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. 

Over 90% of rents come from Canadian Tire, secure cashflow. Over 99% occupancy. Internal growth has contracted, but this is short-term. Perhaps only 2% capital growth, but a safe distribution. Yield is 6.5%.

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.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research Revenue was $67.6M slightly better than estimates.  Rental revenue rose 16%. Cash flow per share rose 19% to $2.47, and ahead of estimates of $2.39. Net operating income rose 11%. We would consider it a solid quarter. Commentary was good, with the company talking about…

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%.

Attractive level, high double-digit discount to NAV. Great portfolio. Multi-family residential portfolio is growing, may start selling it off and reallocating capital to retail or to share buybacks. Overhang: $600M worth of condos closing in next 3 years. Risk/reward is in your favour to buy here.

Thinks rates are heading higher, so REITs are going to come under pressure. If the S&P 500 real estate sector is down 2%, perhaps the Canadian sector won't be hit as hard, but it'll still head lower. If his call is correct about a bigger correction later on, it'll be a better opportunity.Look to energy…

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)

Very defensive, trades at nice discount. Loblaw is a safe and secure tenant. Growing part of portfolio is industrial warehousing, a sector he's bullish on. Safe distribution. Very comfortable owing for next 12-18 months, as a broader REIT recovery should be near.

(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.…

Aims to own the finest grocery-anchored real estate across Canada. High quality. He thinks it's the best globally. 30% discount to NAV. Get paid to wait while the value gap closes. Goal is to grow earnings and NAV by 3% a year for 3 years. Defensive plus growth. Yield is 5.3%. (Analysts’ price target is…

Great performance in 2024 with good dividend yield. Does not own shares. Good growth prospects ahead. Would recommend buying on weakness. 

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.

Walmart is its major tenant, secure, great cashflow. Investors like the distribution of over mid-7%. Retiring low-cost debt, so earnings will have negative FFO growth. He likes to see a return beyond the yield. See his Top Picks.

MFC has a slightly better dividend than SLF right now, though he likes both names. MFC is also slightly cheaper than SLF, so that's why MFC is in his portfolio.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research We continue to like TMX group. They should continue to benefit in an uptrending market and from a valuation persepctive, given the stability and steady growth, we don't view the 23X P/E as particularly 'challenging'. If a bit more deal activity comes back in the…

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…

All the insurance names, both in Canada and the US, continue to work. If interest rates do, in fact, go higher, that will only be beneficial for lifecos and other insurers. The chart looks fantastic. Good run, so there is some weakening in the intermediate term.If a long-term holding, best thing you can do is…

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…

They own brands, but some like Tim Horton's have fallen in quality. Also, they carry a lot of debt. Some of their brands are not that strong.

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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. 

(A Top Pick Oct 17/24, Down 6%) (Note the short timeframe.) Chose this based on historical seasonality for lumber. Surprised those stocks aren't acting better, especially since the California fires.

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 ADN may be better positioned to navigate trade tensions between Canada and the US. It mostly focuses on timberland ownership, and it does not own processing facilities. We could see the name being slightly negatively impacted by any tariffs, but overall, we continue to focus…

Compare this to the chart of gold prices or XGD, and ABX is very different, lagging. Instead of Barrick, look at leaders like Agnico Eagle.

Why the selloff? Probably pulled back because of the 10-year treasury rising. Just increased dividend, that should continue. Coming out of a long turnaround. Core holding in his income fund. At $14, he'd probably trim; at $17-18, would probably exit. Yield is 6.4%.

(A Top Pick Aug 07/24, Up 25%) (Note the short timeframe.)Still ranked very high on RSI. Gold stocks have had a bit of a correction since the election as uncertainty diminished and the USD and crypto took off.

$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 May 15/19, Up 134%) Capital discipline has been very strong. Assets have allowed company to do well through various pricing cycles. Excellent prospects going forward. Would recommend buying for the long term. Copper assets very high quality. Recent acquisition of shares has been good capital allocation. 

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…

Lots of uncertainty with its Panama mine, and the issue is at an international tribunal. But that's the risk of the mining business. He prefers and owns HBM in his global equity growth fund.

(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…

Collection of Tier 2 assets. Never been fond of Ontario assets. He likes higher quality. Could do very well with a rising price for gold, which tends to favour the marginal over the lower-cost producer.

(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…

The chart shows a massive spike up, massive drop, and now recovery in the past year.  They likely paid too much for a company in 2022 and were trading at a high PE. He had added shares in 2023-4 after a new CEO started bundling products, focus on margins and integrated companies. Has been doing…

Never owned it. After it went public, it was growing revenue at 80%, but was unprofitable. He can't value a company losing money. But SHOP Is shifting: revenue growth is falling as margins rise. It trades at 103X PE, which is not good considering their growth rate.

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.…

Best software company in Canada. Growth by acquisition makes him pause, as things go well until that final acquisition hurts. Great job buying and integrating businesses. Growth being priced at an excessive premium. Solid growth but high, 40x multiple. 

(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.

Excellent company. Trades at 18x cashflow. FRU is cheaper at about 9x.

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

Likes the energy space, and this name is his play. Pipelines to the West Coast have opened up. 

(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.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research More drilling 'should' result in more activity for the service sector, of course. PD is very cheap and seeing fundamental improvement. We would be comfortable in the $76 to $77 range. Unlock Premium - Try 5i Free

Watch this because shares have fallen far and Brookfield is involved with them in a serious way. Watch their next two quarterly reports.

Likes it short and long term. They touch 30% of all LNG and 25% natural gas in North America. There was data centre hype in this stock, but faded after DeepSeek last week. Pays a 5% dividend yield. Likes it more after spinning off South Bow, a pure play natural gas company.

(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.

Garbage is boring and a beautiful business. Looks poised to break out to new highs. A boring name with strong technicals (price momentum, RSI, and whether institutions are buying or selling). Price momentum is improving and, especially, trading above 50- and 200-day MAs. RSI is reaccelerating. Strong technical setup, with a good fundamental idea. Yield…

Negative impact from US tariffs. The names on this list are plenty. Start with the industrials, for instance. He's a big fan of BBD.B, but they make everything here in Canada.An aerospace name like CAE, the rails, auto components like LNR and MG.

Great company. Looking at the 5- or 10-year chart, just chugs along from bottom left up to the right. If you own a partial position, definitely think about adding. Dividend's grown significantly over time by ~12% per year for 5 years. High quality, very well run.Cash is building up on balance sheet, so he expects…

Not high-growth. Balance sheet isn't clean. And there's political pressure to open up the teleco market. There are safer places.