Earning Reports to Watch (Feb 04-08)
Consumer stocks such as Canada Goose, and Saputo, as well as many industrial and financial companies are reporting their earnings this week. Notable among them is the Brookfield names, BPY.UN-T and BEP.UN-T.
Here are the companies with earning reports to watch.
Andrew Peller (ADW.A-T) Feb 04
It was hit hard during the pandemic when restaurants were closed, but are recovering strongly. Recently, have faced higher freight and material costs. Despite those, margins are healthy. Consumers are returning to bars, restaurants and airports. He expects better results in coming quarters.
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.
A cash machine. Owned by Pernod-Ricard and pays a decent dividend. Occasionally, it pays a special dividend. Hard to know what the future is. A safe, defensive stock. Will Pernod buy it out and go private. It's fairly valued now. If you own, you could sell, but overall the stock is okay.
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.
Allan Tong’s Discover Picks GOOS has been beaten up, but it’s time for it to rise again as China reopens. Shares popped 3.5% Monday morning on the momentum from China (the TSX market rallied less than 1%). GOOS pays no dividend and its beta is 1.44, so there’s some risk. Shares trade at 33.36x PE…
Saputo Inc. (SAP-T) Feb 07
Recovered nicely. Good stock moving forward. Good story and long-term track record. You can buy at these levels, buy more if it goes lower.
Pleasantly surprised with the business fundamentals. Aspects of their business are growing. Very undemanding valuation. Continue to hold. It's on his watch list.
Yellow Media Inc (Y-T) Feb 07
(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.
Finning Int (FTT-T) Feb 05
Mining sector should have a better decade in the 2020s than the 2010s. A great Canadian company, again with benefit of the dividend tax credit.
Westjet Airlines (WJA-T) Feb 05
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.
ATS Automation (ATA-T) Feb 06
Not recession-tested yet. Earnings excellent quarter after quarter. Theme of reshoring is powerful and will benefit. Price to growth looks good. Only issue is recession or supply chain inflation. Better opportunities out there.
Which Brookfield to own? You have to evaluate each company separately. He owns BEP.UN and BIP.UN, as he finds those the most attractive long term. With those two, you tap into the Brookfield global, private equity expertise, with a focus on renewables and infrastructure. You have to analyze the risk/reward and see what's right for…
Toromont Industries (TIH-T) Feb 06
It's the time for industrials, from late January into early May. TIH could do well in February. The chart shows higher lows, which is good.
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. BBU.UN's Adjusted 2022 EBITDA increased by 3% to a record $2.3 billion and Adjusted Free Cash Flow increased to a record $3.40 per unit. EBITDA across operating segments including Business Services, Infrastructure, and Industrials improved compared to 2021. BBU.UN is now trading at 8x times annualized EBITDA. Weaker…
Heroux-Devtek Inc. (HRX-T) Feb 08
(A Top Pick Apr 20/21, Down 17%) Good space and good management team let you stick with it for the long term. Best days are still ahead. Once work for Airbus and Boeing comes back, cashflow will be massive.
First Cobalt (FCC-X) Feb 04
Cobalt is attractive but this is not a cheap producer, because they're in Canada and not Russia or Congo.
Domtar Corp. (UFS-T) Feb 05
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…
Canfor Corp (CFP-T) Feb 06
He sold all lumber stocks after the huge runup. But if he had to look at one, this would be it. Over $10 cash per share, with stock at $24, which means over 40% of company value is net cash. Lots of optionality. Intriguing.
Canfor Pulp Products (CFX-T) Feb 06
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Re: upcoming mil closures: The closing is expected by 1Q end, but costs may slip into Q2 depending on exact timing of layoffs. Other than severance, a lot of costs will be non-cash. CFX has about 1,300 employees, so close to 25% are being impacted.…
Nutrien Ltd. (NTR-T) Feb 06
(A Top Pick Jan 11/22, Up 22%) Fertilizer prices down (previous highs unsustainable). Has since sold shares. Better opportunities available in the market. CEO transition not going smoothly. Waiting for share prices to fall.
Interfor Corp (IFP-T) Feb 07
Lumber went on a moon shot in the first couple of months of Covid. Housing starts are rolling over. As lumber goes, so goes the stock. Buy when it's at a fraction of book value and the chart's collapsed. Not timely.
