Opinions Kevin Hall BComm, CFA
KCP Income FundKCP.UN.TOBUYFeb 17, 2006
Has had a bit of a troubled past, similar to others in the consumer staples sector. This has been the exception by diversifying into the product manufacturing business and making acquisitions. Margins are being increased.
$10.85
Stock price when the opinion was issued
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BUY
Had some problems, but with healthcare issues and reduced raw material input costs, he thinks problems can be fixed. Management is looking to cut costs. Payout ratio of about 95%. Has a bit higher debt level then he likes. Cheap.
Michael Simpson, CFAOwned
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COMMENT
Have an extraordinary amount of currency exposure and stand to benefit from the weakening Cdn$. Had a pretty substantial price move over the last month. Have put them selves up for sale, but would be surprised if it sold for more than its current price. Expect it will weaken.
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BUY
A very good manufacturer of no name products and custom manufacturer for large corporations. He tends to buy during dips like this.
Sandy McIntyreOwned
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BUY
Good management team. Would stand up through a recession.
Robert LauzonOwned
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TOP PICK
Bleach manufacturer. Once Clorox hedges come off they will be able to raise their prices. Recently diversified into the consumer health sector by becoming a contract manufacturer for Johnson & Johnson (JNJ-N), Pfizer (PFE-N), etc. Distribution of 10.6%.
James LeungOwned
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BUY
Has managed to fight through its higher costs. Has expanded into contract manufacturing. Had a great 1st quarter and would buy it under $10.
Robert LauzonOwned
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BUY
Good selection in the business trust sector. Traditionally been in the private-label bleaching manufacture and cleaning products. Consumer staples has really come under pressure as rising input costs have squeezed margins. They are one of the few that have been able to diversify out of that. US exposure is hedged into 2008.
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BUY
Originally they were in the private label bleach but have expanded to other consumer products as well as health/beauty care. Sees more growth on the pharmaceutical and healthcare side. Management has done a good job.
Michael Simpson, CFAOwned
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PAST TOP PICK
KCP Income Fund is up 7%. They continue to like it. Their fourth quarter was quite strong. It is a name they think will continue to perform well.
Michele RobitailleOwned
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