I took a serious look at this company in December 2008 and January 2009, and I saw at the time that it met our criteria. This stock had been recommended to me by a client. However, there were bargains galore in 2008-2009, and when I built the Equities model in January 2009, I felt that other companies warranted my attention. After waiting patiently for seven years, the recent decline offered me a buying opportunity, with the stock having fallen from $53 to $39 early in the year.

Stella Jones (Toronto: SJ) operates in two key sectors in Canada and the U.S.: utility poles and railway ties. It also produces treated wood. These two sectors produce products which, to my mind, are essential to human life. I can’t imagine how we could do without electricity, cable or telephone poles. And what about wooden railway ties? These products have to be replaced regularly, and the company is the dominant player in these two industries in North America. The type of boring business that I like. Over the past five years, earnings growth has averaged 25%. The owners are strongly committed to the management, and Mr. Jones holds more than 30% of the shares via a holding company.


This post has been excerpted from a June 2016 letter of the Robitaille Group at Desjardins Securities.

Disclaimer: The results shown are before management fees. This data reflects past performance and is not indicative of future returns. This document may contain statistical data cited from third-party sources believed to be reliable, but Desjardins Securities does not represent that any such third-party statistical information is accurate or complete, and it should not be relied upon as such. Alain Robitaille is registered as a portfolio manager with self-regulating organizations. He is authorized under IIROC Rule 1300 to make investment decisions and to give advice on securities for managed accounts. With the exception of Alain Robitaille, no member of Groupe Alain Robitaille may exercise discretionary authority with respect to a client’s account or approve discretionary orders for a managed account, or participate in the formulation of investment decisions made on behalf of or advice given with regard to a managed account. Each Desjardins Securities advisor named on the front page of this document, or at the beginning of any subsection hereof, hereby certifies that the recommendations and opinions expressed herein accurately reflect such advisor’s personal views about the company and securities that are the subject of this document and all other companies and securities mentioned in this document that are covered by such advisor. It is possible that Desjardins Securities has previously published other opinions, including ones contrary to those expressed herein. Such opinions reflect the different points of view, assumptions and analysis methods of the advisors who authored them. Desjardins Wealth Management Securities is a trade name used by Desjardins Securities Inc. Desjardins Securities Inc. is a member of the Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Investor Protection Fund (CIPF).