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

Look at what the opportunity is. The US has increased medical and recreational use, plus favourable legislation. Doesn't have the strongest set of assets in the US, so he'd favour MSOs over ACB. Europe is the longer-range opportunity, where it has a foothold.

(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.

It is in a big downtrend and he doesn't see a base. It needs to consolidate.

Thinks highly of it and management. 92% of rents come from Canadian Tire. Very safe distribution yield, low leverage around 40%. Not concerned about balance sheet. Decent job growing net operating income by 2.6% YOY.

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

(A Top Pick April 25/16. Up 16.15%.) A small investment management firm. Historically they have done very well in investing in both public and private oil companies, and buying and selling assets. They delivered a special $2 dividend to shareholders in June. He is a little less bullish on this now. Trading at a slight…

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research KMP.un's second-quarter funds from operations (FFO) per unit came in at $0.30, an increase of 7.1% year-over-year. The company reported a net income of $114.5 million, against $68.7 million reported in the second quarter of 2022, beating estimates by a wide margin ($30.4 million). The…

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research MEQ operates as a real estate corporation focusing on managing residential rental apartments and is now trading at 27.6x times' Forward P/E, but only at 1.0x Book value. In the last five years, MEQ’s revenue growth has been quite consistent, around 12% on average. Like…

A hold. A value name in apartments in Canada and the U.S. He's impressed with how stable their Toronto portfolio is, holding occupancy quite well. MGR is in the US sunbelt and Chicago. MRG is higher-leveraged. He's seeking REITs that are defensive. He doesn't see as much growth here vs. the REITs he already owns.…

It's in the most hated sector (office real estate and malls), given low occupancy rates in cities like Toronto and competition from Amazon. Also, Riocan carries a lot of debt. Debt is rising; rents are falling. Don't touch it.

Thinks office use will continue despite remote work.Interest rates tough on business (debt levels & alternative bond yields).Well run business with solid management team.Pressure on stock lately - unsure on future of the business.Difficult to ascertain future of office REIT sector. 

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They control Loblaw, which anchors a strong portfolio. Is stable. Hold many industrial warehouses. Solid managers running a solid balance sheet. Pays over a 5% dividend. Shares now are not a bargain, but a solid investment.

(A Top Pick May 16/22, Down 14%) It is in the business of real estate. It has grown through acquisitions and does well during downturns.

Favourite investment in grocery-anchored shopping centres. Very defensive, with necessity-based tenants. Owns the best portfolio globally in this space. Can double size of portfolio based on what they own today. Board refreshment with timely skills. 35% discount to NAV. Yield is 5.57%. (Analysts’ price target is $19.31)

Very complicated business model.Difficult to determine long term prospects of business.Higher interest rates usually good for insurance, but not panning out.Better names within sector to invest in.

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.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Units are quite cheap at 11X cash flow, and generally we like it for income. Very little growth is expected, and of course inflation/rates impact it, and the retail sector is somewhat under siege right now. Payout ratio is high at 93%, but did drop…

Insurers are much more difficult to analyze than banks, so he prefers banks, but this is a great one to own. High quality. Insurance and wealth management. Global presence with Canada (50% of revenues), US (17%), Asia (17%), and Europe (10%). Chinese business rebounding from Covid. Strong balance sheet, net cash. ROE above market average.…

It has done well, is well run, and is a good investment for the long term. A broad play on the stock market.

BAM vs. BN Over the next year interest rates should reverse, so we should see some good pickup in stocks that are yield plays. Not looking for big gains on these types of stocks.Chart for BN shows the common pattern of a peak in 2021, and then a decline in 2022. Lots of correlation with…

P&C insurance is doing very well, though this year is tougher than most because of catastrophic losses. So they raise their prices. One of the lower combined ratios in the space. Benefits from higher interest rates. Outlook is for double-digit returns over the next several years.

This is Fairfax's India subsidiary. It's cheaper to buy the parent company than FIH. Also buying a country-specific ETF is fine.

(A Top Pick Mar 21/23, Up 0.2%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with HR.UN has triggered its stop at $11.50.  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 buy recommendation.

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,…

GOOS shares dove over 27% in the first quarter this year, and China, a big buyer of these famous coats, is a headwind given that country's lockdowns Add to that inflation and supply issues effecting almost every business on the planet.

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…

High quality. Recognizable brands. Stream of revenue from franchisees. Efficient management team, not afraid of innovation. A lot is riding on the new CEO. Pricing power. 30% ROE. 20x earnings. If price dropped to $90, buy more aggressively. Yield is 3%.

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Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research AW.UN is a fundamentally strong fund, and is primarily an income stock. It has a yield of 5.8%, has grown its distributions by 3% annually over the past 10 years, and is reasonably valued at these levels. We feel that investors have opted to purchase…

Online shopping taking major toll on business.Not as many visitors in the past.Business not competing well with Amazon.Rewards program not very good.Not a good time to invest in business. 

Has a financial services division, so delinquencies could tick up in this economic environment. Not a strong unit growth grower. Well penetrated in Canada. Traffic could soften, stock's pulled back. Not interested.

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.

He sold all lumber stocks after the huge runup. But if he had to look at one, this would be it. Over $10 cash per share, with stock at $24, which means over 40% of company value is net cash. Lots of optionality. Intriguing.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Re: upcoming mil closures: The closing is expected by 1Q end, but costs may slip into Q2 depending on exact timing of layoffs. Other than severance, a lot of costs will be non-cash. CFX has about 1,300 employees, so close to 25% are being impacted.…

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.

