Methanex Corp (MX.TO)

A global leading producer of methanol. Methanol prices tend to track crude oil very closely. Demand in China has been weak. She is avoiding the whole commodity complex, until there is more stable pricing across the whole industry.

Has been weak of late, with a lot of other commodity stocks. People are concerned about China where methanol demand had been strong. Expects there will be further weakness in methanol prices. If he owned, he would Hold, but wouldn’t be buying it.

Just came out with earnings and were a little light, but it didn’t really matter in terms of the stock price. It is a commodity name, so it is going to have volatility associated with it. This is a pure play methanol global provider. Has incredible infrastructure. Right now methanol is being produced “at cost”, so it is tough to make margin. Any margin that can be made though will accrue to this company. Not a bad name to own.

The largest producer of methanol, which is used in a lot of chemical building blocks. The slowing economic growth is not positive for commodities. Methanol is also used as a fuel substitute and it tends to be priced off of crude. They are a low cost producer. Natural gas is an input cost for methanol, which works to their advantage. She is not interested in getting exposure in the commodities space.

(Top Pick Jul 14/14, Up 0.47%) He thought methanol would be in big demand. He still thinks it would be a good stock to hold. It has been choppy because it made a lot of money when gas prices came down and people were convinced US production would go up. It is still a cash flow machine. It is a price taker and dependant on the price of methanol. They can affect the supply half of the equation.

This falls into the general industrials group. A producer of methanol and have done quite well over the last several years. He is somewhat progressive towards this although he doesn’t own any chemical companies. The changes in commodity prices have affected the stocks recently. This was a company that was benefiting from low energy prices, but margins are coming down a little, so he would be a little cautious on this.

Their feedstock costs are lower than most. Have locked in a lot of long-term feedstock costs, so have been a little bit immune to some of the moves within the market generally. This has done well over the past number of years, but he finds the single commodity companies somewhat volatile. They are supply/demand determined in a more volatile way.

A cash flow machine. It just keeps making money and spinning cash flow and treating its shareholders fairly well. The rap against them has being that it has always been a one product company. They control enough of methanol that they have a significant impact. Methanol is used in a lot of industrial chemicals as well as a fuel additive in some countries. He is quite bullish on the company as the American economy grinds slowly forward.

He has trouble with single commodity companies. There is ample global supply. There is not much cost cutting for them to do.

Has had a tremendous run. He sold his holdings. This is not a well controlled supply. He doesn’t know what is going to happen with this move in oil and the input costs. There seems to be a lot of new potential sources of supply at these prices.

If you are in a decent market and have stocks that are not participating, then perhaps you should move on. They are running into operational troubles so you should move on and look at something else. The stock looks broken.

This has suffered from the perception that anything to do with petrochemicals is poison. The stock has taken a major nosedive and thinks it has been way oversold. Methanol is made out of natural gas, which is very inexpensive right now. While the price of methanol has come down, so has the price of input. Feels it is a very good entry point at this level.

Its main input cost, natural gas, has been drifting lower. Also, methanol prices have been firming up. Has had a nice move up. Valuation at these levels is pretty firm, so wouldn’t be chasing it, but if you own, you could hold it for a little bit more. Very volatile.

He is a patient investor with this stock. Started buying at $7-$8 a share and has only Sold it to trim. He is a big believer in methanol and feels that over time it is going to go into more cars, especially in Asian countries. Feels the possibility of it coming back into North America, where it has been outlawed, as an additive for gasoline. Methanol prices recently have stumbled, but global economies are going to need more methanol. Periodically goes down 5% and you want to get in on those days.

We had a huge break out at the end of 2012 and what we had was the leg up after that. It had a correction and now seems to be starting another up leg. Make sure it does not go below $65.