Q: RUS has proven it continues to operate as a going concern through highly stressed markets (2008, 2020) and can be highly leveraged to industrial steel consumption. CDN has several major 'Nation Building' projects that will kick off in 2026/2027 and take years to complete. (Ports, LNG, Pipelines, Ships) Tariffs on CDN steel mean CDN should have excess steel to be consumed in these domestic projects.
Does this thesis make sense to you? IF the thesis plays out - would you expect outsized growth in RUS relative to other alternates?
Thanks for your continues great service!
Glenn
Does this thesis make sense to you? IF the thesis plays out - would you expect outsized growth in RUS relative to other alternates?
Thanks for your continues great service!
Glenn
5i Research Answer:
We think the thesis makes sense and on top of it, the continued trend of onshoring should support demadn at the margins, regardless of whether it is in the US or Canada. At 11X forward earnings, a 4% yield and the top-line expected to grow 10% this year, we think it looks fine. Our main concerns here would be that RUS will be sensitive to an economic slowdown if one were to come. Also, it is a name where any morning you could wake up to some sort of tariff type of headline that takes the shares lower in the short-term. In turn, we would prefer to take a longer-term approach with a name like RUS.