Aurora Cannabis, Canopy and More Earnings this Week (Feb 11-15)

Avoid the sector. High risk, speculative. Doesn't see catalysts to drive the sector higher, especially if Republicans succeed in the US election.

(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.

This is another company in the cannabis space. This is not a cannabis producer, it is a company that adds value in that space. They are mapping cannabinoids, looking for different formulations to treat different diseases.It is highly speculative, but he thinks there is opportunity for this type of company. He likes the management. In…

Doesn't know this well. They're in the cannabis sector, more in the extraction market, an area that will continue to expand. He's watching their progress in earnings.

Good for marijuana exposure. Speculative, but quality. 

Like Choice REIT is to Loblaw, CRT is to Canadian Tire. The 6% dividend is safe, based on a safe payout ratio. If interest rates stay pat, these shares won't move much, but if rates fall, CRT will do well.

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

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research The stock has really jumped over the last month and the most recent news we see is relating to CKI renewing its NCIB (share buyback plan). CKI plans to buyback 5% of outstanding shares over the next year. Results vary significantly period-to-period making it harder…

Reports on November 5. Now trading at an interesting level, over 15% discount to NAV. Fallen perhaps because of announcement on immigration being curtailed. 60% of portfolio in Atlantic Canada, actively diversifying in Ontario and BC. Likes that 44% of assets are not subject to rent control. Expecting results to be good. Stay the course.

(A Top Pick Jul 04/23, Up 48%) Excellent company with strong prospects. Will continue to own. Founder led, with lots of skin in the game. Demand of housing expected to keep growing. Does not lose any sleep over company. Mid-market apartments also continue to grow. No rent control in Western Canada - helps increase profits.…

Apartments on both sides of the border. Always trades at wide discount to NAV, a good starting point when you invest. Nice portfolio. Keep holding if you own, but better ideas out there. Nice distribution of 5.5%.

Concerns over exposure to condo market. Great portfolio, quite defensive. He's bullish on outdoor shopping centre landscape across Canada, with low supply and increasing demand from population growth. Great management. You're well served by holding on.

Office has suffered since the pandemic, supply/demand are out of balance everywhere. Occupancy has slipped to lowest level in 2 years. Leverage is quite high, while net operating income is down this quarter. An execution story. Some wonder if distribution can be sustained.

It is in the short term mortgage lending business, mostly residential. It is trading at a slight discount to NAV with an 8% yield. It is not widely followed.         Buy 2  Hold 0  Sell 0 (Analysts’ price target is $12.96)

(A Top Pick Nov 07/23, Up 5.7%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with CHP.UN has triggered its stop at $13.75.  To remain disciplined, we recommend covering the position at this time.  

(A Top Pick Nov 06/23, Up 63%) There's still upside. CIGI has benefited from rate cuts, since CIGI is in real estate. Peer CBRE announced strong results two weeks including double-digit revenue growth. There seems to be pent-up demand in the market. They use economic downturns not only to buy companies, but hire top talent.…

One of his largest holdings. One of the highest-quality grocery-anchored shopping-centre portfolios globally. Trades at upwards of 25% discount to private market value. Management seeking to increase value by selling non-core properties and reducing debt. Yield is 4.8%. (Analysts’ price target is $20.30)

They turned around to regain investor confidence, but he's cautious buying it now. Is reasonably valued. Tricky. Pleased with it, but the company hasn't changed fundamentally.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Trading at high discount to NAV. Significant cash retention compared to peers. Diversified cash flow streams. Bid competition to slow acquisition growth.

With 10-year bond yields popping up, some of the REITs are a bit challenged. This is a Canadian REIT, even though WMT is its anchor tenant. He prefers storage REITs in the US. He worries about the Canadian economy. Yield looks strong at over 7%, seems safe.

Owns shares in the business. Very strong franchise in Canada. Recent 52 week high of share price indicative of business success. Very strong assets with reliable dividend. Would suggest a good long term investment. 

