Rogers Sugar Inc (RSI-T)

There are two players in Sugar. It is such a slow growing industry that this one diversified into maple syrup and due to teething problems, their debt went up. He does not own it  because of the debt.

(A Top Pick Sep 25/17, Up 2%) It is a duopoly in Canada. They hedge themselves. When the new CEO came into to diversify them in to such things as maple syrup, the stock has not performed that well because they were behind with integration. This is a great integration point.

The problem is that it's the beneficiary of a tariff wall against American sugar. This is too scary if you rely on income for your portfolio. Buy Crombie REIT or Fortis or a telco, instead, because their dividends are more reliable and safer.

This is an interesting stock to consider in the face of current discussions of tariffs. The United States sugar industry is heavily protected, and Rogers is protected in Canada. It is one of two main producers, a duopoly behind a tariff wall. He has wondered how long that wall would stand. With Trump in power, he thinks this wall will stay up for longer, making this stock more attractive. However, sugar is a low-growth or no-growth commodity. The social trend is against it and the younger generation consumes less of it. The yield is high (about 6%) and will probably not come down, but it is strictly a yield play. (Analysts' price target is $6.25)

This is a new position he added this year because of the new CEO’s strategy to grow the business. He really likes the new strategy with Maple Sugar. He can see them growing into other forms of ingredients. If they can execute, which he thinks they will, this company could have some good upside if you hang on for the long run.

Seasonally, this is the time of year when people buy all kinds of sweets. The period of seasonal strength is from December through until the end of the year. The chart shows SGG-N has formed a nice little base pattern and has just broken above its trading range. There is a pretty good chance that the stock will move above its current trading range. If you own, continue holding and look for a break out in the next couple of weeks.

Besides sugar, this is now going into maple syrup. Thinks that is a smart move. The company has been a great spin off in terms of dividends. Has never bought this, but wishes he had. Maple sugar is not out of favour the way sugar is. He is not buying, because there is not enough upturn in the stock. They pay a really good dividend.