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
The price has dropped substantially because of slowed growth and problems like supply chain issues. However there should be more retail distribution opportunities for the wine industry. Also there may be financial programs that will help as well. Margins should improve and he feels there are better days ahead.Editor's Note: The caller was also asking…
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.
Consumer discretionary spending is challenged, especially out of China. A pivot in interest rates would change his tune.
Saputo Inc. (SAP-T) Feb 07
Seasonality a factor in this stock - performs better in the summer. Large brand with excellent product selection. Expecting share price to go higher. Would recommend holding. $35 share price seems reasonable.
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.
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
Stockchase Research Editor: Michael O'Reilly With a five year average annual earnings growth of 23%, we reiterate FTT as a TOP PICK. Upcoming earnings will likely confirm continuation of this trend. It trades at 10x earnings, 2.3x book and supports a 22% ROE. We like that cash reserves are growing while debt and shares are…
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
AI is a really hot theme that's being chased. Operating fundamentals not as strong as he would have thought, in terms of profit margins, ROC and free cashflow. Avoid. Better businesses out there. Better way to play is through chips or sensors, such as TSM or TEL.
Inexpensive valuation at 9x FFO. Unique operating capability, because affiliation with BN lets them do counter-cyclical acquisitions. Access to capital for acquisitions last year when times were tough, reap benefits for years to come. A must-hold for both income and growth investors, for a nice total return. Yield is 5.4%. (Analysts’ price target is $51.75)
Toromont Industries (TIH-T) Feb 06
It's been stuck in consolidation for 3 years, failing to break above $110 a few times. If it falls back to $100, it could be worth a trade. Otherwise, he's cool towards it.
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research We note BBU has been (highly) cash flow positive for the past four years, and as noted book value is much higher than the current price. It is 'only' down 15% this year, and many have fared much worse. Its debt level ($44B net) no…
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
Very cyclical. Higher rates have meant lower housing starts. She doesn't play in the pure-play commodity space too much, more trading vehicles than long-term holds.
Canfor Pulp Products (CFX-T) Feb 06
A name to consider over the next 3-5 years. Overall, an interesting place to be looking, though stocks have been hit so much since the pandemic heyday. Governments are pushing new home builds, and that should help prop up the market. The renovation market will be impeded by people's ability to spend.
Nutrien Ltd. (NTR-T) Feb 06
Technical chart shows a falling price with lower lows, lower highs. Below 200-day MA. Soft commodity prices. Volatile on demand and pricing. Avoid for now. Long-term, less land so productivity per acre will matter.
Interfor Corp (IFP-T) Feb 07
Demand for lumber will continue to increase.Short term weakness in housing (recession) not a concern for long term investors.Expecting performance for long term investors.
Russel Metals (RUS-T) Feb 07
It is well positioned for an increase in demand for infrastructure spending. In answer to the caller's question, don't switch it for an energy stock.
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
Great name to have in a portfolio, great capital builder. Solid underwriting, solid investment income. ROE above 12% on last report. Reasonable 15x, with 17% growth rate. He likes to get things at a bit of a discount, so try for $200-202.
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
GWO vs. POW vs. IGM His best guess is that GWO might be the best performer of the 3. Not particularly liquid, but shouldn't be an issue for the retail investor. Insurance companies tend to do well in a rising rate environment, because it tends to discount their liabilities to a degree.
CI Financial Corp (CIX-T) Feb 08
(A Top Pick Jun 13/23, Down 10.2%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with CIX has triggered its stop at $13.50. To remain disciplined, we recommend covering the position at this time. This will result in a net investment loss of 12%, when combined with our previous recommendations.
IGM Financial Inc. (IGM-T) Feb 08
(A Top Pick Nov 28/23, Up 8.2%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with IGM is progressing well. To remain disciplined, we recommend trailing up the stop (from $30) to $33 at this time.
Suncor Energy Inc (SU-T) Feb 05
Hard business to model for the long term. Return on invested capital very low. Not a great business. High capital intensity. Price taking nature of business makes outlook for business hard to determine. Better options for investors in the market.
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
Stockchase Research Editor: Michael O'Reilly We again reiterate MTL as a TOP PICK. Compared to others in this sector, it is undervalued and has proven its resilience under challenging market conditions. We like that cash reserves are stable, while debt is retired and shares bought back. It trades at 10x earnings, 1.3x book and supports…
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research TVK’s growth was driven mainly through its acquisition strateg and it is now trading at 8.3x times' EV/EBITDA. In the 3Q, TVK’s revenue grew 4% to $150.4M, compared to last year of $145M and cash available for distribution also grew slightly by 9% to $13.2M…
MEG Energy Corp (MEG-T) Feb 07
Heavy oil company with very long reserve life index. Likes strategy of management. Producing very high cash flows. No cash taxes. Worried about acquisition target, but would require a premium to share price. Strong CEO with excellent track record.
Arc Resources Ltd (ARX-T) Feb 08
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research ARX's Q4 profit fell 32% on lower natural-gas prices, even as production rose to a record it does not expect to reach again in 2024. EPS came in at $0.84 and did however beat estimates of $0.50. Revenue also beat estimates coming in at $1.6B…
Cameco Corporation (CCO-T) Feb 08
It just broke its previous 2007 high. CCO is at the heart of the current energy transition. Little uranium will come on stream in the next 5 years. So, there's a built-in glut. If you have a strong profit, sell half, but hold this long term. Expect volatility in all uranium.
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.
Owns shares of company in portfolio. Likes renewable sector. Higher interest rates tough on business. If interest rates fall, will be good for bottom line. Lots of support from parent company allows for lots of options. Would recommend holding and/or buying.
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
Return on equity not strong. Does not own shares. Payout of dividend is high, but wouldn't expect capital gains. Recent weakness in business a concern. Canadian oligopoly of media good for business model, but probably wouldn't survive competition. Better options for investors out there.
Use this list wisely to identify buying opportunities.
Happy trading !!!