A Good Time to Sell FPI

Article Excerpt

FPI LTD. $5.80 (Toronto symbol FPL; SI Rating: Extra Risk) fell to $4.05 a share in November 2005 over fears that Ottawa would impose new taxes on income trusts. The uncertainty forced FPI to suspend its trust conversion plan for its Ocean Cuisine International division, which sells seafood to retailers and restaurants. It had hoped to sell part of Ocean Cuisine to the public, and use the cash to pay down debt and buy new equipment. Now that Ottawa has clarified its intentions, FPI’s stock has moved up on speculation that it will proceed with the Ocean Cuisine conversion. But growing international competition in the seafood industry will probably force FPI to restructure its harvesting and processing operations, offsetting the gains of the Ocean Cuisine conversion. Now would be a good time for safety-conscious investors to sell. sell…

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