Sherritt International Corp. (S.TO)

(Market Call Minute.) Nickel, coal and cobalt. Buy this one under $4.

Likes this. Trading at a ridiculous discount to what it’s worth. Part of this might be because it is located in Cuba. Brought on a restructuring expert to see what they could do to increase value. Well diversified and trading at a reduced valuation. Could see a 5 handle on this one in the next 6 months.

Bonds 11/15/2018 (Top Pick Jun 28/12, Up 10%) Thinks this is all about trying to unlock value and Madagascar is almost done. Now he is an S-T equity owner.

Are we somewhere near the bottom on basic commodities? Not sure where the bottom is on commodities. This has been a pretty well managed company for a long time. They have a certain advantage because of their Cuban operations and now bringing the Madagascar operations on line. Doesn’t follow this company really closely but finds it very intriguing the way they operate. Debt levels put him off a little bit.

It is a chronic underperformer. Certainly he would sell the position, maybe on a bounce. There are other great investments to put your money in. Dividend is safe for at least a little while. There is something wrong with their balance sheet.

Risks associated with assets in Cuba. Won’t go up until commodities go up. 80% more volatile than TSX.

(Top Pick Jun 22/12, Up 23.18%)

(Market Call Minute.) You get paid to wait on this one. 3% yield. Could spin out the nickel side and create some value

Diversified industrial company including fertilizers, coal power, and currently have a big nickel project ramping up in Madagascar. Feels that people are waiting to see how that is going to turn out and what the costs are going to be. Nickel prices, along with a lot of the base metal prices, have not been going the right way.

One of his largest material holdings and he is very positive on it. Has a big project in Madagascar and management has stated that the project is on track. Unfortunately, nickel prices have been extremely weak. Doesn’t expect this will continue forever and this company is a lower cost producer so ultimately they will come out the other side and be in a good situation.

This has been a dog for 20 years. Why do you look at this one. We are going to be in a bull market in the US and there are 2000 other companies. Why, why, why do people focus on crap? There is 65% upside to his model price, but this is a chronic under performer.

Highly dependent on the price of nickel. As the price of nickel improves and their new mine starts to work out its kinks, it could be very interesting.

Just sold his Sherritt bonds because they may restructure the company in a way that is not good for the bonds but is good for the stock. The stock itself with almost 4% yield should give him 10% return.

8% bond due Nov/18? This is a high yield (junk) bond and has suffered from the Cuba situation over its lifetime. Major underwriters in Canada avoid this company for that reason. He has no problem with this company.

Thinks their Madagascar mine is close to running. Certainly not running at full capacity yet. Took on a lot of debt to get that nickel mine up and running. This company has always traded at a fairly low valuation multiple to its cash flow and some of that is because it is a bit of a hodgepodge. They have oil and gas assets, coal assets, nickel assets as well as its exposure to Cuba. Can be tricky for investors to figure out. At this point, their leveraged balance sheet is somewhat of a concern.