, GUD.TO, MXG.TO, PSK.TO, XCO | Balance Sheet, Canada, energy, insurance, Resilience, small caps, value | - | McElvaine Value Fund emphasizes balance sheet resilience over thematic investing, holding concentrated positions in owner-managed businesses with net cash or minimal debt. The portfolio is defensively positioned following 2008 lessons, with 22% cash and strong fundamentals across energy, insurance, and pharmaceuticals holdings. PrairieSky and Knight Therapeutics delivered strong operational results. The manager views the environment as fragile but remains confident in the portfolio's setup despite uncertain timing for value realization. |
| Aug 21 2025 | 2025 Q2 | AIM.TO, CFP.TO, FIH.TO, GUD.TO, HHH, J36.SI, M04.L, MXG.TO, ONEX.TO, PSK.TO, WINT, XCO | Canada, discount, energy, NAV, private equity, small cap, value |
PSK CN FIH CN HHH CFP CN ONEX CN AIM CN MPX CN GUD CN |
McElvaine maintains disciplined value approach amid AI market frenzy, holding 12 undervalued companies with strong balance sheets and insider alignment. Portfolio includes energy royalties, conglomerates, and specialty situations trading at significant NAV discounts. Despite first-half underperformance, manager expresses confidence in positioning and multiple catalysts for value realization across holdings. |
| Dec 31 2024 | 2024 Q4 | CFP.TO, ECO.TO, FFI.TO, GUD.TO, JMHLY, MDOHY, MXGP.TO, ONEX.TO, PSK.TO, SEG, WBD | Buybacks, Canada, Concentration, energy, royalties, value | - | McElvaine Value Fund returned 19.2% in 2024 through concentrated value investing in undervalued companies with strong balance sheets. Maxim Power and PrairieSky Royalty drove performance while mistakes like Warner Bros Discovery were eliminated. The fund maintains 13% cash and focuses on anti-fragile companies with aligned management rather than macro forecasting. |
| Aug 27 2024 | 2024 Q2 | CKHUY, FFH.TO, JMHLY, MDORF, MXG.TO, ONEX.TO, PSK.TO, SEG, XCO | Canada, contrarian, dividends, Natural Gas, royalties, small caps, value |
MXG.TO XCO MOIL.L ONEX.TO PSK.TO SEG |
McElvaine Value Fund's contrarian strategy targets orphans and misfits trading at deep discounts. Despite H1 underperformance, the manager maintains conviction in holdings like natural gas assets, luxury hotels, and holding companies bought at 50 cents on the dollar. Focus remains on patient value investing with aligned management partners. |
| Dec 31 2023 | 2023 Q4 | 0001.HK, BLCO, FIH.TO, J36.SI, MXG.TO, ONEX.TO, PSK.TO, WBD, XCO | Canada, Concentration, discount, Intrinsic Value, small caps, value | - | McElvaine Value Fund returned 3.0% in 2023, underperforming benchmarks but maintaining concentrated positions in undervalued companies. The fund's ABBA framework targets 50-cent dollars with strong management alignment. Current holdings trade at significant discounts to estimated intrinsic values, particularly in small caps where carrying values are well below fair value, positioning for future outperformance. |
| Aug 23 2023 | 2023 Q2 | 1.HK, BLCO, MXG.TO, ONEX.TO, PSK.TO, WBD | Canada, Cautious, Hedge, small cap, value | - | McElvaine Value Fund posted solid 5.1% first-half returns while maintaining concentrated positions in undervalued holdings. Key portfolio companies showed operational progress including Maxim Power's gas expansion and PrairieSky's strong royalty performance. Despite confidence in individual holdings, the manager established modest macro hedges in July, citing caution around current market valuation, liquidity and sentiment conditions. |
| Dec 31 2022 | 2022 Q4 | - | - | - | |
| Jun 30 2022 | 2022 Q2 | BLCO, MXG CN | - | - | |
| Dec 31 2021 | 2021 Q4 | 2728 HK, GUD CN, JEF, MXG CN, TOU CN | - | - | |
| Jun 30 2021 | 2021 Q2 | GUD CN, JEF, MXG CN, TOU CN | - | - | |
| Dec 31 2020 | 2020 Q4 | 1 HK, 2728 HK, JEF, MXG CN, TOU CN, WCP CN | - | - | |
| Jun 30 2020 | 2020 Q2 | GUD CN, JEF, MXG CN, TOU CN | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
ResilienceMcElvaine emphasizes balance sheet strength across all holdings, with most carrying net cash or minimal debt. The 2008 experience taught that defense resides in company fundamentals, not fund-level cash. Current portfolio is positioned to withstand stress, with companies holding cash internally to ride out difficult periods. |
Balance Sheet Cash Debt Defense |
Natural GasExco Resources is a core holding focused on Texas natural gas production with 95% proved reserves in gas. The company is executing an aggressive Haynesville development program while reducing debt to $87 million. Gas is hedged into 2028 at around $3.80 despite realized prices falling to $3.26 per Mcfe. |
