Earning Reports to Watch (Feb 04-08)

Opinion about ADW.A-T: 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.

Opinion about IDG-T: 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.

Opinion about CSW.A-T: 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%.

Opinion about CSW.B-T: 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…

Opinion about BPF.UN-T: 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.

Opinion about GOOS-T: 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. 

Opinion about SAP-T: (A Top Pick Feb 05/25, Up 15%) (Note the short timeframe.)  In Canada, it's retail. But south of the border it's more food services and is #3, and the US is dragging down its profitability. If it can return to half of former levels in US, it will be a very cheap…

Opinion about RAY.A-T: 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.

Opinion about Y-T: (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…

Opinion about FTG-T: Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research FTG is a small ($230M market cap) global supplier of aerospace and defense electronic products and subsystems. It operates through 'FTG Circuits' (high-tech circuit boards for aviation, defense, and high-tech customers), and 'FTG Aerospace' (designs and manufactures illuminated cockpit products and electronic…

Opinion about FTT-T: (A Top Pick Apr 12/24, Up 22%) Correlated with copper, and it set up nicely with where we were in the business cycle. Big breakout over the last 2 months. Good-looking chart with higher highs and lows. Sees further upside into August.

Opinion about WJA-T: 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.

Opinion about ATS-T: It is in the industrial space which she likes. Has a $2 billion backlog. It is now re-focusing on high value sectors. She sees 18% earnings per share growth and 20% upside overall. It has strong momentum and she rates it an 8 out of 10.             Buy…

Opinion about BIP.UN-T: Infrastructure is a great asset class. Brookfield is world-class, great at being value investors. A lot of the return tends to come from yield as opposed to growth. Good income generator with good underlying assets. For the long term.

Opinion about TIH-T: Is a catch-up trade that will test previous highs around $132. If we are starting a new cycle, copper will benefit. The chart shows higher highs and higher lows, but consolidation lies ahead as the USD rallies. (Analysts’ price target is $128.89)

Opinion about BBU.UN-T: (A Top Pick Feb 19/25, Down 2%) (Note the short timeframe.)  Trades at 30+% discount to NAV. Good long-term way to participate in Brookfield's private equity arm. Buying back stock aggressively, which he likes.

Opinion about HRX-T: 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…

Opinion about FCC-X: Cobalt is attractive but this is not a cheap producer, because they're in Canada and not Russia or Congo.

Opinion about UFS-T: 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…

Opinion about CFP-T: 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…

Opinion about CFX-T: 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…

Opinion about NTR-T: Should be affected by tariffs, but it's actually not because of its Canadian and US standalone businesses. Inexpensive. Capital intensive, so the rate of return is not as high as he'd like. Agriculture seems to be working its way out of a funk.

Opinion about IFP-T: It is a pure play lumber producer. Forest stocks are down because the housing market in the U.S. is quite weak. 50% of the lumber they manufacture and sell is in the U.S. Watch for interest rates in the U.S. coming down which would be good for housing. If you own it,…

Opinion about RUS-T: His fundamental analyst on this name rates it "outperform" and doesn't see 50% tariff ramifications as huge. Higher highs, higher lows. Since tariff tantrum, has really started to pick up and try to push higher. Likes the setup. If he's right about the rally into August, should retest recent highs around $46.…

Opinion about XAU-T: 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…

Opinion about GPS-T: 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…

Opinion about VCM-T: 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.

Opinion about PTQ-X: (A Top Pick May 29/20, Up 55%) Oxygen delivery. Recurring revenue model. Very strong outlook.

Opinion about SQD-X: 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.

Opinion about UNC-T: Making changes to be able to invest more in foreign stocks. Wait to see how they do.

Opinion about MIC-T: 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.

Opinion about IFC-T: It is always expensive. Has a ranking of 422, overall sales growth is modest and has a low ROC. There appears to be better opportunities.

Opinion about GS-T: 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…

Opinion about BPY.UN-T: 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…

Opinion about GWO-T: His favourite in the space. Nice yield. Growing in mature markets in Europe, generates reasonable returns. Very disciplined. Reasonable valuation.

Opinion about CIX-T: (A Top Pick Sep 11/24, Up 81%) Taken out at $32.

Opinion about IGM-T: 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…

Opinion about SU-T: It has had 6 consecutive quarters of beating expectations. He prefers CNQ with its strong history of consistent growth and 5% dividend which it has been raising for 25 years.

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

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

Opinion about TVK-T: Has followed it a long time and should have bought it. They compound their capital extremely well. Management executes. A great business.

Opinion about MEG-T: Thoughts on the offer? Both SCR and MEG held in taxable account. He's not an M&A guy. If you want a really good answer, ask somebody else 😉  A board will often reject something like this because they think it should be higher. And maybe a competitor will come along with a…

Opinion about ARX-T: ARX vs. WCP He'd skew toward this one. Best-run intermediate O&G company in Canada. On most fundamental metrics, WCP is cheaper. It depends on your own investing style. He's often willing to pay up for management that he considers superior. In a 5-10 year timeframe, you can't go wrong with either.

Opinion about CCO-T: Nuclear sentiment really starting to accelerate. Mini reactors are the trend, hyperscalers are jumping on board, and that will feed the trend. Cigar Lake struggles have gone away, now world leader. Earnings and technicals moving up. Tends to be volatile, so move in by tranches.

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

Opinion about BEP.UN-T: Undervalued. Well run. Diverse assets. Lots of hydro, as well as solar and wind, both in NA and globally. One of the leading players internationally. Huge increase in demand in electricity from data centres and AI; many of the hyperscalers want to use clean energy. Deal with MSFT.Near-term underperformance and tax-credit concerns…

Opinion about VNR-T: 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…

Opinion about BCE-T: It is turning around with the chart turning positive. There's a big catch-up trade to be had. The next resistance level is $42. It's the laggard among the big three telcos.