Russel Metals (RUS.TO)

The period of seasonal strength for materials stocks is from October through to May. We have seen a huge push this year as well. Seasonal weakness for these materials stocks tends to be in the summertime. He would be looking to take profits.

Likes this. Thinks they are going to benefit from increased drilling activity. Feels steel demand in North America is going to recover from the crop levels of 2013. Great balance sheet and will continue to benefit from good acquisitions. Estimates they can grow earnings by about 28% over the next couple of years. Likes the yield. Sees the payout ratio falling from 95% in 2013 to about 69% in 2014. Currently trading at a little bit of a premium to the group so try to buy on a bit of a pull back.

October to December is the best time for this one. We are at a support level right now.

Sold it too early. It is well managed, good dividend and there is room for increases in the dividend over time. He is uncomfortable buying here and would prefer $28.

Industrials are one of his favourite sectors. ZIN-T allows you to buy the basket or you can buy Russell and he would buy it. It’s better to acquire at the bottom end of a channel. Perhaps buy in thirds over a couple of weeks.

5.4% yield is the attraction on this one. Not exactly high growth. As industrials improve, the spreads as a steel business distributor, improves for them. Steel is still under some pressure, but they are more into the spreads on what you can buy versus what you can resell at. Have been able to maintain margins and payout a good chunk of their earnings. You could expect a 10% return, including the yield over the next year.

A core holding. He owns quite a bit. Metal services. As the economy continues to improve, this will do well. Likes the management. Likes the fundamentals. It is a good hold.

Steel processing company that pays a dividend. Have done extremely well. They have global customers. They are able to add value to the services they provide.

One of the good things about this company is that their cash flow is counter cyclical so when things go poorly, they draw down their inventory which creates cash flow and supports the dividend. Feels the dividend is safe. Worth looking at here with the little bit of increase in steel prices in the US. 5.6% dividend yield. $28 in the year would be possible.

Chart shows new support at old resistance levels. It does seem to be bouncing off the support. He would be reasonably optimistic on this, but watch the level of around $25. If it breaks that, it is definitely in danger. The only other point he would make is that the trend line that runs from mid-2011 was broken so he would be a little bit cautious. Has a reasonable chance to get back to the $27-$28 level.

5.61% dividend. Owned for a long time and met with CEO in last month. Likes the fact that dividend looks safe. Demand for steel is slowing, but long term he likes the name. It participates in economic growth.

Thinks they reported in the last couple of days and results were not what were expected. Dividend is quite high but is safe. Their end markets are relatively weak. There is no rush to buy this one right now until you see an improvement in the steel market.

Good stock to own. Dividend is quite safe. Have a 2013 estimated payout ratio of around 50% and the company has an 80% earnings payout policy so they may raise their dividend. Also, some potential capital appreciation due to margin expansion. Feels steel prices are going to firm a little bit. Just acquired Apex which will be very accretive for them. Have an energy tubular segment which is 25% of their business, which will be a solid beneficiary if Keystone goes through.

Dividend is sustainable. One of the best management groups in steel. Very good management team. Regrets that he has never bought. Thinks there is a new industrial cycle coming in. Earnings prospects look quite good. Prefers Magna.

An industrial that is closely related to the steel sector. Steel has a seasonal strength from around the end of January through until about the 2^nd week of May.