Rogers Sugar Inc (RSI.TO)

(A Top Pick Sep 25/17, Up 2%) It is a duopoly in Canada. They hedge themselves. When the new CEO came into to diversify them in to such things as maple syrup, the stock has not performed that well because they were behind with integration. This is a great integration point.

The problem is that it's the beneficiary of a tariff wall against American sugar. This is too scary if you rely on income for your portfolio. Buy Crombie REIT or Fortis or a telco, instead, because their dividends are more reliable and safer.

This is an interesting stock to consider in the face of current discussions of tariffs. The United States sugar industry is heavily protected, and Rogers is protected in Canada. It is one of two main producers, a duopoly behind a tariff wall. He has wondered how long that wall would stand. With Trump in power, he thinks this wall will stay up for longer, making this stock more attractive. However, sugar is a low-growth or no-growth commodity. The social trend is against it and the younger generation consumes less of it. The yield is high (about 6%) and will probably not come down, but it is strictly a yield play. (Analysts' price target is $6.25)

This is a new position he added this year because of the new CEO’s strategy to grow the business. He really likes the new strategy with Maple Sugar. He can see them growing into other forms of ingredients. If they can execute, which he thinks they will, this company could have some good upside if you hang on for the long run.

Seasonally, this is the time of year when people buy all kinds of sweets. The period of seasonal strength is from December through until the end of the year. The chart shows SGG-N has formed a nice little base pattern and has just broken above its trading range. There is a pretty good chance that the stock will move above its current trading range. If you own, continue holding and look for a break out in the next couple of weeks.

Besides sugar, this is now going into maple syrup. Thinks that is a smart move. The company has been a great spin off in terms of dividends. Has never bought this, but wishes he had. Maple sugar is not out of favour the way sugar is. He is not buying, because there is not enough upturn in the stock. They pay a really good dividend.

It is a pretty good income stock but only that. It has low growth and high debt ratio. Their quota is in Canada. It is a nice little income stock. Take the dividend but don’t expect a lot of growth.

The new CEO wants to implement a growth strategy. They just acquired a Maple Syrup products exporter, the biggest in the world. You should see a re-rating of the stock to a growth stock. (Analysts’ target: $7.00).

Had owned this for many years. Great operators. It is a duopoly business. The sugar market in Canada is protected, and once in a while they get to export some sugar. More artificial sweeteners are coming into the market, so Rogers has to be aware of that. The balance sheet is not great and the growth is not there. If you are starved for yield, this is not the worst idea in the world. 5.7% dividend yield.

He has never actually bought into it. You have the dividend (almost 5.7%), but he does not know if it is time to take some off the table. If markets have a blow off this is a good company to have and they will keep paying the dividend.

Has a good dividend but seems a little overpriced right now. The sugar market is very tricky. Relationship with Cuba, a big sugar manufacturer, is softening, and if they got back into the US market it would have a big impact. If you own, he would consider taking your profits.

Sold his holdings. This is really benefiting from being a good dividend play. Selling sugar is not exactly the best story in the world when there is so much talk about obesity, etc. However, they have a monopoly. If the stock pulled back materially, he would take another look at this. Dividend yield of 5.6%.

Has been a bit of a turnaround story. The industry was really competitive for a lot of years. They have put up a number of good quarters in a row, and has a pretty high dividend. This is more likely than not, to continue.

Stock has done well, and ranks well in his dividend model. Dividend yield of 6.2%, which may seem high, but in this case the coverage seems pretty good. Free cash flow is 3.5% and the PE is 16X against 26% trailing earnings growth, giving a .6 PEG. Sugar prices are at the highest level since 2012.

Seasonally sugar tends to be favourable in the summer. It has done quite well from February lows, almost doubling. Moving averages are still trending higher. RSI is above 70, which is very much overbought, so the risk is that you get a swift pullback. The trend is your friend, but you have to be careful.