The markets have been doing well, and investors are keeping a close eye on this week’s earning reports from a great number of Canadian large-cap stocks. Cannabis giants Aurora Cannabis (ACB-T), and Canopy (WEED-T) are both reporting their earnings this week. Other big names this week include Canadian Tire (CTC.A-T) , Shopify (SHOP-T) and, Telus (T-T) as well as Bombardier (BBD.B-T).
Here are the companies on Stockchase that are reporting earnings this week:
Aurora Cannabis (ACB-T) Feb 11
Not his favourite cannabis stock. They've diluted shares and are buying another company, which tells him that they're buying with stocks, not cash, which tells him that management believes their company is overvalued. ACB is very high compared to its peers. He's shorting it.
They just released earnings this week and they have been turning their business around -- increasing margins and growing organically. Management owns about 18% of the shares and it trades at 5 times earnings. He thinks it could trade at twice that level. They are involved in patient home monitoring. Yield 0% (Analysts’ price target…
SQI Diagnostics Inc. (SQD-X) Feb 11
Does rapid testing for clinical diagnostics. Has held in quite well. Going through an approval process and it looks like things will be okay. Leveraged earnings are pretty big. Likes the company but is not actively buying it.
Inmed Pharmaceuticals (IN-T) Feb 12
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…
For years NEPT was in partnerships where they were extracting Omega-3 oils from krill oil and selling that to consumers. Now they're taking that extraction technology and applying it to the cannabis oil market. He's in a wait-and-see spots. The fundamentals don't back the move up in the stock. He has a small short on…
Canopy Growth Corp. (WEED-T) Feb 14
Pots stock are valueless. He believes in 2-5 years weed will be legal all across North America and will be mass-harvested, like oregano and thyme. It'll become an industrial commodity. Guys growing it in hazmat suits in greenhouses will look ridiculous soon. These companies don't produce, can't meet current demand. Run for the hills.
Canadian Tire. Predominantly leased by Canadian Tire. Continues to be held 80% by Canadian Tire Corp. A sustainable distribution ratio of about 90%. If you look at single tenant REITs, the growth is not as good as a more diversified REIT. They should get 3% AFFO growth. If they developed on their redevelopment acquisitions it…
United Corps. (UNC-T) Feb 11
Clarke Inc. (CKI-T) Feb 12
Buying out of favour businesses that they feel have an intrinsic value. An interesting portfolio play that has broadened them beyond the original trucking business. Good management.
This was trading at a discount for some time, because it didn’t have exposure to the strong “Calgary” market and their debt was a little bit high. They brought their debt down and they still don’t have exposure to Calgary, which is a good thing now. There is some good growth in Halifax now. Also,…
(A Top Pick Nov 7/13. Up 26.76%.) Have some great assets in the Edmonton/Calgary area. These are rental properties, so there is lots of room to increase rents as it is a high growth area of the country. It will continue to see good growth and good increase in rents.
He favours this REIT. Doesn’t think it is going to cause anyone to jump out of their coffin. You might be fairly bored with it, but it is safe. He immensely favours Morguard (MRC-T) itself.
Never owned it, not because he dislikes it, but they're so large, it's hard to change what they own. For example, they bought then sold the U.S, and now they're buying Canada. He prefers SRU.U-T in the same space, but Walmart anchors them. In contrast, RioCan had to deal with the Sears and Target closings.…
This is known as the niche brick and beam landlord in Toronto. 40% of their properties are in the downtown core. The name has pulled back recently, mostly related to the pullback in REITs. Also, 10 year bonds are backing up a bit giving a bit of consternation in the space. The name has come…
Atrium Mortgages (AI-T) Feb 13
Choice or Riocan to sell? He sold Choice recently. It disapointed him. This was Loblaw that spun into a REIT. Choice just merged with CREIT which has seaoned management. He doesn't like Choice--it's decayed more than the REIT sector. It'll be a work in progress for a while. He would sell Riocan and hold Choice,…
One of the world’s most important real estate vendors. You just have this amazing shaving of the stock that provides opportunity. They have diversified currencies across the world. Just completed an acquisition in the Netherlands. It is a new issue but well held.
First Capital Realty (FCR-T) Feb 13
Retail focused, but it owns a lot of Yorkville and assets in areas of high income. They came out with a perfect quarter, raised guidance, and the stock dropped 5%, so he was buying aggressively that day. This is a rare opportunity to buy a very high quality high end retail at a very reasonable…
Manulife Financial (MFC-T) Feb 13
This and SLF have been diversifying. MFC is pushing their wealth management business and increasingly from the Asian market. He's gun-shy on MFC. He used to own it.
