RE:Filling the gap?Taman,
We could easily move to $5.6+ in May, assuming the following takes place:
- Company updates steady construction progress at NATO (Update due May 8th).
- Contracting for remaining capacity on track (TD mentioned a contract expected by May, CIBC mentioned May/June time frame for the next contract).
- Dividend maintained or cut less than expected.
After the an initial rally to the high $5s/low $6s, I expect the stock to stall until mid-August, at that point we will have a final update on NATO construction and expected ramp up, if all is going as planned and a new competent CEO is hired by then, the stock should resume its climb to the $7+ area.
Longer term (2015), I expect CUS to partner with an industry player on NATO or fully exit the facility. A partnership or a full exit should unlock good value for shareholders, with the resulting funds possibly redeployed to payback debt, buyback shares and used to further expand and diversify our chemical business.
The current malaise experienced by Canexus is temporary, this is a company that chewed more than it could swallow with NATO, but this ordeal is coming to an end. Once in a while a good company stumbles thus creating a great buying opportunity for long term investors: Coke in the 1980s with New Coke, MacDonald’s losing its touch in 2003, H&R Reit building the Bow tower in 2008, all those companies ultimately overcame those mishaps and recovered to their old highs. Canexus core business is sold, stable and has been a money maker for 50 years, those who have the patience to see NATO through, will ultimately enjoy owning a piece of a sold, profitable and steady dividend payer for decades to come.
I really wish people wouldn’t be sucked in with short term blabber and focus instead on facts and common sense; I have made millions in my investment career by following nothing more than patience and common sense.
Regards,
Nawar