Rogers Sugar Inc (RSI.TO)

We need to see a little more price action and see if the base starts to build again. It’s too early to tell if a base is going to build.

Nat Gas is one of their major costs. This company has not been a favourite of his. MX-T in contrast can pass on more of their cost increase in gas to customers. RSI has fierce competition off-shore. Not a great area long term.

Owns a little bit of this. Numbers last quarter were not good. This is supposed to be a boring company that immunizes its expenses, which is mostly natural gas which is creeping up. They also lost a big customer. Feels the distribution is safe for now. Has very good cash flow, but the competitive nature has really changed over the last couple of years.

Had a whiz-bang of a year in 2012 and then the last 4-5 quarters have been atrocious. In the past 2 years, they have been able to export sugar outside North America and that has been great for them. This business has no pricing power and has no growth and is dependent on GDP growth. Feels the dividend is safe for this year. Have a look at their 5.7% convertible bond which gives you almost as much yield as the stock, but with a little more safety.

Last quarter was quite rough. They didn’t meet estimates and their guidance wasn’t that great. A couple of brokers downgraded the stock to “underperform” and even an outright Sell. Cash flow is still there. Paid a $0.39 special dividend last year, so for them to kind of change fortunes that fast, feels the stock reaction was a little bit too much. Cyclical business. Thinks long-term it is okay but waiting for the volume to pick up is probably the best strategy.

Sugar is in a period of seasonal strength right now. Runs from November through to February, basically the times of your key holidays such as Halloween, Christmas, Valentine’s Day and Easter. Not seeing too much strength in this. Pushing up against the declining trend line, but, you want to see it break out above the trend line in order to get excited. Wait for it to break out and then pursue it.

It is trying to base. He would only buy it if it broke out.

Had a lousy end to this year. Although sugar prices were strong, they just weren’t able to ship the volume and there is a price war. They did pay out a special dividend this year of $0.36.

Chart looks terrible. The 20 day and 50 day are rolling over. Lower highs and lower lows. Not too much good to say about the stock right now other than that we are in a period of seasonal strength for sugar during the holiday season, which runs all the way from October into February 14, Valentine’s Day. Wait for this to bottom.

Double down once again? He doesn’t know the financials. It is a very cyclical company. You get a great payout. He never doubles down within 6 months after he buys a company. He will only average down once.

This is one of those classic former up-trenders that most definitely broke down. There was support at about $5.80 but broke definitively and started a new downtrend. There seems to be support at above $5.11 from 2011-2012, which would actually be a current target, but you have to make sure it bounces off that. Don’t catch a falling knife, let it land and let it bounce.

There was a larger uptrend, but chart shows what could be considered a double top, where there were 2 similar highs. The uptrend was broken and the stock broke down through a neckline. It is now in a new downtrend. 1^st support level might be old resistance at around $5.50. If it doesn’t hold that, it could go quite a bit lower. Wouldn’t be a buyer yet.

Doesn’t see a lot of growth outlook or dividend increases for this stock. When looking at income paying stocks, she wants to see improving cash flow potential for increasing dividends or distribution over the next 3-5 years.

Likes the business. Not a fast grower but feels it can grow 1%-2% a year in revenues and looks for cost improvements. Recently had a lousy quarter. Last year they benefited from the ability to export sugar to the US and Mexico. Paid out an extra dividend of $0.30 this year. Dividend is safe. This is an income only stock. 6.1% dividend yield.

Chart indicates that this stock may be forming, on a very large basis, a double top. Never assume that a formation is taking place until it is broken. This has not happened here but is in danger of that.