commodity
SHERRITT INTERNATIONAL $2.62 (Toronto symbol S; TSINetwork Rating: Speculative) (1-800-704- 6698; www.sherritt.com; Shares outstanding: 297.5 million; Market cap: $779.5 million; Dividend yield: 1.5%) sold off all of its coal interests for $793 million in cash in April 2014. The company is now focused on nickel production, with operations in Cuba and Canada. As well, it has a 40% interest in the Ambatovy nickel mine on the island nation of Madagascar, off Africa’s east coast. Sherritt also produces oil and gas in Cuba, Spain and Pakistan and manages 506 megawatts of power generation capacity in Cuba. In the three months ended September 30, 2014, Sherritt’s revenue jumped 55.0%, to $302.7 million from $195.3 million a year earlier. That’s mainly because Ambatovy started up. Cash flow per share rose 25.0%, to $0.15 from $0.12....
CAE INC., $14.58, Toronto symbol CAE, earned $42.0 million in its fiscal 2015 second quarter, which ended September 30, 2014. That’s up 9.9% from $38.2 million a year earlier. Per-share earnings rose at a slower rate of 6.7%, to $0.16 from $0.15, on more shares outstanding. These figures exclude earnings from CAE’s mining operations, which make simulators that train workers to operate underground trucks, loaders and drills. The company recently announced plans to sell this business, as weak commodity prices have prompted mining firms to cut spending on exploration and expansion projects. On this basis, the latest earnings matched the consensus estimate....
Your surest route to investment success is to follow our three-pronged Successful Investor approach:
Of course, I still form opinions on which way the market and individual stocks are likely to move in coming months and years. Some of these opinions fall in the category of predictions—others are more like guesses.
From time to time I share these opinions with investors. Sometimes they turn out surprisingly accurate—other times, not so much. This has become a popular part of our service, so we highlight it under the heading “Guesses, Opinions & Predictions”.
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- Invest mainly in well-established, high-quality companies;
- Spread your money out across most if not all of the five main economic sectors;
- Downplay or avoid stocks in the broker/media limelight.
Of course, I still form opinions on which way the market and individual stocks are likely to move in coming months and years. Some of these opinions fall in the category of predictions—others are more like guesses.
From time to time I share these opinions with investors. Sometimes they turn out surprisingly accurate—other times, not so much. This has become a popular part of our service, so we highlight it under the heading “Guesses, Opinions & Predictions”.
...
Central Fund of Canada, $12.69, symbol CEF.A on Toronto (Shares outstanding: 254.4 million; Market cap: $3.7 billion; www.centralfund.com), is a closed-end mutual fund that holds gold and silver bullion. It now holds 57.4% of its assets in gold bullion, 41.9% in silver bullion and 0.7% in cash.
Central Fund trades at a 10.9% discount to the per-unit value of the assets it holds. It has a 0.32% MER, and the units yield 0.09%.
If you want to buy gold or silver, we recommend staying away from gold or silver bullion, coins (unless you collect them as a hobby) or certificates representing an interest in bullion. That’s because commodity investments like gold and silver bullion do not generate income. Instead, they come with a continuing cash drain for management, insurance, storage and so on. You either pay these costs directly or through a premium built into the price of, say, a futures contract.
That’s why we recommend that you invest in gold through gold- or silver-mining stocks. Unlike bullion, these stocks at least have the potential to generate income. However, Central Fund of Canada is a relatively low-cost and liquid way to hold physical gold and silver, and the 10.9% discount to its net asset value also adds appeal.
If you want to invest in gold and silver bullion, Central is okay to hold.
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Central Fund trades at a 10.9% discount to the per-unit value of the assets it holds. It has a 0.32% MER, and the units yield 0.09%.
If you want to buy gold or silver, we recommend staying away from gold or silver bullion, coins (unless you collect them as a hobby) or certificates representing an interest in bullion. That’s because commodity investments like gold and silver bullion do not generate income. Instead, they come with a continuing cash drain for management, insurance, storage and so on. You either pay these costs directly or through a premium built into the price of, say, a futures contract.
That’s why we recommend that you invest in gold through gold- or silver-mining stocks. Unlike bullion, these stocks at least have the potential to generate income. However, Central Fund of Canada is a relatively low-cost and liquid way to hold physical gold and silver, and the 10.9% discount to its net asset value also adds appeal.
If you want to invest in gold and silver bullion, Central is okay to hold.
...
