Topic: Growth Stocks

Stock Pickers Digest Hotline – Friday, December 6, 2013

Article Excerpt

CHEMTRADE LOGISTICS INCOME FUND, $18.45, symbol CHE.UN on Toronto, jumped almost 9% this week after it agreed to buy specialty chemicals maker General Chemical Corp. for $860 million. General makes a wide range of chemicals, including aluminum sulphate, aluminum chlorohydrate and ferric sulphate (all of which are used in water treatment), as well as ingredients for prescription drugs, nutritional supplements and veterinary products. The company also sells and regenerates sulphuric acid. In addition to water treatment and pharmaceuticals, its markets include oil refining, pulp and paper, agriculture and food and beverage. This is a huge acquisition for Chemtrade: it would more than double its $756.4-million market cap. A major purchase like this can always backfire, but it will likely be a good fit, offering Chemtrade both growth prospects and diversification. As well, Chemtrade estimates that General will add 17% to its cash flow per unit. That will let the fund maintain its dividend, which currently gives its units a high 6.5%…