Opinions
Christine Poole
Shawcor Ltd. (A)
SCL-T
PAST TOP PICK
Sep 10, 2013
Stock price when the opinion was issued
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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.
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(A Top Pick September 5/12. Up 25.06%.) Still likes. There is a lot of opportunity and have a good backlog as pipelines get built. They are not just North American, but are overseas, including deep water stuff, which requires much more technology where they are leaders. In North America, there are a lot of old pipelines, so that refurbishment and safety standards will also benefit this company. Her target range is close to $50 so this would be a good entry point.