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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: On BNN 2/25,guest V Hirsch said that SJ,whose business is utility poles & railway ties,has great management.SJ is starting to get major orders to replace poles as its average live is coming to an end.CNR stated that it is expediting replacement of railway ties because of slower volume when it is easier to do it. 5I,any other news & is it reporting on. March 14.Appreciate your normal great services & views.
Read Answer Asked by Peter on March 02, 2016
Q: I appreciated Ryan's take on stocks that can benefit on the low Canadian dollar in your recent blog. Of the ones mentionned, I was wondering which would be the best buy at the moment, not considering the rest of one's asset distribution? I notice, for instance, that Blackcome has gone up quite a bit over the past year, while the others have fallen. I like the idea of something as solid as railway ties. I guess they will always be needed. But, maybe one of the others is a better buy at the moment.

As i say, asset mix is not a consideration at the moment. Also, in profiting from the American dividends, is it possible to get the dividends in US dollars straight out, or do the brokerages all convert them to Canadian?
thanks
Read Answer Asked by joseph on February 22, 2016
Q: In response to Rajeev's concern about the drop of SJ from $54 high to $41.50 over 4 weeks on Jan 25,5I recommend to BUY.Today it closed @ $45.18,up $3.32. Today,Laurentian Bank,BNS & TD set target price of $56.50,$50 & $51 respectively & RY upgrades it to outperform. 5I appreciate your recommendation,great views & services
Read Answer Asked by Peter on February 05, 2016
Q: I have a decent holding in this co. and read your recent comments on Stella-Jones. There appears to be no logical explanation to sharp drop in stock price from a high of $54 to a low of $41.50 within a span of 4 weeks. Even on market up days, stock's advance is fairly muted. I feel that 20% decline could not be entirely market related. My suspicion is that market is punishing the stock due its association with railways. What percentage of its business is from railway ties? Utility polls business should be stable ? Is there a large short interest ? How is its valuation on current and forward basis? Do you believe it's an excellent time to add at current levels? Thanks
Read Answer Asked by rajeev on January 25, 2016
Q: SJ Down 5% today.Is there any specific news or because of a poor market?It has been a great performer reaching a $54 high in Dec.I bought it @ $27.50--thanks to your recommendation-,so should I take some profit now in this market,do nothing or buy more.It is about 3% of my portfolio & in my RSP a/c.Appreciate your normal great services & views.
h
Read Answer Asked by Peter on January 11, 2016
Q: In a response to a prior comment on this stock you mention how SJ anticipated "the upswing in the spending cycle" I guess for poles and ties. Your April report forecasts a 1 year Revenue growth of 10.4% vs 5 year growth of 25% p.a. and a more recent (Nov.) TD report of forecast 18% growth for 2016, which I can assume is partly extraordinary FX gains to date and partly acquisition based since Apr. What I wonder about is just how cyclical is this business and what a decline in the spending cycle of utilities and railroads might look like. TD forecasts only 7% YOY Revenue growth of 2017 vs 2016 but does not take into account any M&A activity. When was the last downturn in this business and how long did it last? I note they grew EPS in 2008/9 but were a much smaller outfit then. Thanks, J.
Read Answer Asked by Jeff on January 05, 2016
Q: Thoughts on currency hedging these days?

http://canadiancouchpotato.com/2015/02/04/stepping-back-from-the-hedge/

"McCreath sees the supply of oil as being the key determinant as to whether the Canadian loonie hits US$0.65, taking stocks down with it, or a perceived recovery of oil prices into 2017 enables Canada to outperform." Your thoughts and to What CDN companies do you like most that are US currency friendly? I will find it even harder to invest in good US stocks for 2016 (i.e. Disney, Costco, Monster Bev etc) since we'll lose out on the currency rate this year.
Read Answer Asked by Michael on January 05, 2016
Q: Just a note I recall reading approx. 1.5 years ago about SJ that came from SJ themselves.

SJ who makes hydro/telephone poles & railway ties out of wood said that the ~25 year life span of these items (my bad memory, but I think it was 25 years or it could have been a little longer) would need replacing starting in the next year or so, N.A. wide in general. This represented millions of pieces.

Since SJ is a major player in this industry SJ predicted , as could almost anyone who was aware of this scenario, that SJ would have increased volume and profits as a result for the next few years, which typically grows their stock price as we have started to see.

Ya, SJ.

Have a great day.

Also Loving the volatility of many stocks these last few days. Easy to make 5% to 15% in a few days with some extra cash based on technicals, for now rather safely.
Read Answer Asked by Stan (1) on December 20, 2015
Q: Hi, Stella-Jones stock has been quite strong for past 2 weeks with all time intra day high of $52. I also noticed some fairly large block trades starting at $49.75 and recently at $51.50. Do you think there is some new institutional interest in the company? Ram Forest Group is engaged in supplying timber to US residential homes market. Is this a positive ? How is the valuation of stock, versus, growth prospects of various segments of its business, railway ties, poles, residential lumber etc? I have a 3% position and considering to build up to 5%. Should I wait for the stock to settle ? Thank You
Read Answer Asked by rajeev on December 07, 2015
Q: On Sep 28,You chose the following stocks for my risk aversed 27 yr old daughter:SJ(Investment a/c),POW,CGX & ATD.B(Rsp)& CSU,BIN,MG & GIL(Tfsa).Please advise if the selections are still effective & any changes.Is this a good time to star?.How much has the strong gain in October taken from November & the rest of the year? Appreciate your usual great services & views
Read Answer Asked by Peter on November 27, 2015
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