KeyStone Financial Independent Equity Advisors

Where’s the Beef?

The S&P/TSX- Venture

TSX-Venture Exchange Since Inception

Current/Long-Term Themes Knowledge-Based Businesses Basis Manufacturing & Service Businesses: Boyd Group (BYD.UN:TSX) Buy: $2.30, Current $45.76 K-Bro Linen Inc. (KBL:TSX) Buy: $8.10, Current $48.02 Select Energy Special Situations But where is the best place to find these little gems...

Espial Group Inc. (ESP:TSX) Price: $2.50  Sector: Technology – Software - Espial is a leading developer and marketer of TV Browser and TV Everywhere software solutions to consumer electronics manufacturers and telecommunications service providers.

Espial Group Inc. (ESP:TSX) Price: $2.50  Sector: Technology – Software - Espial is a leading developer and marketer of TV Browser and TV Everywhere software solutions to consumer electronics manufacturers and telecommunications service providers.  Investment Highlights: Great Balance Sheet ($15.8 million or $0.57 per share in cash), No Debt, Best-in-Class Solution, Growth Via Potential Acquisition, New Client Wins and Relatively Attractive Valuations. 9-Month 2014 Financial Results  Revenues rose 71% to $14.75 million from $8.65 million over the first 9-months of the previous year.  Net earnings jumped to $1.34 million or $0.06 from a loss of ($5.68 million) in the same period of the prior year.

Espial Group Inc. (ESP:TSX) Valuations/Fundamentals  2015e EPS: $0.12 – PE (minus cash) is  2016e EPS Estimate: $0.30 – PE minus cash) is 6.6. Growth  Additional Tier 1 Cable/Telco Contracts.  To date signed 2 major deals, in discussions with 25 of top 60 global operators, 1 current POC and negotiating with approximately 8 more.

ESP:TSX Chart

Sandvine Corporation (SVC:TSX) Price: $3.10  Sector: Technology – Software & Hardware - The company’s solutions provide the tools to help service providers better understand their networks and apply specific network policies that will improve the quality of service for their subscribers, support the creation of new revenue-generating services, mitigate malicious traffic and/or more efficiently manage network traffic.  Investment Highlights: Great Balance Sheet US$151.1 million or C$1.16 per per share in cash), No Debt, Best-in- Class Solution, Growth Via New Product Launch, and Attractive Valuations Financial Results  Revenues rose 15.8% to $123.4 million from $106.5 million in  Net earnings jumped 78% to $23.0 million or $0.16 from $10.1 million or $0.09 per share in 2013.

Sandvine Corporation (SVC:TSX) Valuations/Fundamentals  2014 EPS: $0.15 – PE (minus cash) is  2015e EPS Estimate: $0.16 – PE minus cash) is 11. Growth  Acquisitions: Warchest of US$151.1 in cash and growing.  New Product Launches.

SVC:TSX Chart

Merus Labs International Inc. (MSL:TSX) Price: $1.75  Sector: Specialty Pharmacuetical - Merus Labs is a specialty pharmaceutical company focused on acquiring established products. The company leverages its expertise in European and North American markets to optimize the value of underdeveloped pharmaceutical assets. The company currently has products in the area of urology/women’s health, anticoagulants and anti-infectives.  Investment Highlights: Growth Via Recent Product Acquisition, Growth Via Further Potential Acquisition, New Solid Management and Attractive Valuations Relative to Peers.

MSL:TSX Chart

High Arctic Energy Services Inc (HWO:TSX) Price: $3.70  Sector: Oil & Gas Services - Based in Alberta, provides oilfield equipment and services for drilling, completion and work over operations. High Arctic has operations throughout Western Canada and in Papua New Guinea.  Investment Highlights: Great Balance Sheet, Growth in Papua New Guinea, Potential Dividend Grower (low payout ratio), and Very Attractive Valuations. Q Financial Results  Revenues rose 14% to $41.30 million from $36.6 million in Q  Operating earnings were up slightly to $9.8 million or $0.18 per share from $9.7 million in Q

High Arctic Energy Services Inc (HWO:TSX) Valuations/Fundamentals  2014 EPS Estimate: $ PE is 8.1.  2015 EPS Estimate: $ PE is 7.2.  Trailing price-to-cash flow of under 5 (peers above 10).  Annual dividend yield is in the range of 5% - low payout ratio of approx. 21% of funds from operations, expect to be a dividend grower. Growth  Papa New Guinea: $19 billion LNG plant came online mid-late 2014 lead by exclusive service partner Oil Search (OSL) – need feedstock – HWO perfectly positioned to service this demand long-term.  Recent Purchase of 2 new rigs each under new 2-year US$30 million annual contracts.

HWO:TSX Chart

Cash Rich, Profitable U.S. Small-Cap – released next week. ?

Focussed Diversification Your Small-Cap Growth Stock Fund  8-12 Stocks (ex. $100,000 split equally between 10 companies: $10,000 each)  Try to select stocks from a variety of sectors: technology, manufacturing, biotech, oil & gas, healthcare, financials, retail, etc.  Be patient and build your Small-Cap Stock Fund overtime: 1-2 years.  Actionable advice on 3-4 Small-Cap Stocks – make sure you complete the process.

Thank-you ladies and gentlemen.

The S&P/TSX Composite Index