Westshore Terminals Inc.

WTE-T

In the industrial base metal space in Canada, there is WTE-T and LIF-T. Both are very fairly priced right now. A highly commodity focused and cyclical business. This space is best to buy into when stock prices have been really hard hit. Global growth for steel trade is becoming a concern. It is not a good time to enter. The yield on LIF-T is 3.8%.

It's been sideways since 2016--dead money. Find something that pays the same dividend but with an upwards chart, like CN and CP.

It is a large terminal that exports coal. He would hold the company. They just finished a capital expansion phase. The dividend is set up to be increased quite a bit. The con side is that it comes down to coal. There is met. coal and thermal coal. TECK.B-T (met. Coal) is about 10% of their business. They hinted at driving some capacity away from WTE-T.

It has great assets in BC. It has no debt and a famous investor owns 30 percent of it. TECK.B-T may move their volumes to a terminal that they co-own next March. He thinks they can't move all of their volume. They have the ability to increase their dividend and they have no debt. (Analysts’ price target is $25.38)

A stock price can pull back for many reasons: the market itself or your initial analysis was wrong. It happens to everyone. When to cut your losses? What are the prospects of this company going forward vs. other investments. Westshre had a good last quarter, but they are volatile. They are exposed on the west coat to coal shipping. Pays a modest 2.6% dividend. He has no plans to buy it. He doesn't know if it has downside risk, but its upside is limited.

You buy this stock for coal exports heading to the west coast. This is a play on that demand. It has come off sharply, with trade tensions being an issue. If you're uncomfortable with this, sell it and take your losses. Pays a 2.3% yield. Coal is not fashionable and this is not a yield play.

They've extended their coal contracts which has given the market some confidence in it. Pays a good dividend. Still negotiating with major customer Tech Resources, but he doesn't see Tech moving to another terminal. This is alright, trading at 2x book and 15x earnings. Doesn't know if they will increase the dividend.

The largest coal handling facility in the Western hemisphere. No debt with $58 million in cash. Most of the coal goes into steel manufacturing and they have blending capacity and will be doing another expansion, which will drop their payout ratio. A great infrastructure play that cannot be duplicated. Yield 2.6%. (Analysts’ price target is $26.50)

(A Top Pick Aug 29/17, Up 1%) It is a good underlying business but got caught up in the trade wars. He sold it. He continues to follow this business and might repurchase if the trade wars calm down.

A very straightforward simple business. They own a coal loading terminal off the coast of BC, one of the largest in North America. A very stable, simple business. They basically get coal sent in from rail yards across North America, and earn a fixed fee for every ton of coal they load onto a ship. The majority of their customers are locked into long-term contracts. For the last couple of years, they’ve been spending a lot of capital upgrading equipment. When they did that, they cut the dividend significantly. The Capital Spend is going to be done in 2018, and they’ll be in a great position to ratchet up the dividend. Trading at 9X EBITDA which is cheap. Dividend yield of 2.5%. (Analysts’ price target is $26.)

Recently sold. It had a dip and struggling to get back up. The chart is a bit hard to interpret as it looks like it could be a choppy ride and could possibly range between about $30 -20. If you own the stock and happy with the dividend so long it doesn’t reach $20, you should be OK. Dividend 3.4%.

Hold or Sell? A great business. It has a moat as there is never going to be another terminal to hold coal in BC. They are making a lot of hay now because of the big demand for metallurgical coal. He doesn’t own this because it is a one company customer, being married to Teck Resources (TECK.B-T), which runs into trouble every few years. A brilliant asset, but you need more diversification. Would prefer something like Brookfield Infrastructure (BIP.UN-T) instead.

A really good asset. Terminals at ports are kind of scarce assets. Long-term, they are good investable assets. This one primarily serves the coal market. With the downturn in coal there was some panic and worries they would lose a lot of business. The stock really got battered, but has had a nice rebound back.

They have a great asset. They have coal storage and a shipping terminal that is irreplaceable. They take volume rather than pricing risk. The balance sheet is clean and it pays a decent dividend.

This has very high barriers to entry. They own a key coal loading and storage terminal on the West Coast of British Columbia. The stock sold off recently because of some concern and rumour that there is going to be a ban by the previous provincial government on thermal coal exports. When that happened, there was a lot of insider buying. Trading at 9X EBITDA. Dividend yield of 2.5%. (Analysts’ price target is $27.)

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.

The CEO, Jim Pattison, is one of the best Canadian investors. Believes he has been buying more of his own stock. This is not his kind of company right now as it is too expensive.

Large coal export facility in BC. Just cut their dividend because the coal business is in trouble. This rates pretty high in his ratings. It has a low PE. China does need our metallurgical coal, so they will utilize these terminals.

This is a coal tunnel for the Asian market. With China’s slowdown and suppliers, whose coal goes through the tunnel, cutting back because they can’t sell enough of it, it’s a problem. A well-run business and doesn’t have much competition. He feels they may end up cutting the payout.

They have done a really good job. It is the only export terminal operating. It is a yield name.

Good company. Reasonable yield and the dividend is safe. Stock price has slowed down because coal exports have slowed down. He believes that longer-term, metallurgical coal is a good business to be in.

(Top Pick Nov 05/13, Up 2.78%) Still likes it. Toll road like business. Nice dividend. A steady infrastructure business that someday a pension fund will want to buy. Coal prices have been under a lot of pressure, but these guys have fixed price contracts. Customers are committed to shipping a certain minimum volume and are big enough so won’t go out of business as coal prices go down.