Chemtrade Logistics Income Fund (CHE.UN-T)

Looking at a 5-year chart, getting close to its 5-year high. Nice breakout above $10. If you take the height of the consolidation pattern (resistance was $10 - support of $7 = $3), and add it up again, you get ~$13, at least to start. That's what we're looking for over the shorter term. Then maybe it consolidates and may continue higher over the longer term.

Very interesting company. Makes sulfuric acid, processes spent acids, produces inorganic coagulants for water treatment. A basic industry company, but one of the largest in NA in terms of asset production. 

A lot of people are focusing on semiconductors, but when you make those chips the purity of the sulfuric acid is extremely high, and this company is an integral supplier. This gives it a good competitive advantage especially compared to European peers, as energy prices in Europe are quite high. Should have a good run going forward. Yield is 5.8%.

Also pays a big, fat dividend, which sometimes you need to be cautious on. Drawing a linear regression line helps the chart make more sense, especially with a volatile stock. Linear regression helps you see through all the peaks and valleys. Stockcharts.com is a good place to go for this, as well as most of the discount brokers.

CHE.UN is up 30% YTD, yet remains cheap at 12X earnings. It is a cyclical company with a lot of debt, with a fairyl weak earnings history. But it has improved over the past year, and debt is lower than the very high levels seen in 2019 and 2020. It had to cut its dividend in half in 2020 and has only raised it slightly since. It is expected to show about 7% EPS growth next year. It offers a 5.92% yield currently. We will give it points for its improvement, but with slow growth and a leveraged balance sheet, in addition to its cyclicality, it is still not one of our favourites. Of note, the stock remains at 50% of the price it was more than 10 years ago. 
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The second quarter was a beat across the board and they raised 2024 by 7%. He doesn't see a lot of growth and there are other areas more compelling. It is repurchasing in the near term. 

Well-run. He owns the stock and debentures.

Small company, good takeout candidate. Pretty volatile. Sometimes the high dividend makes him nervous, is he missing something? But this is an underappreciated name. Sulfur and water chemicals. If can get above previous peak, around $10.50, pretty good upside. Really healthy margins. Raised guidance after recent earnings. Nice yield of 7%.

Pricing power. Good name to have in an inflationary environment. You'll be happy 2-3 years out.

Chemtrade posted strong Q1/24 results, and management is now guiding to the upper end of its 2024 guidance range. The operating segments are performing well and with a significantly stronger balance sheet relative to previous years, the Board has approved a 10% share buyback and the company is also considering strategic M&A opportunities. The balance sheet has improved a bit versus prior years as cash flow has grown. It is still cyclical, but we will give it kudos for its strong quarter and guidance. It is also priced well at 7X earnings. We note the company has cut its dividend in the past, however and at 5.5c is still not near its prior 10c level.
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Loves it. About 5% of his income fund. Still sees lots of long-term upside. New management doing all the right things such as selling some businesses and reducing debt. Increased dividend in January, payout ratio around 25-30%, 7.5% yield. Just reported strong results, putting it at high end of guidance for the year.

New sulfuric acid facility coming online in Ohio in 2025, will be best one in North America. Potential one in Arizona.

Decent company, nice distribution. Not highest quality long-term stock. Doesn't love its growth rate. Input and commodity costs are not always favourable for them. Don't add here. He'd be interested if it really sold off.

In chemicals that we need every day. Global customers -- most are water treatment (pretty stable), some pulp/paper and oil/gas. Down on revenue, but recent earnings and margins really good. Raised guidance again. Don't take a big position, try 1% to start. Big, fat yield of 6.9%.

Raised guidance for second half of 2023. Really likes that it sells chemicals for water treatment, a utility-like business and a stable revenue stream. Very competitive in that market. With population growth comes increased water usage. Also chemicals to onshoring semiconductor industry. Fixed balance sheet, new management, firing on all cylinders.

Dividend is sustainable. Beat earnings last quarter. Strong pipeline of products. Good debt levels, but better names in sector available. Would not buy at this time. 

EBITDA beat by 25%, but market was not excited, since a lot of earnings seemed to be pulled from the second half of this year. Capex lowered. OK leverage. Decent name, decent dividend. There are higher quality names, but this is fine.

Has pulled back. Very good relationships with customers. Recurring revenue. New, very interesting segment of ultra-pure acid, which is used by chip manufacturers. Onshoring theme will benefit this new segment. Will take good market share, really long run, it's just getting started.