Russel Metals (RUS.TO)

A Canadian play. The Trump threats are much ado about nothing. He's not worried. The chart is choppy, but may have potential. He bought a small amount when it was oversold. He'll watch it.

Looks good. Support level is at the current price. Volume is okay. It's been going sideways long enough to create a support level. Exit below $27. The 5.5% dividend is great. Resistance is likely at $29. Bigger resistance at $31 possibly in the late-summer/early-fall. Next support level is $25 where you may start going through this cycle again. All mineral and energy stocks are traders, so five-year holds are not great, because you can lose money. That's why the S&P has beaten the TSX.

They are embroiled in this NAFTA tariff thing right now. It could move steel prices in the right direction for them since they buy and stock steel. You are at risk of something volatile happening either to the upside or downside. If it got below $25 it would be attractive. This is a difficult business generally. The management team really respect their shareholders.

Has this on his radar screen. It’s one that has a nice dividend, but also has a growth profile. As the oil/gas business continues to drill and do well, they are producing more pipe for that, which really drives their earnings.

Not a stock he has looked at in a long while. It looks like it had a pretty decent rally. It has not done much in 10 years, however. He would look to lighten up and maybe buy it back if it gets to the lows. It is an underperformer.

Historically, steel stocks like this do very, very well from October right through until the end of the year, and then have another move into the spring time. Right now, we are just about ready to enter into the period of seasonal strength. If it moves above its trading range now, that will confirm that once again it is going through its period of seasonal strength.

He likes this for recovering steel prices, steady demand, and its position in Canada as the leading distributor. The yield looks very sustainable. Has a 76% payout ratio. Balance sheet looks really good for M&A, because they want to buy mom and pop shops and be a consolidator. On strengthening steel prices, he models them growing cash flows 25% from 2016 to 2018. However, on a PE basis, it’s a little more expensive than its peers, but on an EV to EBITDA basis, it is in line. He would look to buy this on a bit of a pullback. Pays a real nice dividend.

Has exposure to pipe fabrication. So long as horizontal drilling is going to continue apace throughout North America, they should have good exposure. He likes management.

The company’s energy side is getting traction. Earnings are expected on Feb 15 and expected to more than triple. Free cash flow grew 108%. 5.7% dividend yield. (Analysts’ price target is $32.38.)

This is a “peak of the cycle” stock, i.e., it requires a very good economy with strong demand for its products in order to make a lot of money. This is not the kind of stock he likes. The 5.4% dividend is probably safe.

Just reported and it looks like they beat the numbers the market had been anticipating. Expects the stock price to move higher tomorrow. On a longer-term basis, a lot of this has to do with the oil/gas market, as they do a lot of pipes. The dividend has fairly good coverage, so feels it is fairly safe with some possible growth.

As of Q2, earnings are up 31% year-over-year on better margins. He sees the recovery in steel prices continuing. The wildcard is what happens in their tubular energy sector. Has a high dividend. 80% payout ratio this year and 74% next year. Trading at around 8.2X EV EBITDA versus its peers at around 9.6. Good balance sheet. A good story.

This is at what he considers resistance. If he had a “break even”, he would be a seller. His model price is $44. In the last 8 years, EBV 3 has been a significant resistance for this stock. There is more value elsewhere.

A steel service business. They don’t make steel, but they fabricate it, bend it and shape it to pipe, etc. They do a lot of business in Northern Alberta, and things are picking up there. Doesn’t think it is too late to buy this.

Great management. Operates in a pretty tough business segment, both industrial manufacturing and energy field services. He really likes management. Good dividend yield of 5.5%. If looking to purchase, wait for it to get to $22-$23.