Canam Group Inc. (CAM-T)

This is going private and went up 96% today.

Structural steel. A very cyclical, and highly asset intensive in terms of what is needed in working capital. Make sure they have the balance sheet needed, because it is cyclical. A competitive business. They often have contracts that can either make them or break them.

Believes they just reported a loss of about $28 million which is huge, but their backlog he believes, is at a record level. Their financial statements are pretty good. With their structural steel division, it is 12.8% of the enterprise. They are talking about wrapping that down, and possibly eliminating it. If they do that, there are going to be some write offs associated with it, which will negatively impact the stock price. He likes the company overall.

Will really benefit from the lower dollar. As long as the dollar stays where it is their prospects are not bad at all.

(A Top Pick March 25/15. Up 3.75%.) This was a play on market share in that a lot of their business was in the US. He still likes this.

(A Top Pick May 12/14. Up 7.67%.) Sold his holdings. Liked the story and followed it for a very, very long time. It was extremely cheap, trading in the $7 range. The number you want to watch for on this is the Architectures Billing Index. It was expanding and expanding, so it was getting a lot of non-residential buildings. Then they started getting big, big contracts such as stadiums and bridges. Their backlog was getting bigger than they had ever seen before. It is great to get a big backlog, but you have to be able to work through it profitably and on time, which becomes a challenge on big projects.

Commercial construction the US. They also offer architectural and design services. More than a $ billion back log.

Makes bridges and industrial buildings. This has had a bit of a wild ride. Had 2 quarters where they really disappointed. The 1st quarter this year was weather related, and this last quarter they missed expectations because their back log was too big. Margins got squeezed and they weren’t getting the amount of work done. They have to hire a lot of people to get through that back log. If you hold this name, watch next week when they report to see where this company goes. He thinks it was just 2 short term misses. He has a lot of faith in management.

Steel fabricator making bridges, steel joists, a lot of industrial and commercial type work. Commercial building lags residential building. Residential building has really spiked up over the last few years and now commercial building is starting to spike up and a lot of data is pointing towards this. When you have a big backlog, you have to hire a lot of people to do a lot more over time and things that hurt your margin. Stock has had 2 misses. One was because of weather, and Q2 was because of backlog. Now the risk/reward is pretty attractive. It is very undervalued relative to its history and to their peers.

The industrial build out in the US is continuing. The back log is record, up 30% this quarter. The last quarter was affected by weather. Management seems very confident in the future. 10 times earnings.

This is a name that you don’t want to hold for a whole cycle over a few years. You want to hold when margins start to grow, when non-residential building starts to really build up and that is where we are getting to right now. The Architectures Building Index, which is a good forward indicator for the stock, came out positive. Getting a lot of contracts. Just reinstated their dividend.

Well run. Involved in steel fabrication. They stumbled but they turned it around. He sold and is now out. Likes management. He may buy it again if it ever comes down. A lot of institutions want to see a dividend.

A margin growth story. Gross Margin was 7% after the 2007/8 collapse. It is a story about building out the US. Margins are now up to 16% and if they can drive them to 19% it will drive the valuation up. About half of the business is in the US.

Doesn’t own but is going to try and accumulate under $5 over a period of time. If it can break above $5 on some good volume, then it has the potential to go up another couple of dollars.