The Canadian steel stocks, aluminum stocks on our list all rely on the U.S. for a significant portion of their sales
SmallCapPower | March 9, 2018: On March 1, 2018, the Trump administration announced a 25% tariff on steel and a 10% tariff on aluminum. The orders now exempt Canada and Mexico from the tariffs, with possible exemptions for Australia and other U.S. allies to come. If NAFTA negotiations are unsatisfactory, Trump may alter or remove any exemptions. The Canadian steel stocks and aluminum stocks on our list today have not experienced significant changes in their stock prices, having underperformed the TSX-V by 3% over the past week. Due to the decision by the United States, these companies could see a sudden market response.
Tree Island Steel Ltd. (TSX:TSL) – $2.43
Iron & Steel
Tree Island Steel is Canada-based steel company focusing on steel wire and other fabricated wire products. The Company uses zinc and carbon steel rods to produce eight product categories, for use in the industrial, residential, commercial, and agricultural markets. Tree Island operates five different brands to sell different product categories to consumers.
- Market Cap: $72.6 Million
- 1 Month Total Return: -3.0%
- Enterprise Value to Sales FY2017: 0.5x
- Forward Enterprise Value to Sales FY2018: 0.5x
Russel Metals Inc. (TSX:RUS) – $29.79
Iron & Steel
Russel Metals is a Canada-based metals distribution company, primarily focused on steel distribution. The Company’s metals service division operates 65 centres across Canada and the U.S, processing and distributing assorted metal products. RUS’s energy division produces pipes for the energy industry, while its steel division sells steel to other processors.
- Market Cap: $1,840.0 Million
- 1 Month Total Return: -7.1%
- Enterprise Value to Sales FY2017: 0.6x
- Forward Enterprise Value to Sales FY2018: 0.6x
Exco Technologies Ltd. (TSX:XTC) – $9.91
Industrial Machinery & Equipment
Exco Technologies is a Canada-based industrial company that develops dies, molds and other consumable equipment, primarily for the automotive and die cast industries. The Company’s casting and extrusion division manufactures tools and materials for use in aluminum die-casting and aluminum extrusion machines. The automotive solutions division creates automotive interior trim components.
- Market Cap: $420.5 Million
- 1 Month Total Return: -1.1%
- Enterprise Value to Sales FY2017: 0.8x
- Forward Enterprise Value to Sales FY2018: 0.7x
Stelco Holdings Inc. (TSX:STLC) – $26.39
Iron & Steel
Stelco Holdings owns and operates two steel making facilities in Ontario. The Company produces flat-rolled value-added steels, for use in the construction, automotive and energy industries. Stelco aims to expand production by optimizing operations and restarting facilities.
- Market Cap: $2,340.0 Million
- 1 Month Total Return: 1.7%
- Enterprise Value to Sales FY2017: 2.5x
- Forward Enterprise Value to Sales FY2018: 0.9x
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
To read our full disclosure, please click on the button below: