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

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[factsfinder]

Aston Hill Financial Fund managers Vivian Lo and Andrew Hamlin recommend buying Canexus ($5.69). The Post's Jonathan Ratner writes in the Buy & Sell column that Ms. Lo and Mr. Hamlin manage the $250-million Aston Hill Growth & Income Fund. The managers say Canexus is one of their top-five holdings. They participated in a recent Canexus equity offering. This high-dividend-paying Canadian chemical producer has fallen out of favour with investors because it is spending a lot of money to build a crude-by-rail facility in Alberta, note the managers. Mr. Hamlin says: "They've had some cost overruns and have had to raise more capital. ... But I think the recent equity issue removes the risk to the dividend."

[maris]

They have some major fat in the fire because they have faith (or hope) for CUS. What caused the overrun at the rail facility? Poor planning or did they expand upon the original plans?   

[hawk35]

Hi Maris.  My feeling is that the cost overrun was caused by poor planning because the rail business was new to CUS.  Their core business is manufacturing chemicals so they were likely not that experienced on the rail side.  Two weeks ago TD Waterhouse in their briefing notes mentioned that management brought in "qualified" outside consultants to review the whole project.&

[maris]

Wow if that is so thenwe have  poor poor management. To go into an area of little expertise and not surround yourself with the right people is bad judgement and that could permeate in all areas of CUS business.

[itsalie]

perhaps its time to focus on other stocks Maris..

[maris]

Perhaps we all should be aware of other opportunities; that is  a basic tenet to investing. All the lights will never be green when you drive but IF IF IF  they did overlook something so basic then that is troublesome. I love the duel sectors that CUS is in but IF IF IF  management is CUS' achilles heel then that

[itsalie]

I don't know.. seems to me it was management that noted the stratiegic location of the property, built a plant and now ship oil by rail.. thats a good thing.. overruns happen, all the time.. in fact I don't recall seeing a massive project come in under budget.

[maris]

All excellent points. Now it is about the day to day details that make for a profitable run comapny