Guardian Capital Group (GCG.A.TO)

Top Pick in August. One of the cheapest stocks out there, but not that liquid. Well managed business, dirt cheap. Fastest growing asset manager. Hold for the long term.

(Top Pick Nov 05/13, Up 22.23%) The shares they own in BMO-T are a big part of it (over $10 a share). Their own asset management business has been growing recently. They are gradually reducing their stake in BMO-T and using proceeds to reinvest back in their own business. He has a short in BMO to offset any risk in the BMO shares they own.

Has tremendous upside. A lot of value. One of the largest publicly traded money managers in Canada. Huge holding of BMO shares worth $16 and company trades just about $17.

Long Guardian Capital (GCG.A-T) and short Bank of Montréal (BMO-T). In 2001 they sold its mutual fund business to Bank of Montréal in exchange for 5 million shares. Have been sitting on the 5 million shares ever since. These holdings plus some of their other listed holdings, actually comes out to $14.25 at the end of the last quarter. Stock is trading at about $16.60-$16.70 and if you strip out the $14.25, the underlying business is trading at about 3X this year’s earnings, ridiculously cheap. There is also a scarcity of independent asset managers, so one day somebody is going to come and take out this company. He has had this trade on since April 2009.

Controlled by the family and becoming friendlier to shareholders. Have an 18 $Billion private asset management business and they own a large chunk of BMO-T but have not gone up in price with the stock. Added together they are worth $20 a share but it is trading about $15.

(Top Pick Sep 23/11, Down 2.63%) Part other consolidation theme and they should be consolidated some day. She finds it inexpensive. You are getting the asset management business at a big discount if you consider the cash and the BMO stock. She will be up more than 10% if or when it is taken out.