Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

Hi Lou,

I would ask you about the prospects of Russel Metals.

Thanks,

Glenn

-----------------------

Hey Glenn,

Thanks for the assignment. This will be the third time since 2012 that I investigate the case for Russel Metals Inc. (RUS TSX). The last was on July 15, 2015 for Norman. The shares were trading for $22.07 with a dividend yield of 6.89%. Norman thought the low dollar provided the company with an advantage and wondered if RUS was a good investment.

The analysis conducted on his behalf indicated that the stock had been selling off since August of 2014 where a double top pointed to a trend reversal from the advance that started in late June of 2013 when RUS was trading near $21.00. But the high near $37.68 was as good as it got.

The MACD and the RSI generated sell signals followed by the shares breaking below the 50-day moving average in September of 2014 and then by a breach of the 200-day moving average in November. When a death cross formed in December of 2014, it alerted the knowledgeable investor that they could expect additional selling pressure.

It was advised in July of 2015 that resistance could be expected at $23.50 and that Norman would be best served by being patient. Retrospectively, that was the right call as RUS pulled back to a 52-week low of $18.23.

Another inspection of the charts will inform my opinion.

Desktop users click on image to enlarge

The three-year charts indicates that the downtrend that started last year is still in place and that the stock hasn't been able to break above the trend line with conviction. There have been some trading opportunities over the last year, but the buy and hold investor had to be satisfied with the dividend which as of this post yields 7.45%.

Desktop users click on image to enlarge

The six-month chart provides a close-up of the buy signals generated by the MACD and the RSI as the stock came off the July lows. The advance hit resistance along the 200-day moving average in October. Currently the shares are holding support near $20.00 but there is little evidence that we can expect a new leg up in the short term.

Next time I will re-examine the charts for New Flyer Industries Inc. (NFI TSX) on an assignment from Kim.

Make it a profitable day and happy capitalism!

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

Latest Videos

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies