As of June 4, the US raised the tariffs on steel coming into the US from 25% to 50%.
With the US administration's recent rate increase and their pattern of changing tariff rates on a whim, do you see this as a good time to own LIF?
I am looking at an investment horizon of 5+ years. If it is a good time to invest, at what price would a good entry point be? Thank you for your assistance.
LIF shares are down 2% YTD and trade at 12X earnings now. The dividend varies with earnings, and in June was cut from 50c to 30c, for a current yield now of 4.25%. The company is debt free and has $19M cash, and essentially just cashes royalty checks. After a dip this year, EPS is expected to rise 15%+ next year. But as noted in the question, there is a lot of uncertainty. There is tariff and economic risk here. Still, with the valuation, and low sentiment, we would still consider the stock OK for income. We think it needs to be placed in the 'higher risk' income basket, however. So, if 'adding' we would be cognizant of position size. We are not sure a rush to buy is needed, as we could still see more tariff flip flops. It hit just below $26 in April with liberation day. We think below $27 would work.