Shopify Inc., Telus Corp and More at 52-week Highs and Lows (Archive From Feb 05-11)
Monday saw the TSX largely rebounded as oil prices recovered. The index also so some large sell-offs for cannabis producers Aurora Cannabis and Canopy Growth Co.
This week, consumer stocks Shopify Inc. (SHOP-T) and Aritzia Inc. (ATZ-T) are once again on the 52-week high list. The financial sector, including REITs have been performing with Brookfield Asset Management (A) (BAM.A-T), Intact Financial (IFC-T) and RioCan Real Estate Investment (REI.UN-T) hitting 52-week highs. Utilities have also been rising with Canadian Utilities (CU-T) and Transalta Corp (TA-T) climbing higher. Names returning to this list from last week include Jamieson Wellness (JWEL-T), Enghouse Systems (ENGH-T) and Telus Corp (T-T).
Stocks trading at 52-week lows this week include D-Box Technologies (DBO-T) who reports this week, as well as Acasti Pharma (ACST-X). Husky Energy (HSE-T) is also trailing.
Here’s this week’s 52-week high and low list:
Here’s this week’s 52-week high stocks on Stockchase…
He has recommended the stock. It has been a poor performer over the last few years. They released more positive earnings recently, rocketed to $14 and then pulled back to $12. Their acquisition in the US went quite poorly and the management team was discarded a year ago. It is a show me story for…
(A Top Pick Feb 26/19, Up 53%) One of his favourite stocks. Most of the stock movement has happened in the last 3 months after they released their report. It's been mostly multiple expansion; you haven't seen earnings move up. 12 months ago it was a cheap stock, and is now appropriately priced. They can…
It is miss-understood. They are working on selling the soda business for a water and coffee focus. A lot of this is baked in at current prices unless they announce a large acquisition. He has not seen the upside here. He finds better opportunities elsewhere.
BRP INC. (DOO-T) TSE
He likes the price momentum and the fact they bought back a large number of shares. With strong employment and wage growth, they will do well in the consumer discretionary spending space. There are few competitors in the space. Yield 0.67% (Analysts’ price target is $63.04)
It pulled back. Now we are seeing a re-acceleration in their earnings, and multiple growth. (Analysts’ price target is $100.29)
A hard one to call. Based on valuation it is at nose bleed levels; however, they are still growing the business and are one of the biggest employers of tech in Canada. It is hard to see a huge plunge for them. They should be able to continue the momentum.
A successful previous Top Pick. A big company with a 22% ROE and a $52 billion marketcap. Yield 0.55% (Analysts’ price target is $48.54)
He likes this higher yielding royalty trust. They have made new investments that are improving the payout ratio. The valuation is good value. It is like a private equity company that collects royalties. There is some concentration risk, so it is not risk free. Yield 8% (Analysts’ price target is $23.26)
If you've held it for the last couple of years, maybe it's not a bad time to take some profits. For him, cashflow is what is important for him. It is one of the core holdings for his portfolio at 5%. Infrastructure and REITs are well-hedged for any interest rate disruptions.
(A Top Pick Nov 28/18, Up 16%) Genworth and Westinghouse have been great investments for them. They're great capital allocators. Still likes it at current prices.
A large company in commercial real estate. Barely pays a dividend, but offers an 11% free cash flow yield that's and growing 91% YOY. It trades at 8x trailing cash flow and boasts a big 25% return on capital in Q4. Earnings to grow 11% in 2020. (Analysts’ price target is $107.83)
It's cheap and a pretty well run business, but the mutual fund business is not as good as it was 10-15 years ago. Fees in the financial services sector are under pressure. The long term challenges in the industry would keep him away from the stock.
They have been doing quite well with a nice yield. It's not too expensive. It could raise its payout quite a bit, and they are largely in Quebec. The province looks in good shape with a clean balance sheet.
Dividend 15 Split Corp. (DFN-T) or Dividend 15 Split Corp. II (DF-T)? Both are Split shares. The preferred share is the low risk preferred share dividend. He wouldn’t buy both, because you are looking for either growth or income. He would use one or the other and build that in your portfolio.
