Stella-Jones Inc. (SJ.TO)

Telephone poles and railway ties. A stock you could buy and forget about for 5-10 years. Great operators and managers. Have had some organic growth, but have also been active in acquiring other companies. Very strong ROE and growth rate. In their recent quarterly results, they cautioned on their forward guidance, which provided a bit of weakness in the share price. That is a buying opportunity.

Railway ties and transmission tower ties. Have done a really good job of building out the business. He likes this. It is always pricey, but that is what you have to Buy when thinking of this name.

Industrial oriented companies tend to do well from October all the way through to May. Chart shows a long channel of range bound trading, and this is just kind of bumping up against the 200 day moving average. Momentum indicators are trending lower, and are showing signs of a negative divergence. He wouldn’t be interested in this until it defines its direction.

(Market Call Minute.) Hydro poles are rotting away. This has a good, long term outlook.

Their main business is selling rail ties. Stock corrected slightly, partly because rail volumes have been declining both in the US and Canada. Canadian Pacific (CP-T) just commented that Q2 was probably the low quarter in terms of volume, and that it will improve. Also CNR (CNR-T) stated they would take the opportunity to replace more rail ties while there is less traffic. Feels this is a great buy.

They meet his criteria. Railway ties and telephone poles have a lifespan and a lot of it is up for replacement. They have been acquiring companies. They are one of his larger positions.

Getting some attention right now because Canadian Pacific (CP-T) had some weak results and people are wondering if there is going to be demand. On railroad ties, there is always a minimum demand. This is a company he likes, and they are a long-term value creator for shareholders.

(Top Pick Jun 30/15, Up 18.51%) Railway ties and hydro poles. His best ever win. He has held it for so long, he can't imagine selling it.

Railway ties. A well-run business. He would be a bit cautious on the valuation. It is not a cheap stock.

Telephone poles and railway ties. The trend is still favourable, but from a seasonal perspective, this stock tends to follow the trend of the cyclical sector, materials, industrials, etc. From about October to April is the seasonal strength. Technically, it is currently bumping up against resistance. There is potential for it to break out, but wait before getting in.

One of his favourite companies. They are starting to become dominant in the railway tie and telephone company market. They are building their market share, but it is still a fragmented industry and there is lots of acquisition power that they could do in North America. Companies are starting to spend again. A little expensive.

Makes utility poles and railroad ties. A very, very good business. Excellent management team. They have a rinse and repeat model where they will make an acquisition, deliver synergies, and know how to generate high returns on incremental invested capital on the business. A very recession resistant business.

(Market Call Minute.) This company has a lock on a pretty stable business of utility poles replacement. Very low volatility stock and the valuation is not bad.

Loves management. They do wooden poles for Hydro and ties for railroads. They commented that there was a big replacement cycle at the end of the war, and we are getting to a stage where there are going to have to be replacements, and are starting to get some major orders. There were some fears that because of the lower earnings in the US by the rails, that CapX may be slowed down. Canadian National (CNR-T) said they were expediting the replacement of their ties because of slower volume when it is easier to do it. Whether that happens in the US or not, she doesn’t know. If you have a 3-year time horizon, this is a buy.

Railway ties and telephone poles. He has been trimming a bit, because there is a mood in the market that very high priced stocks should be sold down.