Earning Reports to Watch (Feb 04-08)

Stores may or may not be impacted by Ontario government rolling out more retail locations. The Pellers stepped down from the board, possibly planning a bid to privatize the company but he's not really sure.

Has had a huge run and is not sure he would be courageous enough to get onboard at this point. Management has done a remarkable job of building this. He would look for a little lower entry point.

Ace Beverage acquisition got him interested. Some really nice growth coming, but not all segments are growing. So it's not going to give him the consistent 10-15% growth rate of a great company. Last quarter showed 9%.

He doesn’t know the seasonality on this, but the technicals show that it has been in an upward trend for quite a period of time. During the last little while, it has been in a trading range between around $19 and $22. It is not unusual for a lot of stocks in the consumer staples…

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Debt becoming a concern. Delivery and take-out only sources of sales. Special dividend paid this quarter. Dividend reinstated at a lower rate.

Good proxy for health of consumers in Canada. Luxury item that is discretionary. Hard to excited about this style of business. Not seeing major spending from average population. Better options for investors out there. 

Trade deal on dairy opens up next year. Has major operations in Europe, yet it's a Canadian company trading on the TSX. There are issues dealing with dairy and the commodity side of the business.Lots of pressure within Canada on protected costs around dairy products. Might be an easier place for our government to give…

Is fairly illiquid, but profitable and pays a 6.6% dividend. Price targets are high, so there's a runway ahead. But two-thirds of the business is concentrated in Canada, and a big risk is if song royalties rise. It's profitable though. He's watching it.

(A Top Pick Nov 22/18, Up 12%)Convertible 8% 2022 bonds He owned the Yellow senior bonds, but then moved into these convertibles. Most of their revenues are in digital, but that has struggled. New management has cut costs a lot until free cash flow now stands around $100 million this year. Their EBITDA margins are…

(A Top Pick Jul 27/17, Down 6%) Volatile. It's come down a lot, but there's a lot of upside ahead. Well-managed. They can make accretive acqusitions. Their problems integrating some businesses are behind them and they now have a strong runway ahead.

Repeatedly compares this to TIH, and TIH always comes out on top in terms of ROIC and dividend growth.

It’s under review by the government whether the takeover will take place. You’re dealing with regulatory uncertainty right now. If you bought it before the takeover, unless you’re in tune with what will happen, he wouldn’t own the stock any longer. The price is fair.

(A Top Pick Feb 27/23, Down 28%)Disappointing growth in EV equipment. Rolled over and he got stopped out. Wasn't making higher highs and higher lows, no longer in an uptrend. In your portfolio, you have to quickly carve out the ones that aren't working before they hurt you.

Just beat by 5%. Strong momentum in its segments. Inflation-linked revenues. Large organic pipeline, robust deal-making. Company's bullish about data growth. His estimates show it growing 11%, and trading at 10x. Fairly priced, nice compounder, dividend grows 6% annually. Yield is 5.4%.Good US assets, Brookfield management is innovative. Business operations are very strong long term,…

Reasonably well-tied to commercial construction. Fantastic job dealing with uncertainties. Likes the business and management team. A bit too big for him, as it's about to exit "SmallCapLand". If you own, decent time to add.

A way to participate in Brookfield's excellent track record of private-equity investments. Owns companies like the largest residential mortgage insurer in Canada, and one producing low-voltage automotive batteries globally. Big discount of ~30% to NAV. Yield is 1%. (Analysts’ price target is $45.46)

Very strong Canadian company that doesn't get enough attention from the markets. Last quarter starting to prove business prospects. Landing gear in very high demand within airline sector. Trading at discount to other names in the sector. Very high barriers to entry within the business. Margins continue to expand - will be good for cash…

Cobalt is attractive but this is not a cheap producer, because they're in Canada and not Russia or Congo.

This has been quite erratic and trading in quite a wide range. He’s been seeing contraction in breadth in forest companies, so is a little cautious on this area. If he had to focus in one space, it would be on lumber which looks attractive. You can use a basket of them through the ETF…

Homebuilding stocks in the US have been going straight up, but Canadian forestry stocks have been going the other way. WFG has done the best in holding its share price.IFP and CFP have really started to bottom on the charts. He hasn't done enough digging to know who has a better earnings profile. But looking…

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research CFX has been on a steady downtrend. Revenue has been in decline over the last two years, free cash flow has gone negative and it has been operating at a net loss since 2019. Debt has been increasing as well and net debt is now…

World's largest ag-crop nutrient business. Vertically integrated. Believes prices for its input commodities have bottomed, supported by high and rising cash-crop prices. Farmers have to replace nutrients in soil, which was delayed while prices were so high. Trades at book value. Bounced off lows, but still sees upside. In his dividend growers mandate. Yield is…

It has a higher level of production in the U.S. so would be less affected by tariffs than other Canadian lumber companies. The U.S. needs Canadian lumber and one quarter of production from B.C. goes to the U.S., -  but lumber is still needed for B.C.

