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Hi Guys, I’ve bought CWX back when you recommended it back in May for 3.2364 and we are flying high at 5.34 currently with a 65% increase. (Its in the portion of my portfolio that I’ve been using to take advantage for the Covid situation) Now that they are back to pre-0covid pricing, do you continue to recommend holding them the long term? (I know all of your recommendations are long position’s but I’m thinking I can at least move the profit into another undervalued company currently, so I’d like your opinion) Thanks again for all the great advice !
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Thank you so much for this question and its answer! On Friday I sat staring at my computer, contemplating a sell, but decided not to because of the news on renovations and low interest rates. (I did not know about the increase in house building, so thanks for that!) Also, this stock was on an uptrend before the COVID crash. I don't think it has been around $3.25 in a really long time, so we got it at a great price. The next earnings come out on July 30, so I'm staying in for that. I figure if it drops, I don't mind holding it for another couple of dividend cycles, even though they lowered it to $0.12. CWX has a price that seems to cycle up, pre exdividend date, so you could also take your money out then. I'm going to sell mine when I think it's peaked and use the cash to buy Telus. (Sorry, that's the remnants of the swing trader in me...ha ha.) Marked as spam
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Private answer
If someone came to me and told me they're going to sell of a portion of CWX to book profits, I wouldn't object at all. As of right now, this stock is trading at a premium to historical numbers. In fact, on a forward price to earnings basis, it's trading at more than double its 5 year historical average. However, with interest rates this low it will be very interesting how residential construction fares. On one hand, we have COVID-19 causing havoc on the economy, but on the other hand we have insanely low interest rates, which make spur new construction and home sales. This is a very interesting website, and will give you a little more insight on Canwel. https://www150.statcan.gc.ca/n1/en/subjects/Construction Building permits were up 20% in May, and if you go here https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=3410013501 You'll see data released for Q2 2020 shows that housing starts are on the rise. They're still lower than Q2 2019 of course but remember, the second quarter was peak COVID-19 lockdowns. Now that restrictions are easing, the third quarter may provide some insight as to whether or not housing construction is going to pick back up. Marked as spam
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