TSX:CUS.DB.D - Post by User
Post by
Nawaralsaadion May 08, 2014 10:57am
481 Views
Post# 22538535
Interesting reaction
Interesting reactionCanexus has been hammered with a multitude of bad news over the last 6 months:
- Chemical prices declined substantially, thus bringing the chemical business EBITDA to multi-year lows.
- NATO cost estimates upped by 40%
- Dilutive secondary offering.
- Construction delays and slow NATO ramp up.
- Terminal contracting disappointments.
- CEO fired, a temporarily vacuum of leadership
- Dividend cut by 27%.
The only thing missing is an earthquake to destroy their plant in North Vancouver or an Asteroid to flatten their Manitoba plant.
Yet, despite all of this the stock continues to bounce in $4s, if this is not a floor, I am not sure what is. At some point over the next 12 months, the tide will begin to turn, and with such lowered expectations, it won’t take much to move the needle to the other direction.
Ultimately Canexus will move to the $7s area, the asset base and the company potential earning power do justify such a valuation under normal operating conditions. The only thing that is required to get there is some patience while collecting a sizable dividend still.
Regards,
Nawar