Methanex Corp (MX.TO)

The backdrop for this company is positive. Stock has run like crazy. Long-term, she feels it is still a good story, but short-term it has run a lot and there have been a whole bunch of analysts that have downgraded it. It went into the MSCI index, which created a lot of buying, which is now coming off. There is no real catalysts short term. Moving their methanol plants from South America to North America in order to gain security of energy, so this is long-term.

World’s largest methanol producer. Made a lot of money off this stock but has been selling into the recent strength. His Fair Value estimate is about $70-$75 so, when you’re getting that close to it in a cyclical stock, you might want to take a little off the table, especially after it has had such a good run.

Thinks the dividend is going to go up and that they will buy back stock. This is because cash flow growth is strong and the level of CapX will be diminished relative to the last few years so free cash flow will be very strong.

Likes it and continues to hold it. Good operating margin.

A single commodity company and it is a commodity that can easily go into excess supply. There is new production coming on in the Middle East and South America. Doesn’t see much upside. If you own, he would take profits on it now.

Base was built and away we go. He would look at when would he take some off the table. Things are a little bit extended. RSI is getting close to 80 and the recent move is probably a kind of blow off move.

We have taken out multi-year resistance. Some good things happening but when things go bad it can go really bad. You don’t what to see the stock coming back into the channel ($25ish).

Just announced that they had done a deal on their Louisiana plant with Chesapeake energy and the stock rose about 8% in a day so he took his money off the table. Yield had come down to about 2.1% so he replaced this with a stock that had a higher yield.

(Top Pick Jan 16/12, Up 22.73%) Methanol keeps going higher and tracks the price of oil. They are moving from Nat Gas in the plant in Chili to Coal in Louisiana.

Has had a very nice play off Natural Gas. It is a very cyclical stock in a pattern that is quite unique. Great global distribution network. He would wait until it falls to mid $20s and buy when people don’t want it. Being over sold is the beginning of the time to begin acquiring a position.

Thinks this will be lacking for at catalyst for the next few quarters or so. They are focused on moving some of their plants. They need to get inputs, which are either coal or natural gas to produce methanol and are having a lot of trouble securing low-cost natural gas. Very shareholder friendly company. He is hoping 2013 will be a better year for them.

The 200 day moving average is still rising so the trend is still upwards. This is at the bottom of an up channel and he would think it will at least have a run-up to the upper channel.

Methanol demand is weakening. Natural gas is an input cost, which is a plus. China has been a big consumer of methanol, which has helped but they are now expending their own methanol capacity.