It is a split share financial corp. It has a big distribution. There was volatility in three periods from 2011. You have to be mindful of the volatility. There is some leverage involved and downside risk in times of market volatility. He would avoid this at the moment.
A leasing company run by Steve Hudson. They did a $265 share buyback late last year, then in February doubled their dividend. Low interest rates will help them. It took a while, but the stock is moving up these days. (Analysts’ price target is $5.39)
It's a preferred share ETF. It provides income. It's a hybrid between a stock and a bond. This gives you a good position in a Canadian taxable account.
Likes it a lot and recommended it a few weeks ago as yields have been bottoming and flattening out. Yields will rise long-term, he predict, which will benefit lifecos like this. GWO broke its downtrend at end-2018, rose, hit a second bottom (a double-bottom) and is now accelerating higher.
(A Top Pick Oct 26/18, Up 37%) It was defensive at the time. Markets were falling. Even at these levels, it's trading at 15x and growing at 15%. On a price to growth basis, still a good opportunity in a fragmented market.
Very focused. Have positions in 4 life insurers and they are running a covered call program against the existing long positions. Going to have volatility given its exposure.
A mortgage insurer. The company is well run. They have done a good job at being conservative on their assumptions and he feels they have been attracting higher quality borrowers.
They do benefit plans and pension plan management. They expanded in the US. He thinks there is going to be slow steady grow. Low risk, high quality investment. Solid.
(A Top Pick Feb 12/19, Up 32%) Scotiabank just announced a $13.75 target. Managers own about 10% of shares. There's good industrial rent growth in Toronto and Montreal. Vacancy rates are rock-bottom low.
What's the breakout point and how do you know where and when it is? It's been range-bound for three years, bottoming about $9.50 and topping at $12. Now, we're at the top. Look for the chart to move higher (with good volume) to confirm this move up. This is significant, because four times before it…
Bond-like, they're very good at mezzanine and commercial lending. They distribute what they get and are conservatively balanced (balance sheet). They know their markets. It's like a mortgage-lending situation. They earn 7% rates of return, no more or less. A very stable investment, acting like a bond proxy. (Analysts’ price target is $9.96)
TMX Group (X-T) TSE
They have a temporary CEO. The company is in the middle of transforming its business to add data and information technology. The stock has done well and it was one of the best performers in 2019. The balance sheet is good. He expects better things in 2020.
He is a big fan of this company and likes their management team. Their own risk management tolerance is low. A lot of buildings in Toronto and Vancouver, but they also hold office space in tight markets. They find older buildings and turn into nice new spaces. The balance sheet is healthy.
This has done so well as the majority are rental properties mostly in Toronto, where the market is so tight. They have been able to increase rents. The valuation is high now, trading at 28 times free cash flow. They also have exposure in the Netherlands. The asset class is so desirable right now. Maybe…
Doesn't like these split-stocks. Why are these ETFs paying a higher yield than the stocks they hold? That's a red flag. One reason is leverage. Sure, you get a nice return, but no price movement. These are very complicated. Doesn't like them.
The management team has done a fantastic job over time. People were concerned how long they could pay out their dividend and people worried about how diversified their royalty streams were. Now they invested in Oxford Learning for diversification. Their dividend payout is now below 100%. (Analysts’ price target is $4.29)
They had changed some key management positions, which has cleaned the company up along with the balance sheet over the past couple of quarters. It trades at about 12 times earnings and earnings are growing by 20% next year. It is also a play on Amazon as there are rumours they will provide more fleet…
Missed last quarter's earnings and down 15-20%. This quarter was great, and now it's making new highs. Great Canadian company, lots of free cash flow, asset light. Tuck in acquisitions and grow organically. Good growth coming along. They'll do well over the next little while.
They buy conventional e-commerce centres in Europe and the States. They carry only 25% debt-to-cap, which is low vs. peers. They find value in Europe and get great returns.
Over the last year you have seen a significant growth. It is on his radar screen. The securities side and the banking side are both doing well. He would be interested if it pulled back.
