Labrador Iron Ore Royalty (LIF.TO)

It is somewhat directly related to steel and tariffs. It has broken out and is making higher highs and higher lows. If it does not break the high of last January then he would be worried.

A sleepy, very good company owning royalty interest on an iron mine. A good cash-flow producer though it's a cyclical company in a cyclical industry. Offers a sustainable dividend. Hold it, but for new buyers, don't buy until it breaks below $20.

He thinks this should be part of the pro-growth complex, which he is presently bullish on. The recent pullback is back to good support and the long term trend is still positive technically, he thinks. If it falls below $20 this theme may be in trouble. Yield 4.4%.

You have to ignore the noise. It is one of his largest holdings. Price momentum is one of the best. They have repeatedly surprised the street on how much cash they generated and then paid out in dividends including special dividends. 28% ROE and 11 times earnings. The balance sheet is fine.

Typically, the stock does very well when there is greater demand for iron ore, and typically does well when steel stocks are doing well. This has recently broken its key resistance and has a longer-term upward trend. The technicals are certainly positive.

This used to be a really good company but it completely dropped off from his radar because it really had some tough times. Has bounced back quite nicely. Return on capital went from almost 0% to now 8% in trailing Q4 which is a great sign. Dividend yields 3.6% and payout ratio seems very reasonable. Hardly has any debt. All in all, for a company he hasn’t looked at for quite a while, it’s one worth taking a deeper look at.

This has been a great holding. Canada is unique in that we have a bunch of companies built in a structure to pay investors a regular cash flow stream, but at the same time tied to the global economy. This company gets a royalty stream on every pound of iron ore produced by Rio Tinto.

Not a bad looking chart. It had a breakdown in 2014, and since then has had a rounded bottom. There is a pretty defined neckline as well. Somewhere in this range, it is starting to break out. A little early, and looks a little tepid, but if the $20 level can stay supported, it might be a very bullish looking chart.

It had a decent rise on Chinese demand. You are about where you were about 10 years ago. If US infrastructure picks up then shipment will be cheaper to the US than China.

This basically gets royalties from Iron Ore of Canada. It has benefited recently by rising iron ore prices led by demand for steel. A fine thing to own right now.

This trades on the price of iron ore which has had a decent move in the last year, but has now kind of rolled over again. Pays a good dividend, and the dividend is sustainable.

He likes this. They own a portion of a Labrador mine, and get the royalties. An extra dividend was paid out to the company recently. Iron ore prices really took off last year, trading at about $80 a ton to over $300 at one time. We are now back down to $250-$220. In the last 2-3 months, the Chinese have been shutting down a lot of their steel mills because of smog problems. This will come back. Thinks you will continue to see cash flow coming out of this mine. Dividend yield of 5.4%.

There is something called “Belt Road Initiative”, where China is basically building out infrastructure for Eurasia, and spending $1 trillion a year. At the same time, they are cutting out capacity in coal and iron ore. They supplemented that with exporting iron ore and coal from North Korea, and the United Nations Security Council told them they couldn’t do that, because North Korea was using the money to fund their nuclear program and not feed the people. Now management teams of iron ore companies globally are saying they are no longer fighting for market share, they are fighting for margins, and are cutting out all high cost iron ore. This company has a wonderful yield. Mr. Trump is adding fuel to the fire by building infrastructure in the US. Very constructive on iron ore, met coal and steel for 2017. Dividend yield of about 5.2%.

He has a model price of $26.12, a 40% upside. This will not only be good from the US perspective, but more importantly with what is going on in China. This closed at $18.63, he would wait for it to reach $19.06.