Rising with the market. Pop in July. We've had a correction, but it's important that it hasn't corrected back to where it broke out at $38.50. At this point, it's just a correction within an uptrend. On RSI, nicely in the upper half, doing pretty well.

BN owns a percentage of BAM. BN is trading at a discount to NAV, widest discount in a long time, which is why you want to look at buying it here. Working at home has hurt BN's commercial properties. BN has raised lots of capital, great company, well run. BAM and BN are two of…

(A Top Pick Nov 13/23, Up 55%) Insurance doing exceptionally well. Recently bought ZZZ. Things are chugging along well. Dividend raised from $10 to $15, significant increase. Still at a discount on price to book. In client TFSAs. Very keen on it.Just as with BRK, its insurance business takes in premiums, which get invested in…

Don't buy. Doesn't like insurance. 

Great properties, but diversification means it doesn't get a great valuation from the market. Sunbelt properties are over-supplied. Owns office properties and retail. Transforming to multi-family and industrial. Trade action starting to pick up. Secure yield of about 6.7%. Growth will be a while, depends on your time horizon. Better names in the meantime.

Most recent quarter was a great one. ROE was 28%. With all the stuff that is happening in the marketplace right now, there are a lot of concerns about Alberta specifically, and you also have a lot of concerns about financials. Thinks they put in a great quarter. To be a buyer of the stock,…

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. 

Affinity for a product is different from investing in a stock. Don't touch until gets above $13.50. Stock seems to be pausing and could continue dropping, which would be confirmed by a drop below $12, and then you should get out. Thinly traded is a problem, as you don't want to buy a stock you…

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…

She scores it 6 out of 10 for value and fundamentals, and it's on her watch list. Likes it. Sees 11.5% upside. Analysts are mixed, though. A lot depends on the future economy---will benefit as interest rates decline and people eat out more.

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Growing quickly, but not investing at this time. Good yield, but not major capital appreciation. However, ~5% dividend yield is safe. 

Traditional bricks and mortar business that will face competition from eCommerce. Undifferentiated shopping experience that is not enjoyable. Discretionary product offering makes it difficult to retain customers. Would not recommend investing at this time. Housing slowdown in Canada will also be hard on the business. 

Short interest was 2%, but has come down. Continues to slowly grind higher. Likes the technicals, especially if it breaks above the highs of 2023. 

A disappointment. Pandemic has been the nail in the coffin for movie theatres and DBO's motion systems. Simulation and industrial segments have been profitable. Treading water right now. Long road ahead. Wait and see before stepping in.

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.

They do canola mainly. At these prices the stock is so cheap. He sold because he was not seeing enough capital being deployed in Canola streams.

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…

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

He owns it around these levels. They have mines in Bolivia and Spain and looking to acquire in Argentina. The property they just bought has costs of $500-$650 per ounce of gold. He is concerned about the revolving door on management. He does not know where gold prices are going to go. He will continue…

They have a large Brazilian gold deposit. The problem here are indigenous people challenges there and a government contract that pays out a crazy amount to the managers. This payout is not aligned to the shareholders' interests. Then again, it's a cheap stock vs. gold in the ground.

Fiji is an interesting place. They have raised $85 Million last year when it was tough. If they get this thing going it will build up confidence. They are putting a relatively small scale gold mine into production while doing exploration. They should eventually get bought out.

There is no dividend. Sales are up but earnings are less negative rather than positive. Earnings growth forecast for this year is zero.

Does not own shares. Prefers companies companies with lower costs and higher return on capital. 

