Westshore Terminals Inc. (WTE.TO)

The largest coal handling facility in North America. This was recently in the news when the former BC Premier announced that she might not allow coal shipments from the US. A very quality, large infrastructure asset. If this keeps getting beaten up by the market, there might be an opportunity. Dividend yield of 2.9%.

Return on Capital went from 13% in 2015 down to 8% in the 1^st quarter. In the long run, it had some good returns through the years, but is clearly in a downturn right now. The valuation doesn’t look that great.

Thinks of this as extremely steady. The business will improve for the next couple of years. It is basically shipping coal from Alberta/British Columbia to China. The coal business is picking up again. You don’t own this for capital gains, you own it for the highly, highly certain dividend. It will do well for the next couple of years.

(Top Pick Apr 6/16, Up 60%) He bought it when the world was coming to an end for met coal. That has all changed now and the business looks a whole lot better. It has a good return on equity with a reasonably good price momentum but he finds there is better place to fund better valuation.

Probably reasonably priced. If looking for income, you could probably move on to some of the other areas where you have very safe dividends. Dividend yield of 2.5%.

This has gone lockstep with Tech Resources (TCK.B-T) this year. Demand for coal has gone up with the steel production side of things. Probably a good one to own for distribution.

A great infrastructure play operating on the west coast of Canada. Demand from Asia has dropped off but is picking up. There are take or pay contracts on coal with a number of companies. Hold it even though coal is being phased out because there are still countries that are using it.

A coal terminal, but they care more about volumes than the price of coal. A top holding for him on valuation and improving price momentums. They bottomed shortly after they cut their dividend at the end of last year. Since then they have had quite a run, but he doesn’t think the run is over. ROE is still really strong at 30%. Trading at 5X EBITDA, and 8X PE. Dividend yield of 3.7%.

People had thought this was fairly well protected even though they were a hub for coal, as a lot of the contracts were “take or pay”, but unfortunately a lot of the companies with those contracts have been forced to come back to the table to renegotiate. What had been thought of as stable underpinnings has proven to be not entirely there in some cases. Trading at about 10X with a yield of close to 5%. He would be looking for a lot healthier environment for coal than what we are currently seeing.

Coal shipments have not been great, as well as having the world turning against coal. This has come down substantially because of that. Not a particularly attractive long-term investment. He holds a little and is looking forward to selling it on any kind of a rally.

This has not done well, because it ships coal. Due to slowing demand from China, they are not shipping as much, and some of its customers are in financial difficulty. This is a wonderful asset and is an asset that is going to last forever. It has inflation protection. But right now we are at the bottom and things can get lower and worse. If you believe China or India are going to pick up the slack, then you want to be in the resources.

Looking at the valuation, this is cheap. They ship coal which is not a great area to be in. The big problem is their Tech Resources (TCK.B-T) contract with which they have to renegotiate, but doesn’t think Tech is just going to roll over and take the same pricing. There might be some pricing pressure which could reduce the dividend. At this point, there is a huge risk. Not too much to be had over the next 6-12 months. Risk is way too high.

More of a toll booth; they just push the stock through. Have cut their dividend twice. The issue is that they have a contract with Tech Resources (TCK.B-T) at a certain price and thinks the price is going to be lowered. Also they are expanding their facilities because of Tech and have had a lot of CapX lately.

It is dependent on the coal market. They cut the dividend a while ago and might do it again. They are a one trick pony.

Just had a dividend cut and the stock was absolutely decimated. Thinks the fall in the stock price is when 2 of their customers said they are no longer going to ship coal. The stock is pricing as though their largest customer, Teck Resources (TCK.B-T) is going bankrupt. Teck’s coal exposure is only about 25% of its business. Also, has copper and other base metals and have no debt with about $40 million-$50 million in cash. For a long-term investor, this is actually not a bad time to start looking at this company.