Westshore Terminals Inc. (WTE.TO)

A stock price can pull back for many reasons: the market itself or your initial analysis was wrong. It happens to everyone. When to cut your losses? What are the prospects of this company going forward vs. other investments. Westshre had a good last quarter, but they are volatile. They are exposed on the west coat to coal shipping. Pays a modest 2.6% dividend. He has no plans to buy it. He doesn't know if it has downside risk, but its upside is limited.

You buy this stock for coal exports heading to the west coast. This is a play on that demand. It has come off sharply, with trade tensions being an issue. If you're uncomfortable with this, sell it and take your losses. Pays a 2.3% yield. Coal is not fashionable and this is not a yield play.

They've extended their coal contracts which has given the market some confidence in it. Pays a good dividend. Still negotiating with major customer Tech Resources, but he doesn't see Tech moving to another terminal. This is alright, trading at 2x book and 15x earnings. Doesn't know if they will increase the dividend.

The largest coal handling facility in the Western hemisphere. No debt with $58 million in cash. Most of the coal goes into steel manufacturing and they have blending capacity and will be doing another expansion, which will drop their payout ratio. A great infrastructure play that cannot be duplicated. Yield 2.6%. (Analysts’ price target is $26.50)

(A Top Pick Aug 29/17, Up 1%) It is a good underlying business but got caught up in the trade wars. He sold it. He continues to follow this business and might repurchase if the trade wars calm down.

A very straightforward simple business. They own a coal loading terminal off the coast of BC, one of the largest in North America. A very stable, simple business. They basically get coal sent in from rail yards across North America, and earn a fixed fee for every ton of coal they load onto a ship. The majority of their customers are locked into long-term contracts. For the last couple of years, they’ve been spending a lot of capital upgrading equipment. When they did that, they cut the dividend significantly. The Capital Spend is going to be done in 2018, and they’ll be in a great position to ratchet up the dividend. Trading at 9X EBITDA which is cheap. Dividend yield of 2.5%. (Analysts’ price target is $26.)

Recently sold. It had a dip and struggling to get back up. The chart is a bit hard to interpret as it looks like it could be a choppy ride and could possibly range between about $30 -20. If you own the stock and happy with the dividend so long it doesn’t reach $20, you should be OK. Dividend 3.4%.

Hold or Sell? A great business. It has a moat as there is never going to be another terminal to hold coal in BC. They are making a lot of hay now because of the big demand for metallurgical coal. He doesn’t own this because it is a one company customer, being married to Teck Resources (TECK.B-T), which runs into trouble every few years. A brilliant asset, but you need more diversification. Would prefer something like Brookfield Infrastructure (BIP.UN-T) instead.

A really good asset. Terminals at ports are kind of scarce assets. Long-term, they are good investable assets. This one primarily serves the coal market. With the downturn in coal there was some panic and worries they would lose a lot of business. The stock really got battered, but has had a nice rebound back.

They have a great asset. They have coal storage and a shipping terminal that is irreplaceable. They take volume rather than pricing risk. The balance sheet is clean and it pays a decent dividend.

This has very high barriers to entry. They own a key coal loading and storage terminal on the West Coast of British Columbia. The stock sold off recently because of some concern and rumour that there is going to be a ban by the previous provincial government on thermal coal exports. When that happened, there was a lot of insider buying. Trading at 9X EBITDA. Dividend yield of 2.5%. (Analysts’ price target is $27.)

The largest coal handling facility in North America. This was recently in the news when the former BC Premier announced that she might not allow coal shipments from the US. A very quality, large infrastructure asset. If this keeps getting beaten up by the market, there might be an opportunity. Dividend yield of 2.9%.

Return on Capital went from 13% in 2015 down to 8% in the 1^st quarter. In the long run, it had some good returns through the years, but is clearly in a downturn right now. The valuation doesn’t look that great.

Thinks of this as extremely steady. The business will improve for the next couple of years. It is basically shipping coal from Alberta/British Columbia to China. The coal business is picking up again. You don’t own this for capital gains, you own it for the highly, highly certain dividend. It will do well for the next couple of years.

(Top Pick Apr 6/16, Up 60%) He bought it when the world was coming to an end for met coal. That has all changed now and the business looks a whole lot better. It has a good return on equity with a reasonably good price momentum but he finds there is better place to fund better valuation.