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This is kind of a two-tiered company. It has a pipeline carrying natural gas into Chicago, with the extraction of liquids. Has been operating for years and years and years. A pretty stable source of cash and cash flow. They are actually expanding the chemical operations in Chicago, which is good. However, the real story behind this company is the LNG plant they are developing in Oregon. It will probably wind up taking Canadian natural gas into the US.
Is the dividend safe? This is an energy stock. If oil prices continue to slide, all dividends in the entire energy sector have to be subject to question. That said, this company has a good balance sheet and the ability to deploy cash between the dividend and reinvestment at a reasonable rate. Their royalty model does make sense.
Making a bit of a recovery. There is increasing interest in the C series jet. Recently out on a rail contract in Mexico. Analysts are carrying about $.40 a share in earnings, so it is trading at 10X earnings, which is not a bad price for a company like this. The market still has a little bit of concern about the cash burn associated with the C series jet. At this level, it is an interesting name.
Recently started a plant in Lethbridge to produce fracing sand. The plant is designed to help them process some of the tailings overburden that they are going to be taking off of their nickel mine sometime in the future. Stock has come under pressure because it needs its capital. In building the frac plant, they had to spend capital, but also raise money for working capital. Over the course of the next year, will the frac sand sales be enough to cover the interest being paid and the debt holders happy?
Had a good 3rd quarter and things were looking quite nice, and then all of a sudden they had an issue with the tax people on a $50 million question mark on whether they have to pay back taxes to Revenue Canada. That kind of hit the stock at a time when oil prices were going down. This was followed by the OPEC release, so it is like a triple storm has hit them. Management has a really good track record of deploying capital well. Recycle ratios tend to be high relative to the industry. Made a US acquisition on which they paid a little bit of debt for it, which has been an additional concern. A good name. You’ll just have to wait and see you what the oil prices are going to do.
A Canadian listed US REIT that is focusing on industrial warehouse space based in the US. A nice way to get US assets into a Canadian portfolio. Has a wonderful yield of 6.5%. Very stable customers. Attractive from the premise that from the US Midwest, you are getting good transportation growth from a distribution angle. Thinks they are 99% leased with some growth potential in what the tenants are paying year after year.
(A Top Pick Oct 17/13. Up 27.11%.) Still one of his core names. Have a great ability to raise the dividend nicely over 5-10 years. He likes that they do a great job of returning money. Big pipelines get all the headlines, but this is able to do 100 million here, 150 million there and they just keep adding, adding, adding, which ends up to cash flow for shareholders.
(A Top Pick Oct 17/13. Up 24.67%.) A year ago, everybody was worried about the cartel and the breaking of the potash cartel. A year later, here we are talking about the breakup of the oil cartel. In the meantime, their capital expenditures have fallen off quite dramatically and they are generating a lot of free cash. Almost a 4% yield.
They are now declaring the dividend in US$’s. As a Canadian recipient of that US dollar income, you don’t know for certain what your payments are going to be. For some people, having a US income is a good thing. On a longer-term basis, this company did cut their dividend, but are slowly restoring it. Have some interesting growth potential with the pipeline going into Massachusetts. A very attractive kind of portfolio holding.
Has a very solid yield. Good discipline in terms of paying the dividend out of increasing earnings. The stock has been hit lately by oil prices. He looks at it on a longer-term basis. This is a management team that has had a discipline of returning money to shareholders. An industrial name, so it will participate in a Renaissance of the North American economy. He doesn’t get overly fussed by the decline in the price of oil.
Markets. Markets are schizophrenic. We’ve had liquidity driven markets since the Fed has engaged in its various QE programs. There is no alternative to US stocks and the US$. The market is concentrating ever increasingly in the so-called safer names, consumer durables, consumer staples, utilities and technology. This increasing flow of money just keeps getting concentrated on one particular so-called safer area where earnings are a little more stable, etc. Contrast that with the bond market and Canadian commodity stocks. The bond market is discounting Armageddon kind of. Money is not quite discounting the future properly. You have the death fear in the bond market that we are in massive deflation and that is now carried over into growth and growth estimates for commodity stocks, which has basically been decimated since the beginning of the year. He is always looking for good income opportunities at a very reasonable price i.e. companies that can grow their dividends.