The family of companies are well run. There are headwinds investing in a mutual fund business. It rallied back recently and pays a decent dividend. The dividend is safe.
Loves this. They're in Ottawa, Montreal, and the GTA, benefiting from strong population growth. They buy undermanaged apartments, invest capital and fix them up. So, they can increase rents. They've done this for a long time. A darling that he's long owned. They're developing land with Brookfield around Burlington.
Rental apartments are a great space, but NVU suffers from poor governance and low-quality real estate. There are way better names elsewhere--like CAP REIT or Killam.
RY vs TD vs SLF? He owns both of the banks and he prefers this space over the insurance sector. RY has a stronger approach on the wealth management side, whereas TD focuses on retail customers and has a larger presence in the US. Right now he would favour TD. Canadian banks of been held…
He would avoid this one. Office space is difficult to re-tenant. They have an external management structure for their assets, which does not necessarily leave great alignment.
Dream Office vs. Dream Industrial Never a fan of Dream Office, which had a lot of Alberta exposure. He prefers the industrial side, which has performed better and faces little competition; there are only 3-4 industrial REITs in Canada. Hold both, don't buy or sell.
Has done very well. Quality asset. Urban development mostly in Ottawa, Toronto, Montreal, with a bit in Alberta. Still has a relationship with Mutual Group, and so has access to more quality assets. Great REIT. Crushed Q2 earnings. Underpromise and overdeliver.
As the stock has not dropped 33% in the last year and have 100% upside, he is not interested as a Contrarian.
Owned this for 6 years, but couldn't understand why the 8.2% yield was so high. If there's a bump (a bad earnings report), he worries what would protect this. He means 120% in over-distributing. Great properties in eastern Ontario and Quebec, but it's hard for them to grow.
Smaller cap, alternative mix. Trades at significant discount to NAV. Lots of opportunity. Buying back shares. Great opportunity, solid yield.
A US or European REIT like CAP REIT Europe: ERE.UN (already discussed on this show) fits the bill. For the U.S.: BSR REIT, KW-N or COLD-T.
Debt? The did a secondary issue, which was to go towards debt reduction. This has reduced debt to 55%. They focus on medical facilities and parking and it is very stable. They have expanded into Germany. The structure is clean and easy to understand. He does not own it at this valuation. He wants to…
A hot business in the US and Canada for fulfillment centres. Good partners. Stick with it. Smaller and cheaper than comparable US companies.
A hold. A tiny REIT with a yield that is too high to sustain. They did a portfolio acquisition of retail mall space in Quebec -- the wrong asset at the wrong time.
He likes it. They had a fantastic year. They announced the succession plan for the CEO. The stock price has run up. He does not see so much upside over the near term. Going forward he thinks there is not so much in catalysts but over the long term it will have tremendous rate-based growth.
He's owned this for 10 years, on and off. BLX is a big beneficiary in ESG as investors divest in oil and buy renewables. BLX is big in wind and hydro power. They have a yield of 2.09% with a lot of capital reinvested to grow the company. (Analysts’ price target is $27.94)
He likes to buy stocks that are in an uptrend and a good valuation. CPX is a stable business, but at 10 times EBITDA and 22 times earnings it is too expensive. The payout ratio and yield are pretty reasonable, but it carries a fairly high level of debt. Yield 6.22%
Has a $12 price target. Brookfield owns a portion and will buy more. Its ESG score has risen. It's a turnaround story and underowned. Good for renewable exposure. (Analysts’ price target is $10.97)
Owns 42% of Canadian Utilities. A safe place with good dividends. He bought it at $43 a month ago. A good track record for raising the dividend. Not a well known player in the space, but a safe way to get back into energy. Yield 3.39% (Analysts’ price target is $51.83)
70% of their cash flow is from take or pay contracts. It does not matter what the economy is doing. A great defensive quality. Yield 3.71% (Analysts’ price target is $72.06)
CU recently sold off a lot of its electricity-generating assets, so still good? He'd rather shift to an Enbridge or Altagas. Electricity generation is low-growth and heavily regulated. Long-term utility rates won't move much and inflation will kick back in.
