Future of Canacol - Stocktrades Canada

I am wondering what the future of this company is. It seems relatively unaffected by the protests in Columbia. I own some shares. Not a big percentage of my portfolio but one of only a couple of interests in a foreign industry. It has had positive forward views but it seems a bit sketchy now. Good dividend with a good management team but in an unsure environment.
Any ideas?

Thanks,

Dave

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Asked on May 30, 2021 11:37 am

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Private answer

Hi there,

You pretty much summed it up - Canacol is trading at cheap valuations and thus far, the company looks to be on strong financial footing with a dividend that is well covered.

The reason for the cheap valuations is likely a result of the geopolitical uncertainty in Columbia. Many of its peers have seen operations impacted but CNE has come out and said that thus far, it has not been impacted. This is good news, but its also worth noting that can also change pretty quickly.

PXT for example, has had to pull guidance and it expects to be materially impacted. Time will tell, but the unrest does add a level of uncertainty here.

So, bottom line - good company, cheap valuations and a dividend that is well covered but political climate is weighing on the stock considerably. How that fits within your investment thesis will be up to your own risk tolerances.

Mat

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Posted by Mathieu Litalien

Answered on May 31, 2021 5:01 am

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