Diversified commercial REIT. Relative to other names in the same space, it is reasonable value. Can continue buying properties at higher values because financing rates have come down. Came out with decent results and shot up over last 4 or 5 sessions.
Smart REIT (SRU.UN-T) Feb 13
Loves it. Has long owned it. The typical Canadian has been in 3 of 4 of the stores they own in the last month. Very well-diversified. The death of retail (malls) has passed them well, and Smart has performed well.
(A Top Pick May 30/18, Up 3%) He liked it then and likes it even more now. Lifecos are a good defensive play at this time, especially when they are all so well capitalized.
TMX Group (X-T) Feb 13
This was facing concerns about NASDAQ coming into Canada and taking some listings, but to him, this is much better than Amazon in some ways, because they have all the shoppers and they have all the products. It is going to be very hard for someone to come in and take the listings. They finally…
They are fantastic asset managers. It has a great long term trend. You could buy a half position, knowing you might have to buy the rest lower. It has been a good position.
Fairfax Financial (FFH-T) Feb 14
Problem is we don't know what Prem's doing until he does it. Some things work, and some don't. Has always had difficulty figuring out what's going on with this company. It's supposed to be an insurance company, but it's not really. You're buying Prem, if you buy the company. He likes Prem, but if they…
A closed-end fund. Essentially, they are looking to own big stakes, almost like Warren Buffett style, businesses in India. She likes India a lot. It is one of the strongest stories.
All their real estate is operated reasonably. Commercial is holding up a bit better than residential. It had a nice little run while people got nervous with markets. The October drop might have scared some investors. Hold this one for income.
Rifco Inc. (RFC-X) Feb 14
A good trend with an uptrend. Support is at $50 and he expects testing at $60. But it is enjoying higher highs and lows.
[Caller asked about 'B' but BNN put up chart for 'A'] It is a fine company. He has been in it long term. It is inclined to go up a little. People holding it don’t usually go rushing out the door because of the tax year.
A great chart that continues to make new all-time highs. He'd buy it here. There's more upside coming.
Yellow Pages Ltd (Y-T) Feb 11
Convertible 8% 2022 Bonds - They always have owned the convertible not the equity. It is a restructuring story. They think it is better to be in the convertible because they have a good yield and it is ahead of the equity holder.
It had a very good run and had a bit of a dip here. The worst for Canada has been seen from an energy price perspective. The retail area is economically sensitive and hot hit.
It has come down a bit and so might be a buy. They have done a tremendous job growing the business over the years in the face of intense competition. Management does not see a slowdown. They made an acquisition of a fashion business but there are some synergies. It is not expensive but you…
D-Box Technologies (DBO-T) Feb 14
Powered seats for movie theatres. They have deals with companies like Cineplex, large market theatre chains. He likes the longer-term growth, but because it doesn’t get a whole lot of coverage, it is quite volatile. They have developed massive inroads in China, and just did a deal with a company who has to purchase so…
A developer brand in organic food space. Recently broke into Loblaw’s (L-T) and some other food chains. An acquisition driven story. They have quite strong organic growth of 20%+ a year, but will continue to acquire brands, develop them, and expand them from within. It is everything from baby food to pet food to drinks.…
Input Capital Corp (INP-X) Feb 14
There are always big expectations for cash flow coming from grains, and then it never actually comes. It looks like they are on the up and up now, but be careful because they could have some earnings misses as well. He wouldn’t own this until they could show that they could generate cash flows and…
🛢 Basic Materials
Canfor Corp (CFP-T) Feb 11
Despite a strong US housing market, overseas is not doing that well. There are a lot of people that have been caught holding the stock, and will start selling above $20 as soon as the price recovers. The stock is under pressure.
Canfor Pulp Products (CFX-T) Feb 11
First Cobalt (FCC-X) Feb 11
He doesn’t know their financials. The company is trying to revive a historic mining area in Ontario. This type of work takes a lot of money and might require First Cobalt to issue more shares, driving down the price. Alternatively, they might take on a lot of debt, which carries its own problems. Cobalt is…
Orvana Minerals (ORV-T) Feb 11
Has reduced his position but if he didn’t own he would be a Buyer. Trading at one of the cheapest valuations.
Belo Sun Mining (BSX-T) Feb 12
Nearly 4 Million oz in a deposit in Brazil. Continuity is very good in a cross a section, a long section and in depth. Going to be a nice deposit. A mid to major company should be buying it. Should be producing a bankable feasibility study in Q1 next year.
Lion One Metals Ltd. (LIO-X) Feb 12
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.
Looking at this right now. An absolutely tremendous payout. He doesn’t know the company well enough to Buy into it, but he loves dividends. This company is giving money back all the time. 9% dividend yield.
