Algoma Steel

There's a fair amount of speculation that the Canadian steels are all takeover targets. Starting to warm up to the steels. Have been impressed with how well they have managed inventories.

Sold his holdings in the $30’s. Quite a flat chart over time. Steel industry is cyclical. This company has gone bankrupt twice at the bottom of the previous 2 steel cycles, but has new management, new balance sheet and excess cash. Outlook is a little tepid than it was.

Has been a stellar performer. Bought back a lot of their shares. Steel prices look pretty solid at the moment. A cyclical company. Solid balance sheet. Will be starting to produce their own energy. Reasonable value.

(A Top Pick Aug 11/05. Up 15.7%.) Brilliantly run. Great cash churning company. Wouldn't buy during this market correction, but once it over there is probably $4/5 upside.

Buying back $200 million of its stock via a Dutch auction. Great under valued asset play. Have their cost structure under control. Paying down their debt and returning cash to shareholders. Wait for the auction to finish when there may be a bit of a dip.

They have a lot of cash and there is speculation that they will have a very big distribution. Earnings are lower this year than they where last year. Would prefer it in the lower $30’s.

Steel pricing continues to remain strong which indicates that either 1) things are going to continue to be good or 2) the market is saying things are going to start slowing down and steel will catch up on the downside. He would take some profits as it is probably up on speculation.

Doing a share buyback. Not his top pick among the steel companies. This is a company that has gone through 2 or 3 resurrections. Expects the market for steel will be cooling off probably in 2007/2008.

Still prices continue to rise. There will be some Chinese dumping issues going on which will put a little bit of pressure on them. Right now they are generating free cash flow yield in the 9% range.

Has gone up in the last 2 days because of their announcement of buying back stock starting in the next quarter. The price for their type of steel “high roll” is going up. Not a bad buy.

Steel is starting to look a little bit better again. He is worried about the whole global economy. China is tightening money to help control growth. Steel could be a casualty, but for now, with all the corporate activity, prices are starting to move higher again.

Has always been a tricky investment. Has gone bankrupt a couple of times. This time it has done very well. A cyclical so when it is doing extremely well, it is probably time to let it go.

It's a bit rich. The numbers are weaker then they were in prior years. Imports are not here so the market is stable. They are generating good earnings for the short term, but concerned that they are getting later on in the cycle.

Moved up a little bit in the shadow of Dofasco (DFS-T). A US hedge fund has asked for a special meeting to get them to pay out their big wad of cash as a special dividend. Algoma is resisting but will probably pay out something.

(A Top Pick Sept 12/05. Up 1%.) It now has a US hedge fund shareholder that's calling a vote here to pay a special dividend. Very cheap, but feels the upside is only to $27/28.