SHAWCOR LTD. $38 - Toronto symbol SCL

SHAWCOR LTD. $38 (Toronto symbol SCL; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 64.5 million; Market cap: $2.5 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.6%; TSINetwork Rating: Average; www.shawcor.com) makes sealants and coatings that keep oil and gas pipelines from rusting. It also manufactures industrial products, such as electrical wire and protective sheaths.

Low oil prices are prompting oil and gas producers to delay new drilling projects in the Gulf of Mexico. As a result, ShawCor will write down the value of its pipe-coating facility in Texas. Meanwhile, the devaluation of Venezuela’s currency has prompted the company to write down its 50% joint venture in that country.

These charges will cut ShawCor’s earnings by $80 million in the fourth quarter of 2014. To put that in context, it earned $115.5 million, or $1.90 a share, in the first nine months of the year.

ShawCor is still a buy.

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