Hydro One (H-T) TSE
He buys utilities to generate income. Yes, they are boring, but this sector has had an incredible run in the last 12 months. This is overbought now and would take profits. Also, the yield has dropped to 3.3%, which is a negative.
It has been on fire this year (up 30%). Hydro Quebec is buying 10% of the stock. He would stay on the sidelines since it has rallied just based on a strategic alliance with Hydro Quebec.
(A Top Pick Oct 24/19, Up 19%) This is a renewable power company. Since October they had a good Q3 print. They reaffirmed guidance. They are buying back shares.
It is a great company. They are better positioned now. It is about a 5% yield increasing at high single digits. It is an asset drop down model and he prefers companies that develop assets from the ground up.
(A Top Pick Aug 26/19, Down 13%) Green power generator. A great story. Added power projects last year. Stock is dirt cheap. Wildly undervalued, lots of upside. Yield is over 6%.
CAE Inc (CAE-T) TSE
(A Top Pick Mar 29/19, Up 30%) He still likes the name. They are into civil defense and aviation simulators. And they have good tailwinds behind them still. Pilots and their training are in high demand. Their five year dividend growth rate is about 10%.
He likes the company. However, if you stumble at these valuations the market will punish you. When they reported earnings this week it was impacted negatively. As there is a move towards one-day shipping, they are well positioned. There is no threat of Amazon coming to Canada to take them on directly -- they actually…
It's a recession call or non-recession call. If you expect the latter, then CN has room to run up to $140-150. If you're the former, then avoid this. CN is not recession-proof. He likes CN at this levels and expects it to grind higher at least into the summer. CN is a cyclical stock.
(A Top Pick Jun 27/19, Up 18%) Kansas City Southern and CP have both come out of multi-year consolidations and will benefit from a stronger economy and pick-up in trade.
He likes it--slower growth, higher yield, something to hold onto for the long term. Its valuation is lower than its peers. Its debt is lower than ENB-T's. The dividend pays over 6%. Not flashy and it's boring, but you want something safe like this. Oil itself swings to extremes though millennials and ESG will stay…
(A Top Pick Dec 16/19, Up 7%) Tremendous growth potential, an income pick with a strong dividend. His buy price is just under $50.
When looking at numbers, it's historical. This company has been in turnaround since they had to sell part of their water business acquisition in the UK. The stock went up last quarter due to the turnover. They have 9% return on capital which is starting to show growth. Dividend growth is starting to come up…
(A Top Pick Apr 01/19, Up 19%) A commodity space but it is well managed. The management team has been there since 20 years. They have owned it since the acquisition of Progressive Waste Connections. They are great at acquisitions and they convert cashflow to free cashflows. It has had 17 years of positive shareholder…
In the construction space his favorite is WSP Global. SOX is similar and he thinks they may be a value trap as there is some concerns about the dividend, the strength of the balance sheet and their ties to the energy sector.
Enbridge (ENB-T) TSE
(A Top Pick Apr 16/19, Up 18%) He likes Enbridge, and most pipelines and utilities. Anything with solid infrastructure will have earnings and will pass through inflationary costs. He's never questioned the dividends. A solid company.
Not a long-term hold. Near-term is okay. It's quasi-cyclical. If housing dips...oh boy. He owned this 30 years ago. A good operator with good product, but the macro environment is not good. If a recession comes, sell. Hold.
Core holding. Trades at 18x earnings. 5-6% in both earnings and dividend growth. 30B worth of projects being built, and another 20B to come. Yield is 4.26%. (Analysts’ price target is $73.85)
Concept stock. Provides equipment for big energy users to be able to use the waste energy and cut energy costs. Somewhat risky. Opportunities are huge. Just signed a $20 million contract a month or two ago.
The company uses cement and air to create an insulator used under roadway. Instead of using piles, you can put down a base much quicker. The company expects sales to grow by 50% and there is a sales backlog of $40 million. Overall, the company should almost be recession resistant as their product is used…
An interesting company that fits with the green theme. They are growing revenues sharply. They manufacture renewal gas equipment for sale to other companies. They are expecting 80% revenue growth this year, but that drops to 30% the following year. This makes the valuation difficult to access. He would be a hold for now.
