Russel Metals (RUS.TO)

Benefiting from the shift to hard assets as well as the infrastructure buildout in Canada. Really positive chart, though extended. He'd prefer to wait for weakness.

Decent dividend. Valuation's pretty attractive. Likes that it's been around a long time and has seen multiple recessions. Cut dividend 20 years ago and never forgave themselves because of how the stock reacted. Doesn't take on a lot of material risk, just a refabricator and turns over inventory quickly. Steel prices may go up and down, but as long as they manage their inventory then they don't have a lot of capital at risk. 

Quiet, very well run company that falls under the radar. Economically sensitive, but cashflow and balance sheet are improving. Tariff uncertainty still a cloud. Build Canada program will help. Able to make acquisitions. Yield is over 4%.

Overall chart is decent, and the space has become more interesting. Pay attention to the last little bit on the chart -- it's another example of a trading range, and possible it could get to ~$35. Buy half today. If it gets to the $35 range, and holds, then you can buy your second part. If it breaks above $47, then you can buy your other half.

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Massively expanded footprint in US, so tariffs don't affect them as much. Benefits from infrastructure builds, both in Canada and US. Need material inputs to build all these data centres, energy infrastructure, and so on. Fantastic management. Amazing capital allocation. Very solid balance sheet, buying back stock. Margins went up last quarter, so he hopes they can sustain (or even improve) those. Yield is 4.18%.

His fundamental analyst on this name rates it "outperform" and doesn't see 50% tariff ramifications as huge. Higher highs, higher lows. Since tariff tantrum, has really started to pick up and try to push higher. Likes the setup. If he's right about the rally into August, should retest recent highs around $46. So another potential 10% upside. 

Canada's showing leadership, commodities moving higher, big infrastructure push. This name should participate in the broad expansion we're seeing in Canada. Yield is 4.05%.

It is in the metal fabrication business. They just raised their dividend this year and have dramatically changed their balance sheet for the better, so it is in much better shape than in past cycles. They also have a U.S. operation and have done a great job managing their working capital. Tariffs could hurt them a bit.

It is well positioned for an increase in demand for infrastructure spending. In answer to the caller's question, don't switch it for an energy stock.

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. It is very cheap. The balance sheet has improved and the company is in the value stock segment. The company is in a cyclical industry. It is at 4.8x earnings, which is quite good value. Unlock Premium - Try 5i Free

(A Top Pick Aug 28/20, Up 94%) The stock market is discounting a lot of the recover happening. Has moved to CCL Industries now. It starts to get harder to hold in a cyclical business when it's runup this much.