Opinions
Christine Hughes
Shawcor Ltd. (A)
SCL-T
COMMENT
Dec 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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Had its challenges with shareholder issues and did a good job with this. There is some Selling of the name right now but in terms of looking forward to the next year, she likes companies that are involved in the infrastructure build-out in the energy patch and thinks this one will do okay. Prefers things like Horizon North Logistics (HNL-T) where you have not just exposure to oil.