Russel Metals (RUS.TO)

Good company. Has a base and seems to be bouncing off it right now at around $24. This would be a little bit of an aggressive play, because it has had some volatility. If you want to, you could use this as a trade and it may hit $30, but watch it carefully.

Their biggest component is energy at about 40% or so. A lot of that is more of a service type revenue. Their philosophy is to pay out 80% of their earnings. This is a warehouse business, so there is not a lot of capital needed, other than inventory. The dividend looks okay for now.

One question that always comes up with this company is the safety of the dividends. It was always a constant 4%, but is now yielding 6%. They are really exposed to industry and infrastructure. It depends on your outlook for those areas. It has come off a bit, but is not at a level where it has shown up on his screens.

This is more tied into iron ore prices rather than energy. With iron ore prices dropping, stocks like this tend to get tarnished by the same brush as iron ore. This looks undervalued. The challenge would be the quality of its dividends. How well are they able to generate the cash flow to pay their dividends?

Materials in general tend to do quite well between now and May. Chart is starting to show a bit of a bottom and it looks like it is an opportune time to Buy. Just moved above its 50 day moving average, so it is starting to rebound. He would like to see more of a bottoming pattern though.

Feels the dividend is safe, but would not add to your holdings.

6% bond maturing April 19/22. (He is biased towards the short term because the market still feels fairly expensive. Corporate credit still offers pretty good value.) They have their challenges right now. They are a metals business, so a big part supports oil and gas, but on the other hand there are a lot of maintenance products they provide. Pretty low levered and has a pretty strong balance sheet.

Has a significant exposure to energy, somewhere between a third and a half of their business. They will certainly feel some pain. He really likes the management team. They have done a good job of maintaining the dividend. Cut their dividend in 2008 during the financial crisis, but increased it coming back out. The rest of their business actually stands to benefit from this. It is more economically sensitive, manufacturing related, so he thinks this is going to be okay through this. Thinks the stock overshot itself on the downside.

This is a metals distributor, and they supply to the energy patch as well as some finishing for industrial companies. The stock will be hurt by the exposure to the energy service sector, whether drillers, pipelines, etc. Not sure if the dividend will stay in place if energy stays low. Yield of almost 6.6%.

He would be looking at good technical support at around the $22-$24 area. It has nice potential of about 60% from there. 6% yield is not bad.

The yield has gone up a lot lately because the stock has done very poorly. This is because about 30% of their business is oilfield tubing. That part of their business is going to be in very sharp decline over the next 6 months at least. It will have a bounce from tax loss selling. He has a small Short position in this, and on any bounce, he would be shorting more. 6% dividend yield.

Has a very solid yield. Good discipline in terms of paying the dividend out of increasing earnings. The stock has been hit lately by oil prices. He looks at it on a longer-term basis. This is a management team that has had a discipline of returning money to shareholders. An industrial name, so it will participate in a Renaissance of the North American economy. He doesn’t get overly fussed by the decline in the price of oil.

How much of its products are energy sector based? Hasn't followed this recently, so he doesn't know what its exposure is to the energy patch. A well-run company in metal distribution and fabrication. He would be surprised if it didn't have some exposure. Companies in the oil patch are starting their budgets right now. You are going to see budgets come down and one of the dichotomies of this is that the oil services sector continues to lead at a premium valuation to the producers and exploration companies, which doesn't make sense. There still is downside risk. Thinks this one has exposure into the US as well, and he is quite optimistic about the US. A well-run and well matched company and you are being paid around a 5% dividend.

Has followed it for a long time. It can be a very volatile business. Cash flow can go up and down a lot. If you are patient and have a long term horizon then it has generated a ton of free cash flow and they are shareholder friendly. There will be quarterly blips sometimes.

Metals and mining sectors usually pick up in the latter part of November. The chart indicates it is still in a down trend and has a little ways to go before reaching its support level.