Black Diamond Group (BDI.TO)

Energy services. It got hit hard in the fall. It is not a super high margin business. It bottomed. It has all the metrics he looks for. 6% yield. It is a recovering story.

Black Diamond Group (BDI-T) or Horizons North Logistics (HNL-T)? This has more exposure to southern Alberta as opposed to the oil sands. There is a potential catalyst in LNG on the West Coast, and the decision should be made by June or July. There are only about 3 players that could bid on these, and both of these companies are in that field. At these levels, he would hang onto both stocks. Yield of 9.23% which the market is concerned about, as well as future growth if the LNG doesn’t get started.

Trades at a higher valuation than Horizon North Logistics (HNL-T), but tends to be less volatile. The one major difference between these 2 companies is that Horizon North produces some of their accommodations, while this company doesn’t. Also, this company has exposure to Australia while Horizon North is limited to North America. Both are very good names.

A provider of temporary workplace accommodation, primarily in Western Canada, in the oil sands. Likes the name and likes the space. Thinks this space is going to be growing 18% over the next 5 years because of the projects they are involved in. (See Top Picks.)

Temporary housing accommodation camp provider. Have reached a point where they are more like four-star and five-star hotels because of the labour shortage. Stock has been hitting all-time highs. Does about $120 million in EBITDA. There are about 50,000 beds in the oil sands and they’ve got about 11,000 of them. A replacement cycle is going to happen because a lot of the beds are older. Because of West Coast LNG facilities that are likely to go ahead, one facility will require about 4000 beds. If 2 or 3 of them get going, you could get about 12,000 beds. Also, in the US and gaining quite a bit of traction. Made an acquisition in Australia last year that hasn’t panned out yet and probably not going to see any positive earnings for a couple of years. 4% dividend. If she were the CEO, she’d be considering raising some cash.

He got out. He likes it, however. Prefers Horizon North Logistics. He got out in Mid-July.

Temporary housing accommodation camps. Stock is near an all-time high. Had a softer Q2 than people were expecting but that was following a strong Q1. Trading at 6X EBITDA. Doesn’t expect you will get multiple expansion on this, but you will get growth. They’re in the oil sands, but are also exposed to LNG down the road so they are well-positioned.

(Market Call Minute.) This is in great shape. There are about 12 analysts on it and it is widely recommended. Good dividend.

Temporary housing accommodations. It is essentially a 5 star hotel that keeps moving around. Expanding into Australia. About to break out.

Makes remote accommodations for mining, oil, gas companies. Try to put together accommodations in remote areas in 3 months which requires quite a bit of expertise. Although it is a cyclical, management has been able to execute very well. They use very conservative accounting to write down their equipment, etc. Probably not a bad entry point but it is in the sector where there are some headwinds right now.

Shows up well in some of the models he runs. Has held in reasonably well. Do a lot of business in some of the oil sands structure. Still feels there is room for growth.