Chemtrade Logistics Income Fund (CHE.UN.TO)

Provides necessary chemicals for fertilizer and other chemical businesses. Recently made a big acquisition. He owns some of their convertible bonds and he has to decide whether to convert this into stocks or not.

Recently made an acquisition and issued shares to help fund it, which he participated in. The acquisition is going to be 10% accretive to cash flow. On an EBITDA basis, the company still represents some pretty decent value. Trading at about 7.5X payout ratio below 70% indicating they could potentially increase the dividend if they are able to realize some synergies on the just completed deal.

Today’s acquisition will probably flatten the stock. It won’t go any further for a while until it is demonstrated how good the acquisition is.

(A Top Pick Nov 15/12. Up 14.95%.) Still likes. Reported a couple of days ago. Announced they were looking at making a sizable acquisition, which would require an equity issuance. A good example of a place to get +6% yield with a relatively low payout ratio and a fairly well diversified business.

(Market Call Minute.) A chemical company that did a great acquisition a couple of years ago. Did fine through the recession. For income primarily it’s fine. Don’t expect lots but the income will be good.

(A Top Pick June 13/13. Up 0.89%.) A high dividend, low volatility that has traded sideways, which is exactly what he wanted it to do over the summer.

(Top Pick April 12/12. Up 24.57%.)

This is like an income trust. Makes things like sulphuric acid, waste management cleaning chemicals, etc. About 75% of their cash flow is absolutely predictable. When this market sold off recently, this one hardly moved. 7% yield.

Upside is about $17.50. Well diversified company. Focuses on sulphur-based products, sulphuric acid that has many different end-market applications. Chemical company but 50% of revenues are “take or pay” contracts where they have some visibility with respect to price and a lot of the risk is mitigated. Payout ratio is below 65%. A likelihood of a dividend increase sometime down the road but management, at this point, is more focused on growth through acquisitions.

(Top Pick Dec 2/11, Up 20.40%) Dividends are very good. Traded in a tight range. Will continue to hold it. 7.5% yield.

(Top Pick Dec 2/11, Up 12.16%) Will continue being happy with it as long as it can stay in the $16 range plus or minus half because of the dividend. Stop is $15.50

Company that gives a high yield of 7.5% and offers a relatively high upside. Thinks they will grow further through acquisitions. 65% payout ratio so potential dividend increases. The downside risk is lower than expected global growth. A lot of revenue is tied to very long term contracts.

(Top Pick Nov 2/11, Up 28.78%) Reports next week and he is not looking for anything special.

Well run. Not a cheap but has a pretty good yield of 7% or so. Produces chemicals that are used in the energy business. Doesn’t want to own producers but likes the people that provide them with things that they need.

Over a long, long term it has had a very nice uptrend. Currently having a heck of a time breaking that $17 ceiling. Likes the very long-term picture as well as the 7% dividend. There is probably not going to be a lot of capital appreciation on the stock but in the meantime you make 7%. Eventually it will breakout because of the trend line.