Haynesville Hedging Production Reserves | |
InsuranceWintaai Holdings, a private insurance holding company, is expanding through acquisition of Topa Insurance Group, which would bring four insurers under one roof. Fairfax Financial, another major holding, ran insurance operations at a 93% combined ratio and repurchased significant shares while closing strategic transactions. |
Property & Casualty Combined Ratio Acquisitions Buybacks | |
Specialty PharmaKnight Therapeutics showed strong performance with revenue rising as the Paladin acquisition flowed into results. Gross margin improved and full-year revenue guidance was raised twice to $540-560 million. The company continued buying back shares in the low $6s while the stock trades near $10. |
Oncology Revenue Growth Buybacks Latin America | |
LumberCanfor, a Pattison-controlled softwood lumber producer, narrowed losses in Q2 as the lumber division returned to modest profit. The company permanently closed multiple mills across geographies and restructured operations. Impact of new tariffs remains uncertain though the majority of the business is unaffected. |
Softwood Restructuring Tariffs Pulp | |
OilPrairieSky Royalty delivered record royalty production while cutting net debt by $90 million to $187 million. The royalty model requires no capital expenditure, operating costs, or environmental liability. Shares rose roughly 50% to near all-time highs as the business improved and the discount narrowed. |
Royalties Fee Simple Western Canada Debt Reduction | |
| 2025 Q2 |
ValueManager emphasizes sticking with the 'dregs of value' approach, focusing on cheap reasonably financed companies with aligned owner/operators. All holdings are trading at significant discounts to NAV with strong balance sheets and insider ownership. |
Discount NAV Undervalued Cheap ABBA |
EnergyPortfolio includes significant exposure to energy through PrairieSky Royalties (oil and gas royalties), Exco Resources (natural gas exploration), and Maxim Power (power generation). These positions benefit from energy market dynamics and cash generation. |
Oil Gas Royalties Power Energy | |
Private EquityHoldings include Onex Corporation (private equity firm) and AIMIA (permanent capital company). These provide exposure to alternative investment strategies and capital allocation expertise. |
Private Equity Capital Allocation Alternative Investments | |
| 2024 Q4 |
ValueThe fund focuses on finding 50 cent dollars by investing in companies selling below intrinsic value. The manager emphasizes creating a margin of safety when Homer Simpson-like market pricing creates opportunities versus Mr. Spock-like intrinsic value determinations. The approach centers on bargain hunting rather than macro forecasting. |
Intrinsic Value Margin of Safety Bargains Undervalued Discount |
EnergySignificant exposure through PrairieSky Royalty (oil royalties with 18 million acres), Maxim Power (power generation with strong balance sheet), and Exco Resources (controlled by Fairfax Financial with skilled management). The manager values companies with strong balance sheets and staying power in volatile commodity environments. |
Oil Natural Gas Power Generation Royalties Commodities | |
ResilienceThe manager seeks anti-fragile companies that can exit crises stronger than they entered, similar to Shane Parrish's concept of positioning with cash and low debt providing good options. Portfolio companies are selected for their ability to withstand volatility and maintain competitive advantages through cycles. |
Anti-fragile Balance Sheet Staying Power Crisis Defensive | |
BuybacksMultiple holdings actively repurchasing shares including ONEX (retired 8% in 2024, 30% over 5 years) and Knight Therapeutics (retired over 1/3 of shares in 5 years at attractive prices). The manager views disciplined capital allocation and share repurchases as value-creating activities. |
Share Repurchases Capital Allocation Shareholder Returns Value Creation | |
| 2024 Q2 |
ValueManager focuses on buying discounted assets at 50 cents on the dollar, particularly holding companies trading below net asset value. Portfolio consists of orphans and misfits bought when others were selling, with emphasis on finding cheap stocks with aligned owners. |
Discount NAV Contrarian Undervalued Orphans |
Natural GasPortfolio includes natural gas exposure through Maxim Power's 300 MW gas-fired power plant and Exco Resources as a natural gas producer. Exco serves as a natural hedge to the Maxim position, with Fairfax carrying it at US$20 versus market price of US$7.76. |
