Sherritt International Corp. (S.TO)

Have bad assets right now in terms of coal and nickel, which are not what people want. This company needs a catalyst.

(A Top Pick Nov 12/12. Down 20.87%.) Still, a recommendation and a Buy. Half of its assets are in Canada and most of that is thermal coal for the Alberta power plants. Cuba is a political risk and nickel has been dreadful. The Madagascar mine is on but waiting to get it 77% throughput to put it on the balance sheet. Balance sheet is BB rated. 4.7% dividend.

Not a company he would own. It has to do with where they are. There is no momentum in the commodities they are in.

Historically this normally has positive seasonal strength from around the middle of November right through until April of each year. What is driving it right now is the new nickel facility. If they get that going, it could be a big bonus for them. However, technically it is 1) in a downward trend, 2) underperforming the Canadian market and 3) trading below its 20 day moving average. Not a good situation right now.

A conglomerate of a bunch of businesses. Have assets in Cuba as well as in Africa. Had a 52-week low here and it starts to look reasonably attractive. You have to be a little cautious of the macro themes going on in the businesses there.

Thinks Teck Resources (TCK.B-T) assets are way more attractive. Has a new mine in Madagascar that is coming into production, and even that is causing issues because Madagascar is one of those poor countries with very few successful assets and operations. She worries that there will be attacks on it one way or another.

Got out of the stock when they got into Madagascar as he felt there was too much to be spent. It was a huge project in a potentially unstable political environment. The positive side was that they had some super partners. Still doesn’t think it is clear enough for him to step back in. He wants to see how they operate, and if the politics settles down.

This company is very frustrating to all investors and many of them have thrown in the towel. This is a “sum of the parts” story. Oil and gas, coal, nickel and copper. Madagascar should be going into commercial production in the 4^th quarter. He believes the NAV is $8. Dividend of over 4%.

He has been quite negative, given the exposure to nickel. Madagascar still has problems getting to the ramp up level. Nickel prices will be challenged because of the supply prices. There are lots of talks of breaking up the company. He would not go in until he is more confident it will happen.

When you look at the numbers, it looks like a very inexpensive stock. Selling at a fraction of Book Value, often a good time to buy a mining company. The main problem he has is that it is really dependent on the development of one mine in Madagascar, which is a sort of “make it or break it” mine. That makes it more speculative.

He is okay on where base metals are today. He owned the bonds and has just taken all of that off and bought the stock. Gives a 4% dividend. Nickel price is low and China is just around the corner, which might tighten up the nickel market. The Madagascar project is built, paid for and coming on. Good things can happen to this company from here. Doesn’t expect spectacular returns. The biggest single risk is big iron prices in China.

Very cheap. Trading at about 40% below BV. Nice 4.3% dividend while you wait. Madagascar operation is up and rolling. The one risk is their Cuban operations which have a lot of investors gun shy. Trading at 3.7X cash flow.

(A Top Pick August 23/12. 9%.) 8% bond due November 15/18. Doesn’t own this anymore but does own the stock. It’s all about their Madagascar mine that is going into production this year and next. Expect it’s a better play using the equity which trades at a discount to NAV. He could see a 25% upside in the stock.

It dropped below the lows of 2012 and 2011. Now that level will be resistance. Every time this stock stands up it gets whacked back down.

Doesn’t know this particularly well but it is not a good time to be investing in commodities. China is going to slow down. They are going to buy a lot less of the things that companies like this produce. He would steer clear of any commodity stocks.