He does not own this one, despite the earnings metrics looking solid and there is no net debt. They missed on a recent quarterly earning, but not a bid deal. They are trading at 7 times cash flow and 7 times EBITDA. He would like to see the ROE improve a bit. Price momentum has…
A fine IPO performer; they did a good job to ensure that private equity fund involved got cleaned out, so that overhang didn't happen. They just put out a strong report with good international growth. This may be added to an index. Not a cheap stock, but they boast earnings growth and a strong brand.…
They develop non-addictive pain medication drugs through the trial process. They trade at 17 times trailing sales -- a bit expensive. He thinks they are about to go into a good revenue growth phase. He would be a hold at this valuation. A slip up at this point could lead to a sizable pullback. The…
Don't get scared of parabolic moves. The chart looks very good. It has shot up in the last 6 weeks. Its next move could be just under $6 pretty quickly. Relative strength vs. the S&P looks very good. However, expect volatility. Own a small holding.
He's long owned them. Their business of taking care of all the shipping paperwork (logistics) for a business is spot on. Their long-term return has been fantastic and they have a long way to go still. They benefit from the chaos in trading now (i.e. Trump's tariffs).
Is among good Canadian tech stocks or else buy XIT ETF. KXS has been volatile, but lately has been improving. Its November move upwards was good. Stick with it, if you already own.
The Uber of real estate transactions. They connect lenders, lawyers and realtors together. The more value you can bring to these groups the more they can charge. Lots of runway for revenues going forward. Yield 0% (Analysts’ price target is $16.00)
(A Top Pick Oct 18/19, Up 4%) Investors are appreciating the steady cash flow. Some day they will be an acquisition target. They have a great niche in the market. They have the ability to grow, although it is not a giant market.
🛢 Basic Materials
This was a great performer in 2017-18, but with housing starts--and the economy--slowing in the U.S., it's under pressure. Tariffs to lumber didn't help. The yield pays over 5%, but in this late part of the cycle, OCB is likley not covering the dividend every quarter. They should trim the dividend. He prefers WEF for…
Gold Gold is a natural hedge to bad news. It's possible for gold to make new highs. He owns FNV-T, but they are a royalty firm, not a producer. His clients own 3-5% actual gold in their portfolios which is a reasonable hedge. Higher than that, he does not advise.
This now has a project in Mongolia which has epithermal veins, which he loves. When you do find them and they carry great grades, it can grow really fast. This has a 50 g/meter width quite prominent with something like 16% which gets him excited. Still very early stage.
Very speculative. It's a long-term lithium play. We will still buy e-cars, even though today's data showed a one-month drop in sales. LAC is another way to green your portfolio, like NFI-T. E-cars will be normal in 20 years. (Analysts’ price target is $12.68)
Telus Corp (T-T) TSE
Significant equity offering. Will have lots of 5G spending in next 3-4 years. Dividend is safe. Will continue to increase dividend, though dividend growth is slowing as with all telecoms. Yield is 4.5%.
They produce medium crude in Trinidad. They have drilled 2 exploratory wells recently -- one produced natural gas and receives about $2.95 per mcf. The second well had a very high pressure rating, which caused the stock price to spike -- doubling in two months. He wants to wait to see results from the second…
👨💼 Professional Services
The London Stock Exchange has been interested in acquiring them, which he thinks would be positive. He would consider holding for now and decide if holding shares in the Exchange makes sense in the long run.
Here’s this week’s 52-week lows stocks on Stockchase…
It is getting pounded by tax loss selling. They have very valuable IP and a good installed base. It is worth more than it is trading for and he is urging the board to unlock some of that value.
Spot Coffee (SPP-X) TSXV
A micro-cap. He holds debt securities and have been collecting those coupons. SPP is interesting, but highly speculative. They run little coffee shops. The coffee and food are really good. He wouldn't buy it for that reason, but it's okay in a portfolio.
Doesn't know this company. Loves the space. Names with a good name, like "green" move well. They produce organic foods, and people are looking to eat healthier. Fancy name. Fancy products.
