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

Opinion about ACB-T: Avoid the sector. High risk, speculative. Doesn't see catalysts to drive the sector higher, especially if Republicans succeed in the US election.

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 IN-T: 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…

Opinion about NEPT-T: Cannabis Nutritional supplements. If they get it right there is huge potential. In the medical uses, there is a lot of long term potential. He has no idea who will be the eventual winners in this space. He thinks there is a bit of frenzy in this space. Buy on rumor and…

Opinion about WEED-T: Good for marijuana exposure. Speculative, but quality. 

Opinion about CRT.UN-T: 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%.

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

Opinion about CKI-T: 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…

Opinion about KMP.UN-T: 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.…

Opinion about MEQ-T: Great little company. In certain markets, huge market share. Its markets are non-regulated, so it's easier to capture upside than in rent-controlled markets. Model is buy-fix-rent-repeat. Alberta is more affordable with higher population growth than national average.

Opinion about MRG.UN-T: 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%.

Opinion about REI.UN-T: Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research We think REI will be able to manage HBC's exit. The valuation is quite low at 9X cash flow, and, all things considered, the units have held up relatively well, down 6% YTD and up 2% in 52 weeks. The distribution was…

Opinion about AP.UN-T: Really likes. Only part of the office space that's any good is luxury. For example, high end in New York is booming. Allied owns buildings that are top level and edgy. Huge conglomerate, giving tenants lots of choice. Unique position. Wonderful development opportunities.Good business, solid financials, great properties, stock's cheap. Dividend's not…

Opinion about AI-T: 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)

Opinion about CHP.UN-T: CHP.UN vs. CAR.UN CHP.UN is far more defensive. Great portfolio, with about 20% in industrial warehouse space (a sector he's quite bullish on). If you want defense, this is your better bet.With CAR.UN, you have to think about affordability and how defensive is the tenant base and the cashflow from that base.…

Opinion about CIGI-T: (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…

Opinion about FCR-T: Pre-eminent portfolio in the space. Necessity-based real estate in Canada's urban centres, with half in Toronto. Already owns future development space. Near peak occupancy, so there's potential for positive inflection in retail rents. Good growth prospects, at 25% discount to NAV. Yield is 5.14%. (Analysts’ price target is $20.02)

Opinion about MFC-T: Why doesn't it get more traction? The insurance business, in general, is not expanding dramatically. You get the nice dividend, which means they're not investing in the business. And they don't invest in the business because there's really nowhere to put their money for a high ROIC. Highly regulated, higher interest rates…

Opinion about MRT.UN-T: 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.

Opinion about SRU.UN-T: Very defensive income profile. Main anchor is WMT, and the flipside of that stability means internal rent growth is quite low. Not a lot of earnings growth. Attractive yield in low 7% range, but high payout ratio. Better retail opportunities elsewhere.

Opinion about SLF-T: Their last quarter was penalized due to some stop-loss insurance on their books and a small impairment from an investment in Vietnam and softer flows at MSF, their US investment arm. Is now in a range worth buying. This and MFC remain core holdings of his. It yields a safe 4.13% (Analysts’…

Opinion about X-T: A wonderful performer in recent years. Not just the TSX, but they have businesses around the world like trading platforms and economic data/analytics, based on subscriptions, so lots of recurring revenues. Their results may move a little due to trading volumes and new listings, but TMX is so diversified that enjoy recurring…

Opinion about BAM.A-T: 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…

Opinion about FFH-T: Doing everything right. Combined ratios are improving. P&C insurer, big exposure to reinsurance, global & NA. Serial acquirer. Great management team. Advantaged by rising property values. Extreme weather means the risk goes up, and so do the premiums. Earns a lot of investment income on its growing float. Undemanding multiple.

Opinion about FIH.U-T: Don't buy. Doesn't like insurance. 

Opinion about HR.UN-T: Would recommend holding. Majority of portfolio in sunbelt states like Arizona and Texas. Would expect income to increase as more people move to warmer Southern areas. Good balance sheet that allows company to maintain dividend payouts. Expecting better times for company ahead. 

Opinion about RFC-X: 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…

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 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 QSR-T: Good business economics. Really strong brands that generate a lot of cashflow. His hangup is the balance sheet, it's not investment grade. In times of turmoil access to credit could be restricted, and acquisitions are not in easy grasp. Lots of value at 16x PE.As the economic situation gets tighter, discretionary items…

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Opinion about AW-T: Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research AW is relatively small, but we like it well enough. It has operated very well in differing economies, raised its dividend over time, and maintained its market share. However, we would view it far more as an income stock and not one…

Opinion about CTC-T: 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. 

Opinion about CTC.A-T: Can't tell what the impact of a trade war will be; they receive a lot of Asian goods. Also, this is consumer-dependent which is a risk. They are selling Helly Hanson at a profit and will reinvest funds in tech. They're buying back shares. Not a bad business and are profitable, but…

Opinion about DBO-T: 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.

Opinion about JTR-X: 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.

Opinion about INP-X: 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.

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

Opinion about ORV-T: 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.…

Opinion about BSX-T: 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.

Opinion about LIO-X: 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.