It is in the metal fabrication business. They just raised their dividend this year and have dramatically changed their balance sheet for the better, so it is in much better shape than in past cycles. They also have a U.S. operation and have done a great job managing their working capital. Tariffs could hurt them…

He rarely talks about Gold. He thinks it is a strong sector bet. It is been out of favor for so long that mines have closed, productions have closed, mergers and acquisitions happened. Central Banks are now massive buyers of Gold. they want to get out of the US dollar. The Fed is not raising…

Uses their GPS system to figure out where trains are, and to more accurately schedule trains and service vehicles for people working on the rails. Reported on Aug 14 and earnings were down 10%. That was against a 32% increase in sales. In the coming quarter, earnings are expected to be down 75% year-over-year. Great…

It is a well run company. He got out of it. They paid out a lot of special dividends and the stock did well, but he got out because most of the catalysts are out of it.

(A Top Pick May 29/20, Up 55%) Oxygen delivery. Recurring revenue model. Very strong outlook.

They make life easier for large diagnostic test companies. It automates the testing process. They did a final financing. They've been working on this technology for 5 years.

Making changes to be able to invest more in foreign stocks. Wait to see how they do.

Share price on the path to recovery. Scores well on valuation, but held back by price momentum. Trades cheaply. Solid yield. Beat most recent quarter. Housing markets have been incredibly resilient. Could see himself as a buyer as they rotate into financials.

Earnings per share growth rate this year and next year is 18%. Wait for a pullback.

Owned it a few years ago and cut his losses. Now, cut your losses. This business is struggling as an asset manager, specifically to retain and attract new clients. Also, their key managers, including the CEO, have been leaving. They won't generate much in performance fees, which has been an attraction for investors in the…

Preferred shares. He does invest in some selective preferred shares for some clients with balanced mandates. Unique because BPY.UN used to be a separate, publicly traded company, so you got full transparency. But then Brookfield privatized it, so you don't get the same transparency. But Brookfield has always been a fairly good corporate citizen and…

He owns both this and Manulife. Rates going up have helped a lot. They are working on improving the U.S. side which wasn't going well. The Canadian side is doing well.

CIX vs. BAM Are very different asset managers. CI's balance sheet is not good. Prefers BAM, but shares have risen to a high valuation. Great managers and earnings stream (asset management fees).

Stockchase Research Editor: Michael O’Reilly With $144 billion in assets under management, we reiterate IGM as a TOP PICK.  Cash reserves are growing while shares are bought back.  It trades at 11x earnings, under 2x book and supports a respectable 12% ROE.  The robust dividend is backed by a payout ratio under 60% of cash…

Has done a great job of taking market focus off of Base Plant mine depletion down the road. It trades at a slight premium to Cenovus, which SU could buy, but he hopes not.

Generally not a fan of the Chinese inter-listed companies. He has a Short position in this one. There are better places to be.

Grown by acquisition quite steadily over the years. Very good company and it won't hurt you, but he owns TFII instead.

Has followed it a long time and should have bought it. They compound their capital extremely well. Management executes. A great business.

One of his largest holdings. It has sold off from tariff worries, just hitting a one-year low. They have 35 years of stay-flat inventory. Over 5 years, will grow production 25% while buying back half their shares as they pay a dividend. At $70, will trade at 4x cash flow and 13% free cash flow…

(A Top Pick Nov 25/24, Down 2%) (Note the short timeframe.)  Energy's been under a bit of pressure lately. Still nothing wrong with the chart. Could pull back a bit more, but the trend is up. Great company. Fundamentally, one of the best. 

Nuclear power is a way forward and there is a case for smaller nuclear power plants. He doesn't like cyclical stocks but Cameco is in a bit of a sweet spot. Lots of power will be needed for AI data centres.

They sell energy contracts. They have under gone several management changes over the years. He is not a great fan of this business model.

Brookfield is a very good manger and BEP contracts are with Microsoft. BEP is not only wind and solar power, but also hydro. They grow their dividend 5% per year. He is averaging down.

A lot of success is tied to Gaz Metro in Québec, but they also have some wind farms that have recently come online in the last year or 2, and giving good returns to the company. Recent earnings were solid and they raised the dividend by 3.7%, and plan to raise it 4% next year.…

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research The worst is likely over here, and we think a dividend cut would actually be well-received by investors at this point. We would regard it as a HOLD but could be accumulated (slowly) into any new weakness that develops. Unlock Premium - Try 5i Free