Opinions
John Zechner
Shawcor Ltd. (A)
SCL-T
DON'T BUY
Dec 12, 2012
Stock price when the opinion was issued
You might be interested:
The Enbridge 3 pipeline will get built by early next year, but Keystone is a question mark. Shawcor coats pipelines, so they benefit from this construction. But Ottawa is anti-pipeline as are well-financed interest groups opposing pipelines. Wait and see how the pipeline chips fall in coming months.
At 8X forward earnings and with investors/analyst attention seeming to increase, we don't think much has to change here. As always, we would use prudent portfolio principles around trimming/re-balancing to limit a single company becoming too much of a portfolio but do not think it needs to be sold just because it is 'up'. While it is up nicely over the last year, it is still down 30% over a five year period. Past prices don't really mean much, but sometimes zooming out can help.
In terms of a recession, in general it is difficult for all/any companies to avoid impacts but MATR might be a bit less sensitive to an economic slowdown than say a consumer discretionary company.
Unlock Premium - Try 5i Free
Have always done well in the coating business and that is sort of expanding. Stock has done so much better than anything else in the group because of speculation it would be taken out. It may yet come about but he doesn’t really want to roll the dice on that one. Prefers others.