CANEXUS CORP 6.5 PCT DEBS T.CUS.DB.D

RE:RE:RE:RE:Blunderheim: Phase Two

[Nawaralsaadi]

Ocean12. Thank you for your comments. I am glad that my analysis has been of interest. Throughout my career I have been in the current Canexus situation (where the stock price is lagging the prediction) many times, and while I don’t have a perfect record, my long term calls on value stocks have often turned out right. In the famous words of the Howard Marks: “Being too far ahead of your time is indistinguishable from being wrong.”.

Investors buying Canexus at the $4.5 to $5.5 level when I started recommending it, will not lose money, Canexus will rally to the $6.5 range in 6 to 12 months after NATO is divested, this would equate to 38% return from current levels (excluding the dividend). My initial target for Canexus was in the $7 to $8 range, I adjusted this target to the $6-$7 range after the worst than expected execution at NATO, but this is why buying a stock with a large margin of safety is valuable, because it allows for the vagaries of life.      

For sure on relative basis, there might have been or might be other stocks that are performing better, but when it comes to investing, you can’t keep looking at what the guy at the next table is eating. I for once treat my investments as an owner in the company, and not as an economic tourist, when a company you own goes through difficulty; you pull your sleeves and go to work to rectify the problem prior to unlocking the company value. The value at Canexus will be unlocked once the NATO execution disaster is behind us. This company has made money for 60 years and will make money for decades to come; all those making negative noise now, won’t even register in anyone’s brain cells couple of years from now.

Regards,
Nawar