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(B)(N) Transport Canada

January 31, 2014
Business is a Contact Sport

Business is a Contact Sport

Drama. Business is a “contact sport” (Ronald Coase, 1960) and doing business requires “contact” whether it’s just moving our lips on the telephone or moving people, supplies, raw materials and goods for sale.

Before we can seal the deal, buy the supplies, ship the product, we need to make “contact” and that thought causes us to examine “Transport Canada” to see if we’re just freezing in our tents and skating on our “oil patch” (The Wall Street Journal, January 21, 2014, Canada an Emerging Market? Yes, for U.S. Oil Exports) or are we making contact with the same success as our friends south of the border. Please see Exhibit 1 below for the “fundamentals”.

Exhibit 1: S&P TSX “Transport Canada” – Fundamentals – January 2014

S&P TSX Transport Canada - Fundamentals - January 2014

S&P TSX Transport Canada – Fundamentals – January 2014

S&P TSX Undervalued Transport Canada - January 2014

S&P TSX Undervalued Transport Canada – January 2014

Now, that’s contact! An 18% return on the shareholders equity that most investors don’t know how to get with their own money and a 52% return of earnings for a dividend payout of $7.9 billion and aggregate yield of 3.4%.

In some cases, the payout rate is so high as to leave “blood on the tracks” in the service of the shareholders who have “rewarded” the companies with a paltry $2.5 billion so far this year against an aggregate market value of $236 billion.

But let the good times roll! Of the twenty-eight companies in our survey, all but five are in the Perpetual Bond™ and our estimate of the downside due to the demonstrated price volatility is minus (8%) and we’re still up +53% from last year. Please see Exhibit 2 below and click on the link for the “Portfolio & Cash Flow Summary“.

Exhibit 2: S&P TSX “Transport Canada” – Prices & Portfolio – January 2014

S&P TSX Transport Canada - Prices & Portfolio - January 2014

S&P TSX Transport Canada – Prices & Portfolio – January 2014

For more information on the chart elements and additional references to the theory, please see our Post, The RiskWerk Company Glossary.

And for more on what risk averse investing has done for us this year, please see our recent Posts on The S&P TSX “Hangdog” Market or The Wall Street Put or specialty markets such as The Dow Transports & Utilities or (B)(N) The Woods Are Burning, or for the real class actionLa Dolce Vita – Let’s Do Prada! and It’s For You, Dear on the smartphone business.

And for more stocks at high prices, The World’s Most Talked About Stocks or Earnings Don’t Matter – NASDAQ 100. And for more on what’s Working in AmericaBig OilShopping in America or Banking in America, to name just a few.

Postscript

We are The RiskWerk Company and care not a jot for mutual funds, hedge funds, “alternative investments”, the “risk/reward equation” and every other unprovable artifact of investment lore. We have just one product

The Perpetual Bond
Alpha-smart with 100% Capital Safety and 100% Liquidity
Guaranteed
With No Fees and No Loads on Capital

For more information on RiskWerk, please follow the Tags or Categories attached to this Letter or simply enter Search for additional references to any term that we have used. Related data may be obtained from us for free in a machine readable format by request to RiskWerk@gmail.com.

Disclaimer

Investing in the bond and stock markets has become a highly regulated and litigious industry but despite that, there remains only one effective rule and that is caveat emptor or “buyer beware”. Nothing that we say should be construed by any person as advice or a recommendation to buy, sell, hold or avoid the common stock or bonds of any public company at any time for any purpose. That is the law and we fully support and respect that law and regulation in every jurisdiction without exception and without qualification to the best of our knowledge and ability. We can only tell you what we do and why we do it or have done it and we know nothing at all about the future or the future of stock prices of any company nor why they are what they are, now. The author retains all copyrights to his works in this blog and on this website. The Perpetual Bond®™ is a registered trademark and patented technology of The RiskWerk Company and RiskWerk Limited (“Company”) . The Canada Pension Bond®™ and The Medina Bond®™ are registered trademarks or trademarks of the Company as are the words and phrases “Alpha-smart”, “100% Capital Safety”, “100% Liquidity”, ”price of risk”, “risk price”, and the symbols “(B)”, “(N)” and N*.

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