RE:RE:RE:New presentation coming philip3 wrote: Lots of good info, especially on their chemical business. The only eye raiser was "committed to a dividend strategy." Sounds a bit vague and will get the nervous analysts anticipating dividend cuts.
philip; I am not aware of any Canadian Companies that “guarantee” their common share dividends. They always say that the dividend will be reviewed and approved by the BOD on a monthly / quarterly or whatever schedule applies.
In Canexus’ current situation there is certainly the possibility of a reduction. It’s not the worst thing that can happen. When a company continues to pay an unearned dividend for an extended period of time it very seldom ends well. I believe that Canexus will continue to pay the current dividend if they feel that they won’t need to subsidise it for more than a few quarters.
I bought CUS yesterday at $4.73. I was contemplating waiting for them to “possibly” cut the dividend. I concluded that at the current rate my yield is 11.6%, if they were to cut it in half it would be 5.8% which is not too shabby.
If they do reduce the dividend (even if it is for the right reasons) it will most likely result in the usual temporary “Knee Jerk” sell off. Barring any other negative changes to Canexus’ fundamentals I would most likely view that as an opportunity to add to my position at “Sale” prices and take advantage of it.
In any event IF Canexus executes well over the next year and the SP increases accordingly I will have been paid exceptionally (11.6%) or very well (5.8%) to wait.
I have also learned to be patient. I bought Longview (LNV) in April 2013 at $5.03. With the exception of one brief period the SP was basically flat lined or worse. In spite of my opinion that LNV was seriously undervalued I was beginning to lose my patience. Nawar’s excellent research helped me to hang in. Now those of us that had patience are reaping the rewards.
To my untrained eye it appears that the Canexus BOD are doing all the right things to recover from their difficulties with the NATO project but as usual some patience will be required.
As Always; Do Your Own Due Diligence; It’s Your Money !!