Power Generation Energy Hedge Alberta Production | |
DividendsPrairieSky Royalty currently pays an annualized dividend of $1, representing a strong yield on the manager's cost basis of $7.95 per share. The royalty structure provides income with zero capital requirements as a tollgate on Western Canadian oil and gas production. |
Royalties Yield Income Tollgate Cash Flow | |
| 2023 Q4 |
ValueManager focuses on finding 50 cent dollars through his ABBA framework, seeking companies selling below intrinsic value. Emphasizes that intrinsic value is a range supported on the downside and open-ended on the upside, preferring straightforward estimates over complex models. Current holdings are viewed as trading at significant discounts to estimated 3-5 year intrinsic values. |
Discount Intrinsic Value Bargains NAV Undervalued |
Small CapsFund classified as Small/Mid Cap Equity Fund with 39% allocation to small cap companies. Manager defines secondary companies as those with market value below CAD $1bn at initial purchase. Small cap holdings include Maxim Power (19% position), American Coastal Insurance, and Exco Resources among others. |
Secondary Issues Small Companies Neglect Concentration | |
CanadaSignificant exposure to Canadian companies including PrairieSky Royalty (10% position), ONEX Corporation (6%), and Maxim Power (19%). Manager notes portfolio differs from Canadian indices due to limited holdings, cash levels, and international investments. Canadian small/mid cap index used as benchmark comparison. |
TSX Canadian Domestic Local | |
| 2023 Q2 |
EnergyThe fund holds Maxim Power which is commissioning a Combined Cycle Gas Turbine expansion expected to be operational by late fall. PrairieSky had strong performance with oil royalty production and leasing activity hitting multi-year highs. |
Natural Gas Oil Energy Infrastructure Royalties |
MediaWarner Bros Discovery showed improvement from better-than-expected streaming service results. Summer performance was mixed with movie successes like Barbie offset by ongoing Writer & Actors strikes affecting operations. |
Streaming Entertainment Content |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Aug 21, 2025 | Fund Letters | Tim McElvaine | PSK CN | PrairieSky Royalty Ltd. | Energy | Oil & Gas Exploration & Production | Bull | Toronto Stock Exchange | cashflow, dividends, land, Optionality, royalties | Login |
| Aug 21, 2025 | Fund Letters | Tim McElvaine | FIH CN | Fairfax India Holdings Corp. | Financials | Asset Management & Custody Banks | Bull | Toronto Stock Exchange | Airport, growth, India, infrastructure, NAV | Login |
| Aug 21, 2025 | Fund Letters | Tim McElvaine | HHH | Howard Hughes Holdings Inc. | Real Estate | Real Estate Development | Bull | New York Stock Exchange | Catalyst, development, land, NAV, realestate | Login |
| Aug 21, 2025 | Fund Letters | Tim McElvaine | CFP CN | Canfor Corp. | Materials | Forest Products | Bull | Toronto Stock Exchange | Cyclical, Lumber, Replacement, restructuring, tariffs | Login |
| Aug 21, 2025 | Fund Letters | Tim McElvaine | ONEX CN | Onex Corp. | Financials | Asset Management & Custody Banks | Bull | Toronto Stock Exchange | buybacks, Governance, Liquidity, NAV, Privateequity | Login |
| Aug 21, 2025 | Fund Letters | Tim McElvaine | AIM CN | Aimia Inc. | Financials | Diversified Financial Services | Bull | Toronto Stock Exchange | Activism, Catalyst, Governance, Holdco, NAV | Login |
| Aug 21, 2025 | Fund Letters | Tim McElvaine | MPX CN | Maxim Power Corp. | Utilities | Independent Power Producers & Energy Traders | Bull | Toronto Stock Exchange | cash, infrastructure, M&A, Optionality, Power | Login |
| Aug 21, 2025 | Fund Letters | Tim McElvaine | GUD CN | Knight Therapeutics Inc. | Health Care | Pharmaceuticals | Bull | Toronto Stock Exchange | acquisition, cashflow, growth, LatAm, pharma | Login |
| Aug 27, 2024 | Fund Letters | McElvaine Value Fund | MXG.TO | Maxim Power Corp | Utilities | Independent Power and Renewable Electricity Producers | Bull | TSX | Alberta, Free Cash Flow, natural gas, Power generation, utilities, Value | Login |
| Aug 27, 2024 | Fund Letters | McElvaine Value Fund | XCO | Exco Resources Inc | Energy | Oil, Gas & Consumable Fuels | Bull | NYSE | energy, Fairfax Financial, Hedge, natural gas, Reserves, Value | Login |
| Aug 27, 2024 | Fund Letters | McElvaine Value Fund | MOIL.L | Mandarin Oriental International Limited | Consumer Discretionary | Hotels, Restaurants & Leisure | Bull | LSE | asset-light, development pipeline, hospitality, Jardine Matheson, Luxury hotels, Sum-of-parts | Login |
