Opinions Kevin Hall BComm, CFA
Great Lakes Carbon Income FundGLC.UN.TOBUYFeb 17, 2006
They sell Calpine Petroleum coke for the manufacture of aluminum. Likes the outlook for the fundamentals. They have US$ exposure through their cash flow and have a hedge in place that takes them to March 2006.
$10.76
Stock price when the opinion was issued
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BUY
World's largest producer of calcined petroleum coke. Managed to earn a comfortable margin in 2005. In 2006, the volumes are off a little bit but they also have very strong commodity prices. Have a currency hedge in place for a couple of more years.
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BUY
A US based trust. They provide a key ingredient in the aluminum smelting process. There had been concern that some of Alcoa workers would go on strike. At these levels, it offers reasonable valuation.
Michael Simpson, CFAOwned
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WEAK BUY
Almost all of their revenue is in US$. Operations are running fine. They are the predominant producer of calcine carbon which is used in aluminum refineries. Doesn't have a problem with this except for their currency.
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HOLD
The world's largest producer of calcine petroleum coke. The pricing for their commodity is quite strong because of the limited supply. Have generated good margins. The good news is built into the stock now.
James LeungOwned
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BUY
Has been a little bit beat up because it's a US company in the Canadian market. Lost one of their smaller customers. Outlook for this company is excellent.
Michele RobitailleOwned
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BUY
Went through a rough patch in 2004 because of the high freight rates giving a margin squeeze. Had to dip into their subordination. Have quite an attractive subordination with AIP. Have been able to negotiate very strong sales price realization through most of their major customers. Demand/supply looks very strong.
Michele RobitailleOwned
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BUY ON WEAKNESS
Produce calcined coke for the aluminum business. Had a little spike at the beginning of the year. Last year they struggled a bit with freight costs and they seem to be getting those under control. They're going to be passing on some price increases. Sees 2005/2006 to be better years with about 95% payout ratio.
Robert LauzonOwned
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HOLD
Supplies calcined coke to the aluminum industry. Aluminum industry is favourable. Expects price increases in '05 and will be able to push those through to Alcoa and Alcan.
Robert LauzonOwned
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