Taseko Mines Ltd. (TKO-T) Feb 12
Just announced a 70% increase in their mineral reserves. 7.7 million ounces of gold and 3.6 billion of copper. Extended the Prosperity mine life from 20 years to 33 years. It will be the largest gold/copper reserve project in Canada. Expect they will get a partner.
West Fraser Timber (WFT-T) Feb 12
He looks for trend reversals. He thinks this one might pull back a dollar of two from here before buying. He is looking to buy at $70 or below. There is a potential for $80 next January or February and he has an exit point of $67. It found good volume at its bottom. (Analysts’…
A new addition in his portfolio. It is large dimensional timber, with markets offshore. It has a good yield with exposure to a good management team and no debt. Yield 4.95% (Analysts’ price target is $2.53)
Acadian Timber Corp (ADN-T) Feb 12
Barrick Gold (ABX-T) Feb 13
Their attempted Newmont purchase was arrogant, but it worked out for them. They get the joint venture they wanted. It's synergistic. Management foresees more opportunities. Q4 earnings were up. Guidance shows higher operating costs and taxes--negatives. He needs to see the price of gold move, really break out. He needs to see evidence that ABX…
It's one of the few remaining income funds. They've paid $1.20 dividend since 2007, monthly. They had a tough 2018 with issues in a subdivision. They have a payout ratio of 62-90%. Pays a secure 12% dividend. Their strong management can turn things around. (Analysts’ price target is $12.38)
Kinross Gold (K-T) Feb 13
This has some interesting growth going forward. They’ve basically had to take lemons and make lemonade. Going forward, it is interesting to watch. He is waiting for the balance sheet to improve and getting more clarity on what is happening with their mine in Mauritania.
A smart group of guys. They are putting a fair bit of work into proving their concept is right. They seem to be backing up their thesis. It is looking like it is working so far.
They are traying to lower their debt. Some momentum above $1.20. It had a break out from 75 cents. Has a few places of resistance as t works its way up. A stock he is trying to acquire.
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.
They owned it, but got a technical sell on it. The declines can often be really severe. So they sold and switched into gold.
He would call this a Hold given the activity in the Québec Labrador trough. Have 2 excellent properties with a billion punt potential of iron ore in that trough. The problem is there is an excess supply of iron ore in the market.
Base metals, primarily in countries that he wouldn’t necessarily take vacations in. Higher risk environments, but from that you get higher returns. He prefers more stable jurisdictions. The company has decent assets that are generating cash flow. Also, they got $1 billion in cash on a recent deal which gives them some flexibility.
Goldcorp Inc (G-T) Feb 14
ABX-T vs. G-T. G-T is more the defacto go-to name. ABX-T does not have the growth any more. He thinks G-T has better assets. The problem with G-T used to be excessive valuation but that is not the case now.
Lundin Mining Corp. (LUN-T) Feb 14
He is a founding shareholder. He goes back with management almost 40 years. Over the last 10 years they have made a series of spectacular moves. He is attracted to the zinc and copper operations.
New Gold Inc. (NGD-T) Feb 14
Have access to high-quality deals, because of the quality of the board and management team. He is struggling to see the new leg of growth. Their Blackwater or Rainy River projects probably made more sense in a higher gold price environment. Rainy River probably has a better chance of eventually coming into a play that…
This is a hole in the ground, not a mine. They tried to make it a large mine, but it is a small one.
Silver is riding coat tails of gold. Thinks of gold and silver in the same vain. In last year, silver moved more than gold. He is bullish on both metals. It is over bought, but every gold stock is.
Winpak Ltd. (WPK-T) Feb 14
He really, really loves this, but has failed to pull the trigger on numerous occasions. A little pricey but a really well run company. Great value added packaging. Growing mostly organically. Buy on weakness, but it doesn’t weaken too often. You would hold this for the long run.
Yamana Gold Inc. (YRI-T) Feb 14
Keeps looking at it. He focuses on good management, low cost of production, good reserves on the ground, and geo-politically stable. It’s getting to point of generating free cash flow. Great job of putting things together.
Goldmoney Inc (XAU-T) Feb 11
They now have over $1 billion in terms of the value of the gold on hand. You are buying physical gold that this company is storing for you. They are also growing globally. Thinks the growth rate is going to be quite fast. He is interested both in the stock and what they are doing.
Continues to like this company. Provides connectivity software and hardware solutions in wide area networking. Tremendous growth. Expect them to earn $.10 to $.11 this year.