The chart has been steady despite plunges in the timber price. Impressive. But he wouldn't enter this now.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research WEF has rallied with interest rates, which help the sector, but is still down 26% for the year and 37% over 52 weeks. Note the dividend was cancelled in November 2023 and none is paid currently. This week WEF announced it would be cutting production.…

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research In the last year, ADN saw it's price see a slight drawdown, but total return was up by 3%. ADN continues to be a solid dividend payer with a yield of 7.14% while payout ratio is quite good at 37.36%. From a valuation perspective, trading…

Would recommend buying at the current share price. Has good list of projects, strong balance sheet and good management. Gold prices have been strong which is good for earnings. Margins continue to remain stable. Expecting better performance in Q4. Share price is at a good place to buy. 

(A Top Pick Jan 18/24, Up 33%) Also pays a big, fat dividend, which sometimes you need to be cautious on. Drawing a linear regression line helps the chart make more sense, especially with a volatile stock. Linear regression helps you see through all the peaks and valleys. Stockcharts.com is a good place to go…

He doesn't own any gold stocks. If you want to enter, focus on large-cap, senior gold stocks. They offer more conservative growth, there's a lot behind them (more than just 1 mine or project), and they're in friendlier jurisdictions. Kinross just had great results. 

$2.25 price target. Growing pains starting up a mine. He'd be averaging down. Issues always signal a really good entry point at cheap valuations. Have to be patient. This wouldn't be his only holding; he'd own it amongst at least 5-10 companies.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research It is certainly not beyond possibility. Bloomberg default ratio is 7.36%, which is very high for that indicator. Cash flow was negative in the last quarter, yet 12-month interest expenses were $36.1M net. With its small size and Cuban and other issues, we are not…

There were a couple of subtle things went on with the trust conversion which discouraged a lot of investors. An illiquid stock. Most of their exposure is in B.C. and Alberta where housing is still very strong. Thinks we're at the peak of a cycle so don't have it as a long term hold.

(A Top Pick Jan 29/24, Up 22%) QB2 will be a very valuable asset. Always bumps getting a new mine underway, but outlook for copper long term is very positive. Biggest risk to portfolios is that inflation eats your money, so you need to own things that can put up prices tomorrow if inflation goes…

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research EPS came in at $0.24 beating estimates of $0.20. Revenue came in at $506.89M beating forecasts of $486.08M and displayed growth of 31% year-over-year. Profit more than doubled on a year-over-year basis coming in at $126.46M. The board approved the company's $470.7-million direct reduction pellet…

Even with change of government in Panama, still black or white Vegas-type bet as to whether the mine will come back on. Wouldn't buy. He'd look at other copper names where it's "when" not "if". Speculative. He owns it, bought it way cheaper, wouldn't buy at these levels.

(A Top Pick Oct 12/18, Up 2%) He still likes gold, Newmont (which acquired G-T) and Goldcorp.

Stockchase Research Editor: Michael O'Reilly LUN mines base metals such as copper and zinc in Brazil. Chile, Portugal, Sweden and the US.  Management just reaffirmed 2024 guidance on production and is hitting an all time high in copper production for the company.  It trades at 1.3x book, 18x earnings and is growing cash reserves as…

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research.  NGD has had a nice run recently alongside the price of gold, and while its fundamentals are fairly strong we might expect a slight pullback here as it has run up ~65% in the past month. Debt levels are OK, its free cash flow can be…

(A Top Pick Mar 15/19, Up 17%) It was bought back in October and so he does not hold this any longer.

Part of syndicate that brought company to markets. Financials in China a little opaque, but company has been generous to shareholders through dividends and buybacks. Would recommend buying. 

(A Top Pick May 30/23, Down 11.1%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with WPK has triggered its stop at $39.  To remain disciplined, we recommend covering the position at this time.  This will result in a net investment loss of 9%, when combined with the previous recommendations.    

Uptrend occurring right now.Smaller than larger players in sector.Company trying to breakout.Hesitant to buy. Give stock a chance to prove it can breakout. 

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…

Has been a wild ride in past years, but they are now on the right path under current managers. Metrics like margin expansion look fine. Is now trading at a huge discount to intrinsic value and can re-rate further as performance continues.

