With a protracted trade dispute between Canada and the United States on the horizon, investors interested in picking up shares of Canadian firms on the cheap have been looking to key companies which have seen significant headwinds play into their valuations of late.
Canadian airplane and train manufacturer Bombardier, Inc. (TSX:BBD.B) for example, has seen its share price fall more than 21% from its 52-week peak on news that the U.S. Department of Commerce will be slapping a 219% duty on all its airplanes entering the U.S.
Similar rhertoric has been seen with softwood lumber producer Canfor Corporation (TSX:CFP), as similarly high duties (though not as ridiculously high as those imposed on Bombardier) have been slapped on all softwood lumber coming from the Canadian producer, in a bid to protect American jobs south of the border.
Or consider the rhetoric which has rung loud and clear for investors in companies such as Saputo Inc. (TSX:SAP) operating within Canada’s protected dairy industry; while shares of Saputo and Canfor remain stable and continue to climb higher, these potential headwinds have continued to push back the share prices of such companies, with the argument from a number of analysts being made that share price appreciation has been somewhat stunted due to these concerns.
While many in the media may believe that the risks are likely to be short-lived for such firms, and that in the long-run, Canadian ingenuity and commercial strength will allow the country and these companies to push through, I tend to believe that the market has not taken these risks at face value, largely believing the rhetoric that these trade threats are simply "bluffs" or negotiation tactics rather than the reality moving forward.
Invest wisely, my friends.
