Canadian Stocks Set to Benefit From US/China Trade Issues

The Canadian stocks on our list could get an unexpected boost from their U.S. customers

SmallCapPower | July 12, 2018: The Trump administration has proposed an additional US$200B in tariffs on China, on a wide variety of goods. The move would bring the percentage of Chinese exports under tariffs to ~50%, in conjunction with the US$34B tariffs already in effect and US$16B previously proposed. Beijing has previously stated that they would respond in kind to any further tariffs, although the form that it would take is uncertain. We’ve previously discussed Canada-listed companies that could be exposed here. The Canadian stocks we have identified today sell goods on the U.S.-China tariffs list and are otherwise relatively unaffected by the ongoing trade war.

Chemtrade Logistics Income Fund (TSX:CHE.UN) – $16.10
Commodity Chemicals

Chemtrade Logistics Income Fund owns 64 production facilities of assorted chemicals throughout North America. The Company’s business segments are Sulphur Products & Performance Chemicals, Water Solutions & Specialty Chemicals, and Electrochemicals.

  • Market Cap: $1,490.8M
  • Enterprise Value to Sales: 1.8x
  • 1 Month Total Return: 2.8%
  • YTD Total Return: -13.8%
  • Targeted Products: Chemicals

SunOpta Inc. (TSX:SOY) – $11.51
Food Processing

SunOpta is a Canada-based food processing company, focused on organic and non-GMO food products. The Company’s Global Ingredients segment sells grains, seeds, fruits, and vegetables. Its Consumer Products segment sells fruit products, snacks, aseptic beverages and  premium juices.

  • Market Cap: $999.8M
  • Enterprise Value to Sales: 1.0x
  • 1 Month Total Return: 9.9%
  • YTD Total Return: 18.9%
  • Targeted Products: Grains, Fruits, Vegetables

Clearwater Seafoods Inc. (TSX:CLR) – $5.62
Fishing & Farming

Clearwater Seafoods is North America’s largest vertically-integrated, publicly-traded shellfish harvester. The Company sold 94M lbs of seafood in 2017 to more than 40 countries. CLR owns 10 fishing vessels operating in Canada and Argentina.

  • Market Cap: $367.3M
  • Enterprise Value to Sales: 1.3x
  • 1 Month Total Return: 8.3%
  • YTD Total Return: -21.7%
  • Targeted Products: Fish

AirBoss of America Corp. (TSX:BOS) – $15.53
Tires & Rubber Products

AirBoss of America is a Canada-based industrial company, focused on rubber products. The Company’s Rubber Solutions division sells over 1,000 custom compounds to North American customers, with a 400M lbs production capacity. The Engineered Products division sells rubber wearables, masks & filters, and collective protection.

  • Market Cap: $363.7M
  • Enterprise Value to Sales: 1.1x
  • 1 Month Total Return: 10.2%
  • YTD Total Return: 44.8%
  • Targeted Products: Rubber Products

Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.

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