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Jan 29

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An LNG Venture: Macro Enterprises

Back in the summer I bought a company called Entrec whose business was to provides large cranes and heavy load transport services.  My purchase was based on the thesis that there would be increased demand for these kind of services as the liquefied natural gas terminals began to be built along the BC coast.

Well I still believe that this thesis plays out over the next couple of years and Macro Enterprises (MCR) is my second endeavor under its umbrella.  Macro provides pipeline and facilities construction services in Northern Alberta and British Columbia.

Macro should benefit from the construction of the LNG facilities anticipated over the next few years. There were a couple of good articles written by ARC Energy’s Peter Terzakian with respect to the opportunity presented by LNG development (here and here).  Terzakian quantified the magnitude of the impact of LNG spending as follows:

If three projects get the green light, the implied wave of capital crests at $16 billion per year in 2017. Let’s consider some comparative perspectives. Spending by oil and gas companies in BC is typically only $6 billion a year, so the magnitude of what’s to come could be nearly triple at the peak. How about the speed of the wave? What happened during Alberta’s early oil sands development provides a comparative vignette: Three LNG projects will generate a steeper spending swell than what the Fort McMurray area experienced a decade ago. Read more

Jan 26

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Sherritt and the Indonesian Nickel Ban

I spent my free time during the last couple of days reviewing Sherritt International.  I wanted to get some more clarity on my investment and come to a conclusion about the size of the position that I should have.  As I have talked about in the past, my free time is limited and so my upfront research on names can be less than complete.  I usually take small starter positions, between 1-3%, and then increase the size of those positions once I have had time to digest and review the idea in more detail.

As I tweeted last week, there were a number of catalysts that led me to take a position in Sherritt:

After digging deeper into the name, the conclusion that I came to is that Sherritt is really a play on nickel.  I think that as goes the price of nickel, so goes Sherritt. Read more

Jan 21

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My Second Venture Venture: Avcorp

This is my second in a series of posts I am writing about smaller Canadian stocks which are either on the Venture exchange or should be, and that I have taken a bit of a bucket approach with.  I am buying small positions with the hope of taking advantage of the individual company dynamics as well as the larger theses that the Canadian dollar that will benefit their competitiveness and that there is an improving speculative investment atmosphere for Canadian stocks.

For those of you not very interested in stocks with a market cap in the double digit millions, I apologize.  I do not plan to become a penny stock guru, it just seems to be a place where some opportunities lie right now.  I did make a couple of tweets over the last week of two larger company’s that I have added in the last couple of weeks;  Sherritt International and Nordion.  I’ll try to come up with more extensive write-ups on both of these positions at some point, but because they are reasonably large well known entities I felt that the tweets were sufficient explanations of my rationale, whereas these micro names required further delineation.  Its worth noting that my positions in Nordion and especially Sherritt are significantly larger than what I am putting into something like Avcorp.

On to Avcorp

Avcorp (AVP) is an interesting little story that I have a small (less than 1%) position in.  Before I go too far into it, a word of warning; this is a stock that certainly might not work out and it may just languish at these levels indefinitely.  However there is a chance it breaks out to significantly higher levels if the stars align just right, and that’s why I have a position. Read more

Jan 16

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The first of my Venture ventures: ADF Group

One of my themes for 2014 is investments in the TSX Venture exchange.  I post the Venture performance every month when I compare it, along with the S&P 500 and the TSX, to my own performance. Since I started this blog, the Venture has been in a steady slide down and now is only a little more than half the value it was in 2011.

Now some of this move is of course due to an end (or lull if you so prefer) of the commodity boom, and many of the stocks associated with that boom aren’t coming back.  But I think there are also a number of names that have been dragged down with the ship, and that there are opportunities within small Canadian stocks that reside on the Venture.

So far I’ve got five names that I’ve taken a position in.  The company’s I am investing in are all quite small, so I am keeping my positions small and I’m not going to broadcast these posts all over twitter because my intent here is not to pump them as I think they will do just fine on their own merits.  In this post I am going to start with a discussion of ADF Group. Read more

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