Canam (CAM) Sold

Yesterday Canam was sold at $8.15 for a gain of 25 percent.  A significant increase in debt coupled with a change in management (and my sense of apparent shift in the company's culture) led me to take profits at this time.  Further, I have a concern that issues associated with the indebtedness of governments at all levels have yet to be resolved.  Many cash-strapped provincial, state and municipal governments are in survival mode.  

I am looking at potential infrastructure-related investments in growth areas of the U.S. but am cognizant that there is the potential for some infrastructure companies to enter unprofitable bids as order books slim down.  

Governments have a variety of options to address infrastructure renewal and maintenance:

• sell off assets to the private sector ... generally a losing proposition in the longer term ... but one which transfers a significant part of liability to the private sector (for a price to users)
• contract management to the private sector and let it take the heat for price increases ... for some reason the public is more willing to accept increases from "more efficient" operators than fat cat swivel servants 
• mothball facilities
• re-engineer facilities into lower maintenance ones e.g. some counties in the U.S. have changed some paved roads back to gravel.

As a result of this, I have decided to concentrate on infrastructure companies which provide services to the private sector, especially to the burgeoning rail industry and electricity distributors.  I have mentioned these in previous postings and editions of The Financial Passage Maker.