UnlockRatingOur PAST TOP PICK with UBS has triggered its stop at $31. To remain disciplined, we recommend covering the position at this time. When combined with our previous guidance, this will result in a net investment gain of 11%
UnlockRatingWe're finally waking up as a country. It's amazing to see everybody coming together and talking about working together. Dropping barriers, like crazy taxes, to move products from one province to another. Those make no economic sense. Dropping them will unleash a lot of GDP right there.
Great to hear the talk. He would like to see some action, which will probably come after the election. When it comes to Canadian infrastructure investment, there are some good companies out there and already trading at attractive multiples. And that's before accounting for any additional investments.
You really have to pick your spots. Have to make sure companies don't take on any fixed-price contract risk. Many have smartened up over the years and now structure contracts differently. Take a look at ARE. And ATRL, in consulting, is probably an even safer way to play in the space.
UnlockRatingWell, Cogeco has. It boasts an earnings yield of 30.6%, which places it in the top 10% among global peers, while its book value yield of 146.1% put it in the top 20%. True, its 5.91% dividend yield is smaller than its Canadian competitors, but is safe at a 42.5% payout ratio and growing 10% annually--twice as fast as the others--thanks to strong cash flow. Further, CCA trades at a 6.67x PE, compared to Telus' 30.2x, Rogers' 12.4x and BCE's 179x. Cash flow is one reason why CCA has outpaced its peers in the past year, with shares up nearly 15%, while the Big Three have lost ground, with Rogers and BCE both sinking 30%.
UnlockRatingDebt Can Kill a Company
Endo International PLC filed for bankruptcy protection this week. This is the company that took over Canada’s Paladin Labs Inc. about a decade ago. Endo shares are down 91 per cent this year. The problem? Very high debt. Endo has US$8 billion in debt after a large acquisition spree. Cash flow in the past 12 months? Just US$80 million. It paid US$560 million in interest charges in the past 12 months.
Cineworld Group PLC this week said it was “considering” bankruptcy. The stock is down 95 per cent in the past year. This company tried to take over Cineplex Inc. in 2020, with about the worst timing a company could have (just prior to the COVID-19 shutdown). It had about US$8.9 billion in debt at the end of fiscal 2021 including lease liabilities, more than 27x its 12-month cash flow. Bausch Health Cos. Inc., once Canada’s largest company, this week retained advisers to help “map out its future.” Its stock is down 81 per cent this year. It has US$22 billion in debt, and cash flow of less than US$700 million.
The lesson here: Debt can kill a company, sometimes quickly. Make sure the companies you own can service their debt. Times are not always great, and a company must be able to survive before it can prosper.
Unlock Premium - Try 5i Free
UnlockRatingEverything about this economy is good, except one thing: the president who is angry at everything except Putin (maybe him too) and his wrath has made investors so negative that they want nothing to do with stocks, sure that Trump will keep issuing tariffs that wipe out our wealth. April 2 could be liberation day when US investors are liberated if Trump gets his tariffs out of the way. Maybe.
Markets climb to a positive close
The trading week began on a sluggish note as markets mildly sold off in the morning, but rose throughout the day to post gains for Monday. In the back of everyone’s minds are Trumps next wave of tariffs, due to hit trading partners on April 2. The TSX outperformed most of its American peers by gaining 0.7% or 172 points. Except for slight weakness in tech, all the sectors rose, led by staples, discretionary and energy.
Major movers: Restaurant Brands International jumped 3.81%, Torex Gold 3.78%, North West Company 3.54%, K92 Mining 3.5% and Empire 3.47%. Gold continued its record run by climbing another US$38 to US$3,123, while WTI leapt 2.85% to US$71.35.
In New York, the Nasdaq slipped 0.14%, but the S&P advanced 0.55% and the Dow 1%. Key names included Warner Bros. Discovery rallying 3.47%, Live Nation 4.44%, Moderna -8.9%, Lululemon -3.41% and Discover Financial 7.54%. The U.S. 10-year yield slipped to 4.2139%, but Bitcoin edged slipped by -0.23% to US$82,720.
🍱 Restaurant Brands International (QSR-T) +3.81%
🥇 Torex Gold Resources (TXG-T) +3.78%
🛍 North West Company (NWC-T) +3.54%
⛏ K92 Mining Inc (KNT-T) +3.5%
🛒 Empire Company (A) (EMP.A-T) +3.47%
📺 Warner Bros. Discovery (WBD-Q) +3.47%
🎞 Live Nation Entertainment Inc. (LYV-N) +4.44%
💉 Moderna (MRNA-Q) -8.9%
🛍 LuLulemon Athletica (US) (LULU-Q) -3.41%
🏛 Discover Financial Services LLC (DFS-N) +7.54%
🅱 Bitcoin (BTCUSD) (CRYPTO:BTC) -0.23%
UnlockRatingAs a stock picker, it's really important to get the top-down correct, and then do your bottom-up research. Looking across the sectors, if you're thinking bullish and recession, you want to think defensive. Grocery-anchored shopping centres across Canada are very defensive. Seniors housing is enjoying secular tailwinds, where demand is far going to outpace any new supply.
Shy away from office space, which has a secular headwind with high vacancies. Doesn't expect any rent uplifts in that space anytime soon.
Most Anticipated Earnings: GSP-X, ESK-X and more Canadian Companies Reporting Earnings this Week (Mar 31-Apr 01)
Here are the Canadian companies listed on Stockchase who are reporting earnings this week: 🚚 Industrials 🛢 Basic Materials 🛍 Consumer 🏛 Financials ⚡ Energy 👨⚕️ Healthcare 💻 Technology Use this list wisely to identify buying opportunities. Happy trading… read more