Canwel Building Materials Ltd. (CWX.TO) Buy,…

Canwel Building Materials Ltd. (CWX.TO)

8.66

-0.08 (0.92%)

as of May 28, 2021, 8:00:00 pm Market Open.

42 watching

HOLD

Still thinks there's potential. Payout ratio is about 170% which cannot be sustained without a cut. Also had a one time charge of $2 million which would have left the payout ratio at 128% which is still too high. Have enough to sustain distributions for one or two quarters and hopefully improve their margins.

DON'T BUY

Has a yield of 21% with a very high payout ratio. The stock tumbled and will continue down with the uncertainty of income trusts. Wouldn't be his favourite.

DON'T BUY

Has had a pretty rough ride. Made an acquisition just before becoming a trust and is leery of this type of occurance. There is a significant part of their business levered to the forest prodiuct area. A name he would tend to stay away from.

TOP PICK

Pays 16%. Unit trust has come under some pressure after their last earnings release which had some special charges for conversion and an acquisition. They can also get caught on moving commodity prices. Feels there's a very good margin improvement story here. There is talk of a cut in distribution, but feels this is not the case.

DON'T BUY

Tries to make good assesments on all securities that they buy. Got bagged on this one. Disappointed in their cash flow. Trying to see management to look at issues.

TOP PICK

Have announced conversion to an income trust with a special $1.25 dividend. Going to rais some money and do a secondary issue. Liquidity is going to increase. Split 2 for 1 and pay $0.98 a share. All that combined puts a near term target price somewhere near the $22 range. Still opportunity to grow margins and to continue to consolidate.

PAST TOP PICK

(A past Top Pick Oct 4/04. Up 16%.) Still likes it. Cheap. Looking for $1 in earnings. Trading at just over 8 X. Just doing an acquisition which is very accretive.

TOP PICK

Underfollowed since its IPO about 6 months ago. Well run. Extremely cheap.

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Canwel Building Materials Ltd. (CWX.TO)