Methanex Corp (MX-T)

Doesn't use physical stop losses because traders can head-fake the retail investors, push them out of a stock, and then swoop in. Instead, he uses a "mental stop loss" and it's always based on support. For high-beta stocks, you have to give it a bit more room because things can whip around.

He bought this a few days ago, as it was pretty washed out. Bouncing off the old support of 2022. His mental stop is just below $45 or so. Hold as long as it goes up, get rid if it fails.

MX has been hit hard with economic and tariff concerns, and now trades at only 8X earnings, with a 2.05% dividend. It is somewhat leveraged, but consensus still calls for earnings growth in the next two years. We think it has good bounce potential over the next few years. We would be OK slowly accumulating this. We would see no rush, and it is going to take a better market for it to perform, but we do think this happens over time. 
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Well run. Fundamentals look good. Believes nat gas prices will firm up, which won't be detrimental to MX. If you think positive economic backdrop in 2025, this one should pick up. Cyclical. Stock recovery should continue in 2025. He trades in and out.

World's largest producer of Methanol (used in Gasoline blending/industrial applications). Canadian company with capacity to produce 10 million tones across the globe. Cyclical commodity that varies with China demand. Earnings $7/shrae in 2018, lost $1.62 in 2020, will earn ~$6.50/share in 2024. Would be a good trade, or something to buy on the dip. Hard to predict outlook of the business. ~1.5% dividend rate, which isn't high - can also be a risky dividend with cyclical business. Would not recommend investing for the long term. 

He took profits when it started to rally. A solid company though and will do well in the second half of 2023. Weak natural gas prices benefit Methanex by lowering their costs. China's recovery Will benefit commodity stocks like this, but it will take time.

Does not own shares.
Proxy to economic growth across economy.
Basic component in large variety of retail products. 
China growth in China slowing.

Likes it. He just took profits. Natural gas is driving shares, and nat gas prices are down now, so MX shares are up. It's a solid performer, but if a recession happens, say 6 months down the road, this will be a headwind.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research.

Earnings per share were 73c, beating estimates of 37c by a wide margin. 
Sales of $986M beat estimates by 4%. 
Earnings did fall year over year as prices fell about 16%, even as production increased. 
The company continues to buy back its own stock. 
The new incoming CEO sounded confident for 2023 and about 30% earnings growth is expected this year. 
The market has responded well to these better-than-expected results. Unlock Premium - Try 5i Free