Michael Decter Tree Island Steel TSL-T COMMENT May 25, 2016

Technically this looks good. Has a nice support and is beginning to break out of something that it has had difficulty in breaking out through. Looks like it could get up through $4.

(Market Call Minute.) Doesn’t like it.

They will be a beneficiary of what is going to happen in the US. He thinks people used this stock as a source of cash. He sees improved housing starts in the US.

The largest product is nails so it is a play on the recovery in the US and in their housing market. He thinks we are early in that recovery. He likes the housing recovery story.

He might be a bit early with this. This is a former income trust. Commodity prices (steel) were hurting their margins: they couldn’t raise prices fast enough. They had a very good recent quarter. Talk now is optimistic. He likes turnarounds like this. It’s not very liquid. Don’t chase it. Put in a bid and let sellers come to it. This is a cyclical business, it was a $6 not long ago. (Analysts’ price target is 3.75$)

Battered by steel tariffs. Hold it if you still have it, because tariffs will get resolved.