This is on his watch list. He is not familiar with their fundamentals. Today's earnings release will help define their future.

Depends on the price of timber which soared during Covid, then plunged, but is now reasonable. WFG will benefit if there's a housing boom. Don't trade this, but buy and hold it.

(A Top Pick Jan 17/23, Down 12.5%)Stockchase Research Editor: Michael O’Reilly Our PAST TOP PICK with WEF has triggered its stop at $1.12.  To remain disciplined, we recommend covering the position at this time.  

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Dividend yield favorable. Run up in lumber prices due to demand. Increased housing demand in North America.

Very large business makes it tough to earn  high rate of return.Gold prices difficult to predict.Prefers Franco-Nevada & royalties.Valuation not very good.

EBITDA beat by 25%, but market was not excited, since a lot of earnings seemed to be pulled from the second half of this year. Capex lowered. OK leverage. Decent name, decent dividend. There are higher quality names, but this is fine.

ELD vs. K Doesn't own either. Kinross has historical issues trying to right the ship, doing better recently. For ELD, a very high 60% of NAV is exposed to development risk. Recent mine is financed and built, but there's still execution risk. Trades at a discount on geopolitical risk too.His preference is AEM, with one of…

$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.

Always highly leveraged on risk/reward. Geopolitical risk of Cuba. Nothing compelling in terms of nickel or cobalt options, there are better choices. No dividend. 

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.

China demand will affect business.Current share price does not justify investment.Hard to predict outcome of business. Cyclical commodity that is hard to earn profits in. 

On a downslide to the bottom of a not-bad trading range. Sticking his neck out, but thinks it's a buy right now, with potential of $6.40. Bottom of the range is $4.40 and if it goes below, there's a lot of nothingness to the $1-2 range.

Really likes copper stocks for this year, poised to perform. Took out November-December highs. Next target is June 2022 highs, around $40-41. Based, took a leg higher, consolidated, broke out.

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

Copper is a great strategy for the medium to long term. Investors will sift through companies in the base metal sector. There are concerns re economic weakness so wait before getting into copper companies.

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.

Recently rotated a lot of our precious metal allocation to silver instead of gold. More of a long-term industrial use with the electrification of the world. Precious metals in general should be alive and well for years to come.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research WPK is a bit of a 'sleeper'. It has $450M net cash, and is 53% owned by its parent. The stock is cheap. Looking at consensus estimates, EPS growth is really expected to slow down, and is essentially going to be flat next year. Expectations…

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…

A favourite of his 3-4 years ago, but sold it after an acquisition, but paid a lot for it and that hit their profits. Also, executives sold a lot of stock. Decent company but there is better Canadian tech.

Over-expanded during pandemic. Partnership with AMZN will help. Valuation still too high despite pullback.

Chart looks really good technically, recently broken out of its downtrend. Reaccelerating. Testing highs of 2020, and even those of 2018. Stock looks really powerful. 

It has done very well but is maybe overdone, so you could trim your position. It is well positioned in the tech sector but he prefers others with more attractive prices.

(A Top Pick Jul 14/22, Up 117%) Still likes it, tremendously undervalued. Leaders in Canada and US. 6% market share in US, a nascent market. Recently announced 2 significant US contracts. Robust pipeline of states looking to digitize. Trades at barely over 1x revenues. EBITDA positive, improving every quarter. Lots of room still.

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.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. TC has struggled now for a couple of years. Sales growth has slowed, and it saw a loss in 2021 and an even bigger loss in 2022. Net debt of $226M is very high vs annualized cash flow. It misses earnings estimate about half the time. Insiders own…

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 20/22, Up 46.5%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with PSK is progressing well.  To remain disciplined, we recommend trailing up the stop (from $20) to $23 at this time.  

If natural gas price doesn't go up, they'll have to cut the dividend. They, and others, were too optimistic on the commodity price when setting the base dividend. Trades at 5x $80 oil. Natural gas is tough.

(A Top Pick Jul 18/23, Up 14.7%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with CVE is progressing well.  To remain disciplined, we now recommend trailing up the stop (from $20) to $24 at this time. 

(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.

Energy is very cyclical. This will lose money when the economy is on the downturn. That happened a few years ago. Unless you are optimistic about oil prices, don't build a position.

(A Top Pick May 11/23, Up 5.3%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with SPB is progressing well.  To remain disciplined, we recommend trailing up the stop (from $9.00) to $9.50 at this time.  

Headwind of higher interest rates. Cost overruns on Coastal GasLink, so has underperformed ENB and PPL. Once Coastal is complete, overhang should lift.

(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.

Has done well. Classified as an industrial, but it doesn't have cyclicality. Pricing power and acquisitions drive the long-term growth. Operate in a lot of uncontested markets. Should continue growing at high single-digit pace. Zero product obsolescence. Sold, and high-graded his portfolio to WM instead. Both are good.

He's been in business for 30 years, and BBD has never been a good long-term stock. Now, it's in the right space with industrials. The stock is in the bottom of its trading range; if it breaks below that, this will probably return to $30. BBD has a had a decent run this, year the…

The question was on his preference between Toromont or TFI International. Although Toromnt is good he prefers TFI which has been a great stock and huge performer. It has great management which has deployed capital very well and made smart acquisitions. There is more upside.

It is at a good valuation now, being near its low. Has a solid dividend and dividend growth rate. In general telecom stocks are down and there are competition concerns for the sector but this should not be a major concern.