John Sinkins, CFA
IPSCO Inc
IPS-T
BUY
Apr 04, 2005
Steel stocks have been exceptionally strong in the last couple of years. There is a real mixed message in the sector with regards to China. Will they need steel or will they do their own production and exporting? Prefers Ipsco because they make steel for the oil/gas industry.
Has had a pretty good run since October. What’s moving the steel sector is the prospect that private equity might get involved with some of the cheap companies, or that they might buy each other.
It’s in the steel business which has its ups and downs and also their major end market is the oil services, where drilling has been cut back. A great company and has had a huge run.
Has gone up because of a rampant consolidation in the materials sector, specifically steel and metals. Big dividend yield. Have some really good businesses.
Takeover target by Sweden's SSAB who want to sell their tube unit. An interesting strategy. A well-run company. On valuation, you are at the top of the cycle for takeout prices. If you own, wait for the final bit.
Is in the process of being taken over. Doesn't expect any competing offers.It will stay at it's current level, subject to the difference in the Canadian US dollar.