Opinions Peter Hodson
WesternOne IncWEQ.TOSELLJun 01, 2015
Peter HodsonStock price when the opinion was issued
As of Dec 13, 2018. Market Open.
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(A Top Pick March 31/14. Down 82.07%.) This was a very, very difficult name for him to deal with. He had recommended this at $7.10, and it went all the way up to $8.60, and got stopped out at $8.70. He took another position at around $4.30 and got stopped out not too long after. Stop losses did a wonderful job for him on this. He feels that 95% of his clients over 7 years, made very good money on this. What really hinges here is the BC Hydro dam Site C project, which is going to be awarding contracts. This could be a big move for them.
Has a Short on this. Has had a massive decline. Covered about two thirds of his Short, and is expecting a possible bounce. Roughly half their business is driven by energy services in camps, etc, and thinks those businesses will continue to decline. Quite a bit of debt on the balance sheet.
James HodginsWas stopped out pretty much at $7.80, but has a small portion that was not filled. Was completely surprised by the collapse in this. It had been on its way to $9-$10 and is now down to around $2.70. A gut wrenching drop. There has to be a dividend cut coming on this. There will be a lot of tax loss selling on this so the stock could drop further.
The name has been a little bit quiet in the last couple of months. This is still a compelling yield play, north of 7%, which is very sustainable. Massive spending in the West is still forecast and this will be in the epicentre of that. It is a very small nimble company that is under the radar that not many people are aware of. The real catalyst is the new CEO, Peter Blake, who will be installed Sept 1st.
Well positioned to take advantage of all the spending on the infrastructure side of the business, plus taking advantage of the LNG build out. Horizons North (HNL-T) might be a little safer but have less upside potential.
Rob Stabile
Doesn’t think people are aware of the underlying business. Has had a tough 2 year period where it hasn’t gone very far. Great yield of 8% which continues to be sustainable. If you like the energy resurgence that is occurring, this is a name that you certainly want to be picking up here.
A former income trust and built on that model where they acquire smaller energy services, infrastructure types, and pay out most of the income in a distribution. Ran into some trouble with an acquisition they made in Australia and it hasn’t panned out very well for them. He is Short this because he has seen a downturn in their earnings momentum and there is some debt on the balance sheet. The dividend is not at risk right now, but he thinks it could be if there is more deterioration.
James HodginsOil field services and infrastructure. Every once in a while there is an opportunity to buy a great company name that is going through some difficulty. Has never missed a dividend payment. Their latest difficulty has been their Britco acquisition in Australia. Britco is a modular mobile housing for setting up permanent and transient housing. Also, had a lot of debt. Just rolled over one of their 8.5% convertible debts. Payout ratio is 60%. Yield of 8.45%. Really cheap name.
Doesn’t know this one really well but thinks the issue is the amount of money they make and their dividend (8.357%) are getting fairly closely matched. This always makes people nervous. Most people don’t want more than a 70% payout ratio, they want a cushion. If the dividend gets cut, the stock will go down 20%-30%.
It is a highly leveraged company in oil services. He does not like what the company did with saying the dividend would not be cut and then cutting it. The sector does not look good. He does not see a reason to hold it.