Cannabis Nutritional supplements. If they get it right there is huge potential. In the medical uses, there is a lot of long term potential. He has no idea who will be the eventual winners in this space. He thinks there is a bit of frenzy in this space. Buy on rumor and sell on news.
He is always very suspicious of a company with all of its assets in the US that lists on a Canadian exchange. Medical facilities in the US are a different market from the Canadian one. We've seen similar companies in the US where it didn't end well.
They are working on testing a drug to use krill oil to help other drugs in the fight against cholesterol. Some recent research has been unclear among testers -- another test coming out in four months. He owns this personally.
🛢 Basic Materials
The deep cyclical are the place you want to put some money. It is so beaten down. It could fall another 50% but once we get CoVid19 under control, these deep cyclicals could have 300-500% gains. This is where the value is in this market but you need patience. He has never seen an opportunity…
He's learning as much as he can about this stock. He's nervous about little markets with great, big technogical promise. This could be a good market performer this year. Perhaps own this for the long-term, but knuckle down and learn what this company does with aluminum alloy technology.
Their project near the coast of Nunavut has run into issues with the metallurgy. The process they've used hasn't worked. Until they turn this around, the deposit is in trouble.
Effected by the coronavirus? The coronavirus has effected the entire space, but HBM has fallen since late-2017 with two spikes up in its chart. In the last six months, it's fallen further to $3.60 with support at this level. Base metals pick up in March (seasonality), though. HBM must tournaround or it will fall below…
NexGen vs. Fission He owns both Fission and NexGen. They're far from infrastructure in the Athabasca Basin and would be challenged if it wasn't for their deposits being large and of quality (and next to each other). They could get built as a pair. The Fission deposit is borderline-tier one deposit, whole Nexgen's is. The…
In the military services type industry. He used to own this. They just signed a contract and the stock price jumped. If that contract pans out, then the stock is going higher for sure. You want to make sure that it is real. Sometimes companies announce agreements and they are not as great as they…
Very volatile because it has fresh production in their numbers. Likes their exploration focus. They have the expertise. Good one to own but it is lumpy. It’s a move on news stock. Actively drilling now so there should be news every 6 weeks. Last on the 16’th.
They had some problems with some pumps that reduced production. The problems have been resolved and sees them generating $0.97 cents in cash flow this year. He expects to see them pay down debt and the stock is very cheap presently. His target price is $5.50. Yield 0% (Analysts’ price target is $2.41)
A long term holding for him. Now is not the time sell. The oil patch has struggled as a whole. They have the flexibility to stop drilling when economics are poor. The stock is cheap here and they have had good drill results recently. At this small market cap (under $100 million) it is not…
Shale gas in the US. A spin out from Bankers Petroleum (BNK-T). There is a lot of potential excitement but it just doesn't have the same management quality team. Just too risky in the market at this point.
The problem with this sector is divestment by pensions, for example, though Husky is in the top tier of companies.
He owns it in some of his portfolios. They were vegetable growers in the past. Their costs are down fairly low. He is waiting to see what they will do in the next quarter. Their sales price should increase as they sell more directly than in the past. Their low cost production will become more…
Competition from Teck? Teck has announced it will potentially be increasing shipments in competition against them. This has moved the valuations right to the top of his list of buy prospects. It trades at 8 times earnings. A cheap cyclical stock with a low dividend payout ratio. Most of their coal them move is for…
WeedMD Inc (WMD-X) TSXV
He has been looking at this as it has become more attractive now. A mid-tier producer that has stagnated when a partnership did not materialize. They are involved in the specialty pharmacy business which could grow into the mainstream in the future. They could be bought out in the future.
This company has a lot of scientific research to support the health care aspects of cannabis. They also have extensive experience in low cost farming economics as part of their partnership with Village Farms (VFF-T).
Enwave (ENW-X) TSXV
He owned the stock years ago. They dry things like food. They are now getting into the marijuana space. It has done very well lately but if they are going to get meaningful contracts, they are going to do well.
Use this list wisely to identify buying opportunities.
Happy trading !!!