Thoughts on CIA.TO please?

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I’m currently holding CIA shares bought at 4,51$, less than 2% cheaper than its all-time high. As a constantly growing company – also with a potential of being bought in the near future- I saw it as a relative bargain, notwithstanding the recent dip it took (making me regret not to have waited a bit).

Could you please enlighten me with your feedback and advice on this?

Thanks!

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Asked on December 1, 2020 11:32 am
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Company's definitely seeing some strong growth over the past few years. It has a reasonable project pipeline as well.

Seeing strong growth in every single segment. Revenue, EBITDA, Net income, earnings per share. Company is also setting annual and quarterly production records as of late.

The company states that 52% of its sales are to China. There's a lot of controversy with China with a flock of countries right now. I don't see this is as a crazy significant risk, but it's definitely one an investor should be noting.

This is an iron ore pure-play. The price of iron ore has, to put it lightly, surged in 2020. So the company is undoubtedly going to benefit immensely, much like gold producers.

However it's important to understand that because the company is a pure iron ore play, when the price of the commodity goes down, we can expect significant volatility and underperformance. How the company sets itself up to survive these situations is key.

I'm not a massive fan of cyclical stocks. Just because they need to be monitored more extensively, and possibly sold off during bear commodity markets. But, the company is going to benefit immensely from high iron prices in the present, that's for sure.

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Posted by Dan Kent
Answered on December 1, 2020 1:19 pm