Saskatchewan: land of many happy returnshttps://cmkxnews.proboards19.com/index.cgi?action=display&board=CMKX&thread=1176594437
Saskatchewan: land of many happy returns
Les MacPherson, The StarPhoenix
Published: Saturday, April 14, 2007
These are happy days for investors in Saskatchewan companies. Warren Buffet's picks have not done as well.
Even Buffet backs the occasional loser. There's none of that in Saskatchewan. All of the province's publicly traded companies are on the ascendancy. Share prices just keep climbing at an ear-popping rate.
Cameco shares, in spite of the flooded mine at Cigar Lake, have almost doubled in the last two years. Shares in the Potash Corporation of Saskatchewan have more than doubled. Shares in the Saskatchewan Wheat Pool, deemed almost worthless not so long ago, today command more than $9. Meanwhile, Shore Gold shares have tripled in value in the last three years, while International Road Dynamics has gone from a few cents to nearly $2. Buffet can only dream of returns like this.
Among the most impressive of corporate performers in the province is IPSCO. Investors from around the world are climbing over each other for a piece of this Saskatchewan action. In spite of nationalist hand wringing over an impending foreign buyout -- "the disappearance of yet another Canadian corporate jewel," lamented the Globe and Mail -- an international bidding war for the Saskatchewan-based steel company cannot be a bad thing.
If no one wanted IPSCO and its Regina steel mill, that would be bad. Consider, for example, the Prince Albert pulp mill, where, sadly, there is no imminent danger of a foreign bidding war. Quite the contrary, the mothballed mill has been for sale for more than a year, with no takers. The hundreds of employees thrown out of work a year ago would be thrilled to bits if even one foreigner could be found to make an offer. A bidding war is to dream of.
Fortunately, the pulp mill is the exception in Saskatchewan. Other companies based in the province, like IPSCO, are very much in demand among investors. Their success is a measure of Saskatchewan's prosperity.
IPSCO share prices in the last two years have climbed from $60 to $160. Who cares if they're driven up by foreign investors? We should be flattered that they're buying into our economy. It tells us we're doing something right. This is not something they can say in jurisdictions where foreign investors are indifferent or unwelcome.
It was to deflect an attempted takeover that IPSCO is now inviting offers from abroad. Among the likely bidders are steel giants in Russia, the U.S., Brazil and India. Good. That people around the world want to invest their money in Saskatchewan is cause for celebration, not worry. As for the "disappearance" of a Canadian corporate jewel, IPSCO is not going anywhere. Investors from whatever country don't buy up profitable companies to shut them down. Having performed well enough to attract worldwide interest, IPSCO is more likely to expand than to disappear.
Besides, IPSCO is already under foreign management. For years the company been run from a head office in a suburb of Chicago. Instead of disappearing, the Regina mill is busier and more profitable than ever. This is what we're supposed to be afraid of?
As well as Saskatchewan companies are doing, I like to think we can always find room in the province for more money.
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Moving from economic news to the more rarefied realm of the paranormal, a British man this week reportedly married a woman he met after dreaming of her telephone number.