Russel Metals (RUS.TO)

This is going to go higher. It could have been a Top Pick. He is looking for $32 over the next 12 months. Its earnings were up last quarter by 31%. He likes the recovery in steel prices, and their tubular segment, which is linked to the energy sector, which has been improving. The dividend is pretty safe right now. 80% payout ratio on EPS for 2017. Trades at a multiple that is below its peers.

The chart shows a “head and shoulders bottom”. You get a shoulder, and then a low, and then the next low is higher than the last low. The stock is attempting to break the neck line, and the chart needs to show that it has definitely broken it. $30 would suggest that the “head and shoulders bottom” is in place, and it could have lots of upside. Wait for another dollar or so before buying it.

It has a 5.9% yield with a 74% payout ratio. Expect an 11% increase in earnings in November. The ROE is 10.5%. (Analysts’ target: $32.00).

There is a little bit of a bid underneath this whole growth profile area, particularly in oil and gas. Numbers show that the inventory is being worked off and there are a lot more rigs coming on. Chart shows a nice trend going from the lows at the beginning of 2016. Indicators are wanting to turn up, but are sort of bouncing around not sure what to do. A stock like this is going to be sensitive to all things economic. Wait until midweek next week and see what is happening with the FMC days. Take half your full position during that time. There is going to be a little resistance around $26, followed by more resistance around $28. There is a lot of seasonality on this. It usually has a fantastic August.

The dividend is sustainable. It was cut in the last major downturn and that may have been a mistake. We have seen an update in North American activity.

This provides steel to both energy services industry as well as mid-and small type manufacturing firms. That has been going well. They are seeing some infrastructure demand in Ontario and Québec and energy demand in the West has stabilized and started to pick up. Located both in Canada and the US. Dividend yield of 6%.

He owns bonds of this company. It is a very cyclical stock. They have cut the dividend before and will again if need be. It is going to be a volatile stock, but it is a very well managed company.

This is part of infrastructure and energy recovering. Q1 EPS beat by 30%. He is fairly bullish on steel prices. They have a competitive advantage being Canada’s largest distributor. He models earning recovering by 55%. They also have a pretty good balance sheet. Dividend yield of 6.1%. (Analysts’ price target is $31.)

Payout ratio is about 102%, down a lot from 2016. It is starting to do a lot better. Metal prices have come up a lot. One of the largest distributors in Canada. Their energy segment, a pretty big component of their business, is a bit of a wildcard. He has been adding to this a lot over the last 6 months. Dividend yield of 5.7%.

A name he likes and has been purchasing it over the last month or 2. It has a path for growth through infrastructure, and pays a good dividend. They may not grow the dividend a ton in the near future, but will be able to maintain it. Expects there will be capital appreciation. Along with the dividend, he would expect 15%-20% upside.

You can be buying now or on a pull back. There are strong tailwinds from steel prices and infrastructure spending as well as a strong balance sheet. They acquired small companies. It is expensive, however. It is cheap on a price to cash flow relative to its 5 year. It has a high dividend. The payout ratio is 102%, but he models it going down next year. Their energy segment is about 35% of their business and is the wild card.

He looked at the name 4-5 months ago, and really liked it. Waited for an entry point but missed the boat. A great name. The dividend is sustainable. The nature of their business tends to be anti-cyclical, from a cash flow point of view.

Has been pretty volatile over the last 3-4 years. It has a significant amount of businesses that is geared towards energy services. Great management team. If it gets over $30, that is where you would want to take some profits. 5.5% dividend yield.

It is interesting. It is a commodity oriented stock that maintained its yield. It is trading based on higher capital spending in North America. He prefers to get his dividends elsewhere, but it is well managed. It is semi-infrastructure. We are seeing a recovery there. Trump may only allow US steel to be used.

Chart shows a downtrend during 2015 that has been broken, followed by a base. Typically, what happens is that when you get a break, you almost always get a test of that breakout. That is called the neck line. It might come down another $.50-$1 and still be in the safe zone. As a disciplined technical person, you let it test the zone, in this case about $24, make sure it bounces and then you buy it.