Strong company with good outlook. Stock has a lot of upside. Trading at premium so would recommend holding for the long term. Founder led with a large amount of skin in the game. 

Spiked up on the close last week. Everything looks really good about this for the long term, everything says you should own some. RSI against S&P since 2022 has been really good, up and to the right. Buy some today with a partial position, then add a second component on a further breakout, and a third.…

One of very few growth stories in Canada. Huge success over the years. Trades at over 50x earnings. If you look at the chart between 2022-2023, the stock drew down in the neighbourhood of 20%. Challenge is that if we go through difficult market conditions, the high-multiple stocks correct more.For years and years, has missed…

(A Top Pick Sep 25/23, Up 63%) It was bought out, an undervalued Canadian tech company as leaders in e-procurement in both Canada and the U.S. This stock was too cheap for too long, then KKR bought it last May. He thought the buying price was way too late.

He follows this, but does not own it. They just reported an earnings miss. He does not see their business model panning out on the financial statements. Now trading under $12, he expects more downward pressure.

Sold because its ROIC returns started to get a bit wonky. In fact in last 3 years, ROIC has been negative. Satellite internet access has eaten the lunch of fibre. Hard to form a moat around its domain business. Wait for ROIC to be in excess of 20% for at least 3 years in a…

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

(A Top Pick Sep 20/23, Up 23.3%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with PSK has triggered its stop at $23.  To remain disciplined, we recommend covering the position at this time.  This will result in a net investment gain of 27%, when combined with our previous recommendations.  

It is suffering much more than energy stocks in general. If it breaks $6 then buy for a swing trade.

The ZEO ETF recently broke out to new highs. But this one is not a leader among those. He prefers CNQ, IMO or SU.

(A Top Pick April 23/13. Long Tag Oil (TAO-T) and Short Imperial Oil (IMO-T). Down 42.51%.) Did an equity issue last fall at about $4.40, which the Street didn’t like. This is a New Zealand oil/gas play and they have about 5 or 6 catalysts coming up in terms of major wells.

Just beat earnings and have increased production. Cheap valuation compared to peers. But it's getting more expensive heading into 2021. There's no growth here, but that goes with the entire oil patch. The real issue is will they survive. Their balance sheet is getting better, but still high for a blue-chip name. You'll be saved…

In the midst of a bidding war. More of a hold than a buy. Prospects for material upside are not very high. Better opportunities elsewhere. If you made profits, take some and invest in something like GEI or even TWM, if you have a higher risk tolerance.

Is a lower-risk version of Ensign given its healthier balance sheet as reflected in his higher valuation

It is hard to like a stock that has cut it dividend by 75%. Weather (milder winters) is an issue for companies involved in the heating business. Its revenue base is not growing as fast as before. The stock has done nothing for a long time. It's interesting that15% is owned by Brookfield.  Propane is…

Does not own shares - prefers Enbridge. However, company is overall a great business. Recent Southbow spin out has left company as a pure gas company. Very good assets - hard to replicate. 

(A Top Pick April 3/14. Down 12%.) A fully integrated agricultural company with a railroad to their elevators along with production of legumes and wheat. Thinks it should deliver quite nicely this summer because of what is going on in California. Feels drought is going to haunt us from a food inflation perspective.

This is a funny one. The book value is $4.80. They started a few more projects in China. It is not for him, but he can see why somebody would like it.

The space has been a fantastic investment. There aren't a lot of options for getting rid of garbage. Once you're on their books, they can gradually increase prices. The issue is that valuations are quite high, and always have been. High barriers to entry. When stocks come off, the expensive ones come off the fastest.

Strong company that has been under owned lately. Recent quarterly earnings not as good as expected. Working capital and supply chain issues also concerning. Riskier name given lately results. Would not buy at this time. 

Chart appears to be range bound. Would recommend a small position, or watching for leg ups. 

Reasonably good quarter relative to peers. Dividend is up, which is very important when you're investing in the space. Price is OK, and yield's still pretty good.