Opinions
Hap (Robert) Sneddon FCSI
Shawcor Ltd. (A)
SCL-T
COMMENT
Apr 30, 2015
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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Chart shows a little bit higher lows, which is really positive. However, there is a downtrend from September, and it looks like it has broken up through that. Because of this, we could be looking for a decent pattern in the $39-$40 area. Indicators are acting positively. The MACD is starting to come above zero which gives you a bit more trust in the other things that you see. This is one that you are going to have to either buy it lower or buy it on a breakout to a new high, as opposed to in between price action for the last year or two.