Doesn’t think there is any money to be made in this. There are a lot of people more bullish on the stock than he is. Their capital issues have gone aside. They have the new investors and new management. His problem is the business model. It is a funding issue. The cost of financing has gone up, and he thinks the spread is tight, so where do they make money going forward?

This still has a good core business. The router business is changing and they still own that. The way equipment has evolved, they’ve continued to grow, but not at the same rate. Margins are strong. Dividend yield of 3.4%.

He is Short this, but not because of any holes in the story. It was just based on excessive valuations. Growth is still in place. In the short term, the problem is because of questions that were brought up by Citron, especially about the affiliate system, where a lot of people are setting up storefronts just to bring in others. That is not going to last. If you own, he would take a little money off the table.

He has a hard time making an investment for a business that doesn’t exist yet. If you are going to own anything, own the “go to” name, and Canopy is definitely the “go to” name in that sector.

He is warming up to agriculture a little. With the merger, this will be the “go to” name in the sector. It is a good fit. He is seeing a bit of a bottom in commodity prices. You are not going to get hurt by owning either Potash (POT-T) or Agrium (AGU-T) right now.

At best, this is a Hold. He still doesn’t like it. A lot of these big Canadian utility pipelines have done US acquisitions, and the way the Cdn$ has moved, it has worked against them in the short term. His bigger problem is valuation. It is basically trading Debt to EBDA above 6 times. Earnings are growing, but the dividend is a 4% yield. They have something like $2.25 in estimated earnings this year, and are basically paying out 100% of earnings in the form of dividends. They also have a high debt ratio. Growth is only about 5%. Also, the PE multiple is still above 20.

They’ve done a good job in the past couple of years of migrating more to the US to the Permian Basin, giving them higher productivity and higher rates. They’ve done a few acquisitions giving them a broader product and services offering. Has a joint venture with Halliburton for international rigs. The biggest reason is that drilling stocks are trading at about 30%-35% of replacement value of the assets. They’ve always been a Buy at that level and a Sell at 70%-80%. (Analysts’ price target is $2.90.)