Primary products from the Canadian stocks on our list could be significantly affected by the recent imposition of tariffs from the United States and subsequent retaliation by Canada
SmallCapPower | June 4, 2018: The Trump administration has declined to renew exemptions to its steel and aluminum tariffs, placing Canada, Mexico, and the EU under 10% tariffs for steel and 25% tariffs for aluminum. Canada responded on Thursday, placing 20% tariffs on iron and steel products and 10% tariffs on a wide variety of other products, targeted at voters from American swing states. U.S. tariffs took effect on Friday and Canadian tariffs will take effect on July 1. In March, we discussed some iron and steel companies that could be affected here. The Canadian stocks on our list today could see tariffs imposed on their primary products.
Stelco Holdings Inc. (TSX:STLC) – $24.00
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: $2,131.5 Million
- 1 Week Total Return: -8.6%
- YTD Total Return: 5.7%
- Volume Percent Change One Day: 664.6%
- Targeted Product: Iron and Steel
Corby Spirit and Wine Ltd. (TSX:CSW.A) – $21.00
Distillers & Wineries
Corby Spirit and Wine markets a variety of domestically-produced spirits and wines. The Company owns or represents 12 of the top 50 spirit brands in Canada by case volume, as well as a number of leading international brands. Although 93% of the Company’s revenue is sourced from sales to provincial liquor boards, the Company also sells selected brands in the United States and Europe.
- Market Cap: $589.2 Million
- 1 Week Total Return: 4.4%
- YTD Total Return: -7.2%
- Volume Percent Change One Day: 480.7%
- Targeted Product: Whisky
Western Forest Products Inc. (TSX:WEF) – $2.78
Forest & Wood Products
Western Forest Products is a Canada-based lumber producer operating in British Columbia and Washington State. The Company produces 1.1 billion board feet/year (Bbf), primarily of red cedar and Japan specialty. Its timber resources are largely unaffected by the mountain pine beetle, a pest that threatens to kill large proportions of western forests.
- Market Cap: $1,097.6 Million
- 1 Week Total Return: -3.0%
- YTD Total Return: 15.2%
- Volume Percent Change One Day: 160.2%
- Targeted Product: Plywood – Trump has threatened further action on timber and lumber
Leon’s Furniture Ltd. (TSX:LNF) – $18.25
Department Stores
Leon’s Furniture operates several brands of department stores, including Leon’s, the Brick, the Brick Outlet, and the Brick Mattress Store. In total, the Company operates 189 stores across Canada. In addition, LNF supplies home appliances for commercial use, and offers repair services and insurance products.
- Market Cap: $1,393.2 Million
- 1 Week Total Return: 0.6%
- YTD Total Return: -0.4%
- Volume Percent Change One Day: -69.6%
- Targeted Product: Assorted Appliances and Mattresses
AGT Food and Ingredients Inc. (TSX:AGT) – $15.64
Food Processing
AGT Food and Ingredients is a Canada-based food processing company. The Company processes pulse and grain, distributes food products, and packages human and animal food. AGT operates grain elevators and railways in Saskatchewan to assist in transportation.
- Market Cap: $379.1 Million
- 1 Week Total Return: -0.8%
- YTD Total Return: -21.5%
- Volume Percent Change One Day: 417.7%
- Targeted Product: Prepared Meals, Assorted Food Products
Second Cup Ltd. (TSX:SCU) – $2.17
Restaurants & Bars
Second Cup is Canada’s second-largest specialty coffee retailer by cafés. The Company operates 286 locations across Canada. In addition to hot and cold specialty coffees, Second Cup offers teas and other beverage, as well as pastries, frozen yogurt, sandwiches, and coffee accessories. The Company provides its franchisees with real estate assistance, training programs, program development, and technical support.
- Market Cap: $43.3 Million
- 1 Week Total Return: -6.9%
- YTD Total Return: 0.0%
- Volume Percent Change One Day: 41.3%
- Targeted Product: Coffee
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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