Wajax Corp (WJX.TO)

Just came to market and raised about $75 million to repay debt and get their debt level into better form. They are focusing on cost cutting and organic growth opportunities. They’re in a tough spot. 50% of their sales are to mines, oil sands, etc. They were down 7% in the market today and he doesn’t know what the news was. It’s not one that he would be buying here yet.

Yield on this is pretty high and because of their debt position, they are likely to be cutting it at some point. They are related to the oil sector, so that is probably going to soften their earnings.

Trading at 6.4X versus 11.4, its five-year average, so it is cheap. Have just restructured, so that is complete and it can derive cost savings. Its debt to EBITDA is pretty low at 2.1, well below its debt covenants. What is sad is the weak outlook for oil and gas, and for miners. The payout is very generous. This is worth a shot for somebody who doesn’t mind taking a little bit of a risk.

Have about a 12% backlog, and it is up 12% year-over-year, which is encouraging. Cautious outlook, but he does model a 2014 payout ratio of 90%, so the 6% dividend is going to be pretty safe, at least for this year. 18% of their revenue is tied to oil and gas, so they are not too levered. This is a name that you can buy at $33-$35.

Has a payout ratio that he thinks will be at 90% of 2014 and 70% for 2015. Debt levels are becoming more reasonable. Backlog was up 12% year over year as of last quarter. They are reducing their spending, trying to boost their margins and are trying to grow organically. He has been Buying at $34-$35.

He would feel there is more upside on this, depending on what the economy does. Has a decent yield and feels it is fairly sustainable. Their business is doing fairly well. Their backlog grew in the past 12 months.

This company had a good setback in the market. It had got up to about 4X Book, which is really, really expensive for them. They are now down to about 2X Book. It certainly has the potential to get back up to $45-$50. Watch to see if it breaks out technically.

Feels the market has been improving for them a little bit lately, with the increasing activity in oil/gas and some of the mining sectors. A cyclical company. Right now it is probably a good company to own. Management would be pretty determined to retain their dividend. Yield of 6.8%.

Had another bad quarter recently which gives them a string of 7 or 8 bad quarters. Their end markets have been challenged. The mining side has been very challenging and he thinks they have been undercut by some lower-cost equipment. Also, their power side hasn’t really taken off. There could be more downside before they get it sorted out. Dividend yield of 7%.

Has been a good company over time and is a cyclical business. Paying out 95-100% of their earnings as a dividend right now. 7%+. Some believe they should cut the dividend and pay down debt.

In a space that he likes. Chart shows a strong advance from early 2009 to early 2012 followed by an ABC corrective period. There is a bit of support at around $32 level. 6.5% dividend yield.

(Market Call Minute) Hammered due to resource exposure.

Cyclical and a tough business. You want to watch it carefully in terms of the cycles that its products are exposed to. Don’t pay a high multiple and make sure the payout ratio is not too high for these companies. This one has a policy of only 75% of earnings.

Stock price has been absolutely whacked in the last year as a distributor of capital equipment. Now maybe things start to improve. Dividend seems to be fairly safe. Have been fairly responsible in their willingness to cut. You might actually see it back to its previous peaks in the next 18 months.

Likes this. Has come off quite a bit, which is largely a reflection of the slowdown we have seen in mining and, to some extent, in the need for equipment in oil/gas industry as well. Extremely well run company. Still tends to pay out a fairly healthy dividend (6.6%). Thinks there will be a turnaround in the mining sector in the next business cycle and this would not be a bad entry point. For the shorter-term, this may be stalled out.