Firm History

Founded by Robert Evans in December 1988, Evans Investment Counsel Limited (EIC) is a registered investment counselling firm providing portfolio management services to individuals, corporations, estates, trusts and endowments. Assets managed include Canadian, U.S., and international stocks and bonds.

Investment Philosophy

EIC aims to provide clients with objective professional investment management. The firm invests clients’ money with the joint goals of wealth preservation and growth after tax and inflation. With the client’s investment objectives and risk tolerance in mind, a portfolio of common stocks and fixed income instruments is developed. The common stock portfolio will have 25 – 50 undervalued companies, while the fixed income portfolio will have approximately 20 bonds or preferred shares; a balanced portfolio will have an asset mix that falls somewhere between the two.Stocks are purchased when it is believed they are inefficiently priced compared to the market as a whole. To discover these inefficiencies, the firm uses an earnings growth model, applying data that best fit based on a number of factors relating to the company under consideration such as:

•  industry structure
•  management
•  market power
•  products
•  future products, etc.

EIC uses extensive research to uncover stocks with a present value higher than the current price, then narrows them down further using direct comparisons between companies to eliminate the least valuable.  The firm buys both traditional value and growth stocks.EIC favours companies:

•  in which management has invested a large portion of their own wealth;

•  that are strong, but in industries currently out of favour;

•  where there is insider buying (all US and CDN insider buying is stringently monitored);

•  that can deliver high ROE (return on equity) numbers over a long period of time, as long as they are reasonably priced;

•  that are cyclical and out of favour because their earnings are poor, if a recovery over the next couple of years is on the horizon; and

•  with undervalued assets on their books, especially if there is potential for a scenario that will trigger the value.

Stocks are sold when they are no longer undervalued, although a portfolio manager would still hold a fairly valued stock if the sale triggered excessive tax. Although the greatest inefficiencies are found in small and mid-sized companies, these companies are more volatile so they are limited to less than 50% of a portfolio.

Reporting & Communication with Clients

Clients receive monthly statements from their custodian. EIC issues its own formal portfolio performance report quarterly, and will talk or meet with clients as frequently as needed.