Opinion about NIF.UN-T: There is no dividend. Sales are up but earnings are less negative rather than positive. Earnings growth forecast for this year is zero.

Opinion about TKO-T: Does not own shares. Prefers companies companies with lower costs and higher return on capital. 

Opinion about WFG-T: (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.

Opinion about WEF-T: 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…

Opinion about ADN-T: 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…

Opinion about ABX-T: Still digesting all its M&A. Mines located in places with higher geopolitical risk. Good run because gold's had a good run. Instead, she owns AEM.

Opinion about CHE.UN-T: A top pick last November, because it's one of the leaders in industrial chemicals in North America. There's a lot going on behind the scenes here. He didn't see the downturn in this sector as well as intense competition. Likely, shares won't recover until the economy picks up, but an opportunity now.

Opinion about K-T: Whole bunch of decent assets, including a new one in Ontario. Stock will either go up of its own volition, or get taken over. Stock's performed well due to good cost containment. Good production growth and pipeline. Firing on all cylinders.

Opinion about PGM-X: $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.

Opinion about S-T: 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,…

Opinion about TBL-T: 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…

Opinion about TECK.B-T: They dropped their coal business to become a pure metals play. The company has changed. They're pulled down along with industrials, given tariffs. Now is a buying opportunity. He might add to his holding.

Opinion about CIA-T: 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…

Opinion about FM-T: Looking at it with renewed interest. Political situation has changed, license may be reinstated. That's critical to this company going forward, but also critical for Panama. Multi-decade reserve life, produces 1.5% of world's copper. Cautiously optimistic. Potential outsized upside for a risk-hungry investor.

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

Opinion about LUN-T: 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…

Opinion about NGD-T: 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.

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

Opinion about SVM-T: 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. 

Opinion about WPK-T: (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.    

Opinion about YRI-T: 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. 

Opinion about XAU-T: (A Top Pick May 29/09. Up 6.6%.) Very intelligently run company. The game plan is to generate ideas/geologic targets and bring a major company in to do the hard, expensive work. Made a discovery of a very nice deposit in Long Canyon Nevada and hold 49% with Frontier being a joint partner.

Opinion about STC-T: 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.…

Opinion about SHOP-T: A Canadian stock that will be a major beneficiary of AI. 

Opinion about CMG-T: 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,…

Opinion about CSU-T: Why do fund managers continually ignore the nosebleed PE? Claim to fame, and with tremendous success, has been to buy stable and cash-growing assets at the right price. One potential negative is whether it's hitting the law of large numbers? Now it needs larger deals to run the same playbook, and at…

Opinion about MDF-T: (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.

Opinion about SW-T: 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.

Opinion about TC-T: 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…

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 PSK-T: Excellent company. Trades at 18x cashflow. FRU is cheaper at about 9x.

Opinion about BIR-T: Natural gas utility. Price of nat gas is volatile, and he didn't like that they didn't hedge the price. Nat gas price rolled over, and large dividend had to be cut in March 2024. Dividend is now skinny, with a yield ~2%, a much better strategy.

Opinion about CVE-T: (A Top Pick Apr 16/24, Down 39%) Lots of capex to fix issues with refining assets. Sold last September when sentiment soured on price of oil. Investor sentiment muted even when company reached deleveraging targets. Nothing materially wrong with it, whole industry has rolled over. Sharp management, committed to investors.When he's ready…

Opinion about TAO-T: (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.

Opinion about ECA-T: 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.…

Opinion about IPL-T: 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.

Opinion about PD-T: Drilling services to energy (oil & gas) producers. This name weakens when energy companies decide to pull back on drilling; they do that when the commodity's weak and there's less $$ to spend. Very volatile, and that's why she stays away.Gets swayed by underlying commodity prices and the energy sector, in general,…

Opinion about SPB-T: Strategy was to get bigger in Canada and US propane distribution, and he liked that. Didn't like the payout ratio of 80-90%. Certarus acquisition wise. Balance sheet couldn't support all its big plans. Dividend cut a positive, and should free up capital.Widespread team turnover since the acquisition, so it'll take him some…

Opinion about TRP-T: Defensive. Pays a 4.8% dividend. Natural gas demand will endure. No tariff worries. Data centres need power, and he doubts tariffs will impact Canadian energy supply. (Analysts’ price target is $71.18)

Opinion about CRP-T: (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…

Opinion about BOY-T: 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.

Opinion about WCN-T: 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…

Opinion about BBD.B-T: Very focused on a single segment, private aviation. Increasingly, more revenues are coming from after-market parts and service. Bigger addressable market opportunities with the bigger installed base of its planes. Growing opportunity in small, but high-margin, segment where they adapt a plane's chassis to reconnaissance planes of NATO allies. Deleveraging, big free cashflow.…

Opinion about TIH-T: Reasonably well-tied to commercial construction. Fantastic job dealing with uncertainties. Likes the business and management team. A bit too big for him, as it's about to exit "SmallCapLand". If you own, decent time to add.

Opinion about T-T: Everyone who wants a cellphone already has one. The market is not increasing. Not expensive. Trying to sell towers in the States, which makes sense. Core business is not growing the way it used to.