| Aug 27, 2024 | Fund Letters | McElvaine Value Fund | ONEX.TO | Onex Corporation | Financials | Capital Markets | Bull | TSX | Capital markets, discount to NAV, insider alignment, private equity, Share Buybacks | Login |
| Aug 27, 2024 | Fund Letters | McElvaine Value Fund | PSK.TO | PrairieSky Royalty Ltd | Energy | Oil, Gas & Consumable Fuels | Bull | TSX | contrarian, dividend yield, energy, oil and gas, Royalty, Western Canada | Login |
| Aug 27, 2024 | Fund Letters | McElvaine Value Fund | SEG | Seaport Entertainment Group Inc | Real Estate | Real Estate Management & Development | Bull | NASDAQ | Bill Ackman, entertainment, Las Vegas, NYC, Real Estate, Rights Offering, spinoff | Login |
| TICKER | COMMENTARY |
|---|---|
| PSK.TO | Owns fee simple mineral title across a large area of Western Canada and collects a royalty when third parties drill on its land. No capital expenditure, no operating costs, no environmental liability. Record royalty production and net debt cut by about $90 million to $187 million. Buyback authority renewed in June; dividend held at $0.265 a quarter. Shares up roughly 50% and near an all-time high, so the business improved while the discount narrowed. |
| XCO | Texas natural gas producer; proved reserves roughly 95% natural gas by volume. Fairfax Financial owns about 49%. Cash from operations for the half improved to $205 million resulting in debt falling to $87 million. Undergoing aggressive Haynesville development program. Realised prices fell 10% to $3.26 per Mcfe, and gas is hedged into 2028 at around $3.80. |
| FFH.TO | Property and casualty insurance and investment holding company run by Prem Watsa, with insurance operations worldwide and a large investment portfolio. Book value per share rose during first half. Insurance operations ran at a 93% combined ratio in the second quarter. Repurchased over a million shares for $1.7 billion in the half, about 4.6% of the company. Closed the sale of its Poseidon stake for roughly $1.9 billion and took Kennedy Wilson private. |
| CFP.TO | Softwood lumber producer with mills in British Columbia, Alberta, the US South and Sweden, plus a pulp business. One of the largest lumber producers in the world. Jimmy Pattison owns just over half the shares. Loss narrowed in Q2 as the lumber division returned to modest profit. Permanently closed a sawmill in Alberta, two in Sweden and the Northwood pulp mill in BC; bought in the pulp subsidiary minority and acquired an engineered wood business. Impact of the new tariffs is uncertain although the majority of the business is unaffected. |
| AIM.TO | Holding company which Rhys Summerton took mgmt. control of in 2025. Owns Cortland (high-performance synthetic ropes for industrial/marine/defence use) and a minority stake in Clear Media, a Chinese outdoor advertising. Carries over C$1 billion of tax losses. Sold Bozzetto, its Italian specialty chemicals business, in May for net proceeds of about C$268 million which was partially used to most of its 9.75% notes, leaving AIMIA with net cash of some $170mn as of early July. Buying back shares steadily. Share price has not moved. |
| MXG.TO | Independent power producer. Core asset is a 300 MW combined-cycle gas-fired plant in Alberta, selling into the Alberta pool. Developing the permitted 400 MW Prairie Lights project near Grande Prairie. Alberta pool prices collapsed however mgmt ran the plant opportunistically. Spending cash on developing the Prairie Lights project (including securing a 2030 turbine slot). Several other irons in the fire. Patience is required. |
| GUD.TO | Specialty pharmaceutical company. Acquires, in-licenses and distributes drugs across Canada and Latin America, focused on oncology, infectious disease, neurology and immunology: markets where a small number of specialists write most prescriptions. Revenue rose as the Paladin acquisition flowed fully into results. Gross margin improved and full-year revenue guidance raised twice, now $540–560 million. Continued buying back shares in the low $6s; the stock now trades near $10. |
| CSU.TO | Unsecured subordinated floating-rate debenture maturing March 31, 2040. The coupon resets every March 31 to the annual change in Canadian CPI plus 6.5%. Coupon reset on March 31 from 8.9% to 8.6%, reflecting Canadian inflation of about 2.1%. Credit quality unchanged and interest paid quarterly. The debentures now trade at a premium to face value. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
|---|---|---|---|---|---|---|
| No Recent Sells Data | ||||||
| Industry | Prev Quarter % | Current Quarter % | Change |
|---|---|---|---|
| No industry data available | |||