Russel Metals (RUS-T) Feb 07
Very cheap valuation right now. Cyclical company that will perform well as economy recovers. Strong balance sheet and financials. Soft landing in the economy will be great for business.
Goldmoney Inc (XAU-T) Feb 04
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…
BSM Technologies (GPS-T) Feb 05
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…
Vecima Networks Inc. (VCM-T) Feb 07
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.
SQI Diagnostics Inc. (SQD-X) Feb 04
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.
United Corps. (UNC-T) Feb 04
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.
Intact Financial (IFC-T) Feb 05
Prefers IFC in the space with its scale, breadth, and geographic diversification. P&C has been in the sweet spot.
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…
Allan Tong’s Discover Picks BPY.UN is anchored by diverse holdings across sectors, including industrial, retail and commercial properties, and across countries. Of course, we all know what happened next to the world, which wiped out the retail and office property markets. BYP.UN shares have slid around 7.5% since that call, but the 7% dividend has…
Great West Lifeco (GWO-T) Feb 07
Their business mix is different from its peers. GWO is a major part of Power Corp. GWO reports tomorrow. The street expects earnings to be down YOY, but analysts estimates are low, so there could be a beat. They pay an excellent dividend which is safe. Prefers SLF, MFC of Industrial Alliance.
CI Financial Corp (CIX-T) Feb 08
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Strategy of US expansion is risky, but we prefer it to staying in Canada. CEO is young, but we think the Board knows its strategy well. Recent acquisition may not work out, but we would rather the company try to move forward than simply bleed out with…
IGM Financial Inc. (IGM-T) Feb 08
(A Top Pick Dec 02/22, Down 1%) Effectively a call option on equity markets. Loves the yield of almost 6%. Big pullback in 2022, but now we're seeing higher highs and higher lows, which marks the start of a new uptrend. Attractive reward/risk. Equities are now on sale, great opportunity for long-term investors to pick…
Suncor Energy Inc (SU-T) Feb 05
It's cheap. Well-run and the dividend should rise. The Canadian oil patch is now reducing debt and buying back shares. Suncor ticks all the boxes. He prefers the integrateds, like Suncor.
Generally not a fan of the Chinese inter-listed companies. He has a Short position in this one. There are better places to be.
Mullen Group Ltd (MTL-T) Feb 06
Well-run and is more into transportation logistics in the last 5 years. Lacks the geographic footprint of TFII, and more regional. You can consider this, but prefers TFII.
A conglomerate and he isn’t a big fan of this model. A well-known catalyst investor has just purchased about 19%. May sell of some weaker units.
MEG Energy Corp (MEG-T) Feb 07
(A Top Pick Jan 28/22, Up 44%) If bullish on oil, very good name to buy. Strong leverage on oil price. Company trading at 33% free cash flow (privatize in 3 years). 35 years of reserves. Example of mis-pricing in energy shares. Expecting a double in share price.
Arc Resources Ltd (ARX-T) Feb 08
Share price off significantly, by about 25%. Huge amount of undeveloped land. They own their own infrastructure. Buy on the dip, especially under $15. Premier nat gas company to own. Upside on LNG Canada export. Yield is 4.03%, growing. (Analysts’ price target is $24.43)
Cameco Corporation (CCO-T) Feb 08
It's going to do well because uranium is going to do well. Interesting, because recent Westinghouse acquisition will smooth some of the volatility of uranium, gives them more of a consulting business.
Just Energy Group (JE-T) Feb 06
They sell energy contracts. They have under gone several management changes over the years. He is not a great fan of this business model.
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Reported revenue of $1.2B, up 9.6% and ahead of estimates ($1.03B). EBITDA was $461M, up 7% and short of estimates ($499M). The distribution was boosted 5.5%. Per unit cash flow rose to 35c from 33c. The year was a record and it has significant capital for expansion and multiple…
Valener Inc. (VNR-T) Feb 08
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.…
BCE Inc. (BCE-T) Feb 07
It has raised its dividend again with dividend growth being 3 to 5%. annually. Although growth has slowed for Canadian Telcos, BCE is one of the biggest providers of cell phones.
Use this list wisely to identify buying opportunities.
Happy trading !!!