TSX:CUS.DB.D - Post by User
Comment by
Nawaralsaadion Apr 03, 2014 10:50am
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Post# 22405424
RE:waiting game
RE:waiting gameWe are merely days to weeks away from the signature of additional take or pay contracts for NATO, and a short 4 to 5 months away from the finishing of construction of phase two at NATO. Thus soon enough the market will switch from looking at the rear view mirror (capex overspend, high dividend payout ratio, fired CEO) and will start anticipating the ramp up of cash flow at NATO, the increased sustainability of the dividend and so under the leadership of a new CEO. Those developments will have a tremendous positive impact on the value of Canexus over the next 4 months. The market today is offering anyone with a bit of patience and foresight an opportunity to position themselves and profit from the events to be unfold over the next few weeks.
Not to forget CUS is not only about NATO, the company underlying chemical business is rock sold, and while 2013 was a cyclical pricing trough, 2014 is set to benefit from a weak Canadian dollar and 2015 should bring in improved pricing as is the case with a cyclical industry where prices vacillate between hitting marginal production costs of the highest cost producers (where the industry is today) to hitting the maximum input cost absorbable by our customers (where the industry was in 2012).
Canexus at $5 or under as a unique income opportunity, combined with the likelihood of a large capital gain over a comparatively short period of time. Companies with such key strategic assets and strong long term fundamentals don’t stay cheap for too long.
Regards,
Nawar