Every Monday we feature “A Stock to Sell” as our daily post. With every stock we recommend as a sell, we give you a full explanation of why we advise against investing in the stock at this time. Westshore Terminals Investment Corp. (symbol WTE on Toronto; www.westshore.com) owns a coal storage and loading terminal at Roberts Bank, B.C., about 30 kilometres south of Vancouver. The terminal started up in 1970....
TRANSCANADA CORP., $56.05, Toronto symbol TRP, rose this week in response to the U.S. mid-term elections, which gave the Republican Party control of the Senate. That makes it more likely that the U.S. government will approve the company’s Keystone XL pipeline, which would pump crude from Alberta’s oil sands to refineries on the U.S. Gulf Coast. Due to various delays, the company now expects Keystone XL to cost $8.0 billion U.S., up 48.1% from its 2008 estimate of $5.4 billion U.S. To date, it has spent $2.4 billion U.S. on this project. TransCanada also plans to spend $2.7 billion to expand its Nova pipeline network in Western Canada to handle rising shale gas production in Alberta and B.C. In addition, it will invest $475 million to upgrade its Ontario gas pipelines. The company expects to complete these projects in 2016 and 2017....
SYMANTEC CORP., $24.97, Nasdaq symbol SYMC, sells computer-security technology, including antivirus and email-filtering software, to businesses and consumers. In its fiscal 2015 second quarter, which ended October 3, 2014, Symantec’s earnings fell 7.5%, to $332 million from $359 million a year earlier. Per-share earnings declined 5.9%, to $0.48 from $0.51, on fewer shares outstanding. Even so, that beat the consensus forecast of $0.43. Revenue declined 1.2%, to $1.62 billion from $1.64 billion, but still matched the consensus estimate....
Westshore Terminals Investment Corp., $34.34, symbol WTE on Toronto (Shares outstanding: 74.3 million; Market cap: $2.6 billion; www.westshore.com), owns a coal storage and loading terminal at Roberts Bank, B.C., about 30 kilometres south of Vancouver. The terminal started up in 1970. Teck Resources accounts for 56% of the terminal’s volume, and other Canadian coal producers supply 12%. The remaining 32% comes from U.S. customers. Producers ship their coal to the terminal by rail. Westshore then loads it onto ships that deliver it to customers in over 20 countries. The company does not purchase the coal. Instead, it receives a handling fee for loading it....
SHERRITT INTERNATIONAL $2.62 (Toronto symbol S; TSINetwork Rating: Speculative) (1-800-704- 6698; www.sherritt.com; Shares outstanding: 297.5 million; Market cap: $779.5 million; Dividend yield: 1.5%) sold off all of its coal interests for $793 million in cash in April 2014.
The company is now focused on nickel production, with operations in Cuba and Canada. As well, it has a 40% interest in the Ambatovy nickel mine on the island nation of Madagascar, off Africa’s east coast. Sherritt also produces oil and gas in Cuba, Spain and Pakistan and manages 506 megawatts of power generation capacity in Cuba.
In the three months ended September 30, 2014, Sherritt’s revenue jumped 55.0%, to $302.7 million from $195.3 million a year earlier. That’s mainly because Ambatovy started up. Cash flow per share rose 25.0%, to $0.15 from $0.12.
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The company is now focused on nickel production, with operations in Cuba and Canada. As well, it has a 40% interest in the Ambatovy nickel mine on the island nation of Madagascar, off Africa’s east coast. Sherritt also produces oil and gas in Cuba, Spain and Pakistan and manages 506 megawatts of power generation capacity in Cuba.
In the three months ended September 30, 2014, Sherritt’s revenue jumped 55.0%, to $302.7 million from $195.3 million a year earlier. That’s mainly because Ambatovy started up. Cash flow per share rose 25.0%, to $0.15 from $0.12.
...
GOODYEAR TIRE & RUBBER, $24.23, symbol GT on New York, rose over 18% this week after reporting sharply higher earnings in the latest quarter. In the three months ended September 30, 2014, Goodyear’s revenue fell 6.9%, to $4.7 billion from $5.0 billion a year earlier. The company sold 2% fewer tires worldwide, including a 4% drop in North America as car dealers stocked up on cheaper Chinese-made tires ahead of an expected U.S. tariff aimed at limiting sales of imported tires for less than the cost of production. But even with the lower revenue, earnings, excluding one-time items, jumped 39.9%, to $242.0 million, or $0.87 a share. That was well ahead of the consensus estimate of $0.70. A year earlier, the company earned $173.0 million, or $0.68 a share....