Opinions
Christine Poole
Shawcor Ltd. (A)
SCL-T
HOLD
Aug 16, 2017
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 global leader in pipe coating. They recently reported, and management seems optimistic that drilling activity has troughed. It is rising in North America, and this company is seeing the benefits of that. A lot of their larger projects in 2015 and 2016 were being put on the back burner and delayed. But now they are being asked to bid a lot more larger projects. If you are a long-term investor, you could start picking at this here.