Shopify Inc. (SHOP-T) Feb 12
He added to his holding in the last quarter, still likes the chart. All software has had a correction in the past few weeks, but long-term rgowth stocks will move higher. (Analysts’ price target is $469.90)
Solid stock with a good dividend? He likes Computer Modeling Group (CMG-T) which does modeling for oil/gas exploration. Ways about 3% dividend but also has some growth.
It has been a core holding of his for a long time. They are extremely well run. They are run by a competent intelligent operator. They acquire software companies. When they are put on the world stage they shine. They are a bit expensive right now but one you should own. (Analysts’ price target is…
Sierra Wireless (SW-T) Feb 13
It has had trouble holding onto gains of late last year. He has a small short on this one. Valuation is not great. It is quite a volatile stock.
Tucows Inc. (TC-T) Feb 13
Just IPO'd a couple of months ago. Analysts have not yet put out reports. An interesting business model and feels they are going to be able to Blog the latest portion of their business but so far hasn't gotten traction.
Hanfeng Evergreen (HF-T), Hanwei Energy (HE-T) and Migao (MGO-T) are interesting plays into China. Have been crushed but give direct exposure to what he expects will be the strongest currency over the next 25 years. You are buying them with multiples of earnings (not cash flows) that are unbelievably low. Wants to look at these…
PrairieSky Royalty (PSK-T) Feb 11
(A Top Pick April 2/15. Down 16.23%.) Has been trimming his position. Valuation is rich, especially when comparing to a Freehold Royalty (FRU-T). Also, Canadian Natural Resources (CNQ-T) vended their freehold land and gross overriding royalties into this company for an almost 20% shareholder basis. They’ve given indications that they want to dividend half of…
BIR-T vs. CR-T. BIR-T has much larger production than CR-T. BIR-T is a large cap vs. CR-T being a small cap. He likes both companies and owns them. He does not have a preferred one.
Cenovus Energy (CVE-T) Feb 13
(A Top Pick Jan 18/18, Down 12%) It rallied on a bad report. He sold this pick in the summer and is now short on it. They have not delivered on the balance sheet enough and there is still not positive cash flow. It is a small short for him.
Tag Oil Ltd. (TAO-T) Feb 13
Just did a $65 million financing and the core NAV is about $1-$1.50, so there is a huge amount of froth built on oil shale potential they are promoting. A lot of downside risk and a low probability of success.
Encana Corp (ECA-T) Feb 14
It is at lower valuations like others in the space. It is about 3.5 times cash flow and announced a share buyback. 48% natural gas. If other OPEC players cut production then this one will do very well. But as a long term investor at these levels. It is very cheap.
Inter Pipeline (IPL-T) Feb 14
The petrochemical plant (now in year 2) is costing them several billion, but will add $500 million in free cash flow. (Analysts’ price target is $25.38)
Precision Drilling (PD-T) Feb 14
PD has done relatively well, considering the drillers have been hammered in this sell-off. Need to see this hold at $2.80. There's been heavy tax-loss selling in oil. Don't step until January. See if resistance holds.
Superior Plus Corp (SPB-T) Feb 14
Has a very small position in this. Great yield of 6%. The balance sheet is not a problem. Valuation is fine at 10X EBITDA. Missed on a recent quarter which is why the price momentum has rolled off. Probably not a terrible stock to own here.
TransCanada Corp (TRP-T) Feb 14
They do share buybacks, but TRP is a step behind its peer, Enbridge which has a stronger capital structure (i.e. discontinued its DRIP). With their growth projects, they're not out of the woods just yet. Buy Enbridge instead. Also, it's so difficult to build a pipeline in Canada.
Ceres Global Ag (CRP-T) Feb 12
(Market Call Minute.) Had an issue with the management contract that has now been resolved. Feels there is a lot of upside for them. Shipping oil now.
This is a funny one. The book value is $4.80. They started a few more projects in China. It is not for him, but he can see why somebody would like it.
Waste Connections (WCN-T) Feb 13
A good stock with a steady rise since 2016, accelerating this year. However, this may make it a pullback candidate, though not in bearish territory.
Bombardier Inc (B) (BBD.B-T) Feb 14
Not a fan. But people extoll its virtues. It is cheap, but she's not a fan of value. If you want to trade it, go ahead. But it's not a long-term hold.
Toromont Industries (TIH-T) Feb 14
*Short.* The only Caterpillar dealer in Ontario as well as having a small business in arenas. Have benefited for years from an increasing mining sector, and in Ontario it is primarily gold related, and gold miners are not doing that well. Also trading at a pretty hefty premium to the competition. A strengthening US$ means…
Telus Corp (T-T) Feb 14
Use this list wisely to identify buying opportunities.
Happy trading !!!