October 27, 2017
MCAN Mortgage Corporation . (MKP on TSX), Oct 27/17: $16.90, 52-week range: 17.33-13.10, market cap: C$400 million, div: C$1.48, yield: 8.76%
MCAN’s primary objective is to generate a reliable stream of income by investing its corporate funds in a portfolio of mortgages (including single family residential, residential construction, non-residential construction and commercial loans), as well as other types of financial investments, loans and real estate investments. MCAN issues term deposits eligible for Canada Deposit Insurance Corporation deposit insurance which are sourced through a network of independent financial agents. Corporate assets currently exceed C$1.2 billion. MCAN has raised its quarterly dividend four times over the last three years.
NAPEC Inc. (NPC on TSX)
Oct 27/17: C$1.31, 52-week range: 1.33-0.86
Market cap: C$136 million
NAPEC is a company operating in the energy sector. It is a provider of construction and maintenance services to the public utility and heavy industrial markets mainly in Quebec, Ontario and the eastern United States. NAPEC and its subsidiaries build and maintain electrical transmission and distribution systems, solar panel farms and natural gas networks. With 1200 employees the Corporation has two wholly-owned subsidiaries: Thirau, based in Canada and Riggs Distler & Company, based in the United States. Some of the more important contracts recently have taken place in the US such as a 31-mile dual circuit overhead transmission line spanning the Maryland –Virginia border and another being the construction of a 20 MW ground-mounted photovoltaic system in Southern New Jersey.
Nevsun Resources Ltd. (NSU on TSX and NYSE)
Oct. 27/17: C$2.95, 52-week range: 4.63-2.49
Market cap: C$894 million, div: C$0.05, Yield: 1.72%
Nevsun’s 60%-owned Bisha mine in Eritrea, East Africa has evolved from being a successful precious metal producer of gold and silver to that of a base-metal producer of copper and zinc. Now the company, under newer management, has decided to concentrate on its newly acquired Timok project in Serbia. In doing so the company will not be proceeding with expanding the open pit at Bisha, developing underground operations at both Bisha and Harena and will now approach exploration programs in Eritrea primarily on a long term basis. Sustaining capital of $24 million will come from cashflow from the Bisha operation for the acquisition of new heavy mining equipment. This decision taken during Q2 produced writing off the life-of-mine from 8 years to five. With the emphasis now on Timok, Nevsun announced on October 26, 2017 an updated Preliminary Economic Assessment (PEA) on the 100% controlled Upper Zone. This indicates a 15-year mine producing over 2.1 billion pounds of copper and 2.2 million ounces of gold. The report indicates that this operation represents an after tax Net Asset Value (NAV) of $1.5 billion at $3.00/lb Cu and calculated at an 8% discount to present day. This creates some interesting comparisons with the current market value of Nevsun stock currently at $0.9 million and taking into consideration the company’s 40% interest in the much larger Timok Lower Zone as well in the Bisha operation.
Savaria Corporation. (SIS on TSX)
Oct 27/17: C$15.70, 52-week range: 17.55-9.85
Market cap:C$646million, div:C$0.36, yield: 2.29%
Savaria designs, manufactures, distributes and installs accessibility equipment such as stairlifts, vertical and inclined wheelchair lifts as well as elevators for home and commercial use. Following a recent acquisition the company manufactures and markets pressure management products for the medical market, medical beds for the long –term care market including mattress overlays and foam pillows. Employing 800 people, the company has four manufacturing plants in Canada, one in Greenville, South Carolina and one in Huizhou, China. Management is calling for sales revenues of C$187 million and EBITDA of $30 million for 2017 and is predicting revenues of C$500 million by the end of 2021. Such an increase would involve at least one further acquisition in addition to organic growth.