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Hemisphere Energy Corporation (HME $2.86)
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Canadian National Railway Company (CNR $152.07)
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Acadian Timber Corp. (ADN $17.25)
Q: Hi 5i.
I was very surprised when you removed Acadian Timber from the Income portfolio this January, as I have always considered it a solid dividend stock. With the trade uncertainties with the US, its cross-border assets seemed like a great advantage. It has performed quite well lately. What was your reason for removing it from the portfolio? Will you still be providing updated reports on ADN?
I was very surprised when you removed Acadian Timber from the Income portfolio this January, as I have always considered it a solid dividend stock. With the trade uncertainties with the US, its cross-border assets seemed like a great advantage. It has performed quite well lately. What was your reason for removing it from the portfolio? Will you still be providing updated reports on ADN?
5i Research Answer:
We will still cover ADN. The removal was due to its high debt combined with a still-cyclical sector, and to make room for new ideas with potentially more upside in addition to income. The high debt and payout ratio does make the dividend less secure, we think there are better opportunities in the market at that time to deploy capital. For instance, we added to CNR and HME in the same month, both have done better so far than the recovery of ADN.