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
It is looking at getting a wider demographic and the US is a good place to go. There are costs with their listing in New York, but they don't have to worry about money. Things could go quiet in the cannabis sector for months.
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
Canopy Growth (WEED-T) vs Aurora Cannabis (ACB-T) The battle of the titans. Both companies do good things. He favors Canopy as it has a lower risk diversified growth strategy in 12 different facilities. He also likes the deal with Constellation for further diversification. Aurora is expected to grow with the expansion of the new facility…
Has some good potential. A little expensive at the $11 range, but on any pullbacks, he would Buy. 5.86% dividend yield.
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.
A really good growth name at a reasonable price. Has had a big run since January, but there is more to go. He models that it grows 10% annually for the next couple of years. That growth rate is much better than the sector average of around 4%, and yet this is trading at an…
(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.
He only owns one REIT -- in international healthcare. He thought with interest rates going higher, the valuations are possibly going to be too high.
(A Top Pick June 23/15. Up 13.18%.) Usually an outperformer, but the market has been up at the same time by about 11%. Has added more just recently. Still has growth going forward. Very urban focused, Class I office with retail components.
Atrium Mortgages (AI-T) Feb 13
A spin-off from Loblaw; most properties are Loblaw locations. The interesting is the merger with another REIT. Good thing is the wider exposure to other sectors, but the bad thing is losing focus from the grocery retail sector. Overall, the merger is a good thing--it's a more liquid company. Over time, should see higher multiples.
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
(A Top Pick Jul 16/18, Up 7%) He still recommends it and the insurance space in general. It trades just over book value and has a yield of 4%. There is good growth in Asia and they have expanded into Euroasia as well. A well run company that has managed well since the 2008 crisis.…
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
Mitch Goldhar was the founder who transformed SMART, the main landlord for Walmart. He's come back to execute and go up against Amazon. They are doing an amazing development north of Toronto. This has a chance to grow. It has one of the best lead tenants--a good anchor. It's best in class and a core…
SLF vs. MFC MFC is the trading stock vs. SLF is the holding stock (more than a year). Long-term, SLF has a smooth chart, and MFC has been jumpy--but you can make money on those big swings.
TMX Group (X-T) Feb 13
How does this make money? They make money a variety of ways. Listing fees, trading fees and fees for information. You are seeing more of a global consolidation in this industry. At these levels, he feels valuations are somewhat excessive. This has had a big run in the past 2 years.
When will it go below $60 for me to buy it? Maybe never. Sometimes just buy a stock and don't wait for it to pull back; the stock could keep rising. BAM is one of the best stocks out there. Pension funds and endowments love these infrastructure stocks with steady earnings for a long time.…
Fairfax Financial (FFH-T) Feb 14
Will it break out of the trading range of $5.50-7.70? You're buying Prem Watsa when you buy this. Prem has done some brilliant things, and other things that weren't. He's not Warren Buffett, though. He's not attracted to the underlying businesses.
An actively managed basket of Indian stocks. There is higher cost from the active management and from an index ETF. In the long run the currency has dragged a little on your returns. He thinks it will stabilize going forward. He thinks this will be a fantastic growth area of the world.
At these levels the valuation looks attractive. The dividend is safe. They don’t have as high a dividend growth outlook as other REITs though. A good hold for a diversified portfolio.
Rifco Inc. (RFC-X) Feb 14
The Goose soared in early 2018--an incredible chart. But it got ahead of itself after mid-2018 with lower highs and lowers lows, which is a bearish trend. Wait until the stock settles in the fall and breaks out of this downward pattern.
It has been a story where he looked at it a year or so ago. It is a bit expensive on a multiple basis but someone will probably come along and take it out in the future. He would hold it if you own it. They try to make acquisitions of smaller brands from time…
New leadership has cleaned up the battle with franchisees a few years ago. The last CEO ramped up Horton's same-store sales growth. This organic growth will continue as well as acquisitions to come. (Analysts’ price target is $93.67)
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.
This is a conservative fund. They take top line sales from restaurants and pay out as a distribution. It got beaten up recently on interest rate concerns. Two of the last three quarters’ sales showed slowing same store sales growth but then were up most recently and are now they are now one of the…
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.
One of the better retailers in Canada. Big shift has come in. Everyone's playing catch up to Amazon and online sales. A great company, but the world changed around them. Not looking for bricks and mortar retail players on his team. A challenge for growth.
D-Box Technologies (DBO-T) Feb 14
Has always been skeptical about the D-Box technology. They have had some success in China of late, which is why he thinks the stock has popped.
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
(Market Call Minute.) Lumber is probably the poster child for seasonality. The time to own is going into the 4th quarter. There has been some improvement in housing which favours lumber producers, and this is one of the best suited. He would look toward September.
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
It peaked in early June and fell to $80, breaking a strong 19-month trend. The early-August low fell along with commodoties as a whole. It'll likely continue to fall.
They are more into cedar and it is not a commodity. A slowdown in the economy will cause reduced cedar usage. In the $2 range it is very attractive.
Acadian Timber Corp (ADN-T) Feb 12
Barrick Gold (ABX-T) Feb 13
He likes the gold generally speaking. They are heading higher because of the fiscal situation of the US, Europe, Japan and increasingly China. So he thinks a 10% to 20% of the portfolio should be on gold or gold stocks as a defense mechanism.
Over the past decade their earnings have gone down and the debt remains high. They reported an awful earnings quarter and the stock has plunged. He is not interested just yet. Yield 9%
Kinross Gold (K-T) Feb 13
It has a distinct downward trend. Seasonally it goes up in February and again in July. Wait until it shows a base pattern before making a major commitment. Be patient. It is not there yet.
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.
He is not a resource bull normally, but he likes restructuring themes. The base metals area has been unloved and under owned for a long time. Lows on the sector have been increasing since 2015. This group is set up to do quite well. He prefers RIO-T. The risk reward is very, very good. TECH.B-T…
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.
It has risen to the forefront to be a go to. They are global. Their primary exposure is to copper and is a leveraged way to play a recovery in copper. Keep in mind it is leveraged so it will go the other way just as far if copper drops.
Goldcorp Inc (G-T) Feb 14
The chart isn't wonderful. Gold, the commodity, has been picking up. Gold itself looks like a reasonable short-term trade. The producers don't always follow the commodity, and Goldcorp is a good example. It has lower highs, and lower lows. It could be a short-term trade, but he wouldn't expect anything more.
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…
Palladium is a commodity that is mostly used for catalysts for certain types of automobile engines. Prospects look very good with a global recovery in auto sales. He is quite bullish on palladium. There are not a lot of ways to play this metal except through this company. Company hasn’t executed very well in terms…
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
(Market Call Minute.) He loves this. A great solid business that you could own for the next 20 years, but it won’t be around for that long.
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
It's gone up so much that it's natural to have a pullback now, down $10 today. He can't see a specific reason, likely profit-taking. It is expensive. He wouldn't buy it now. SHOP needs to pullback to $350 before he steps in.
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.
They have done well over a long time period. He thinks it may be over valued right now. Without a sizable dividend, he is staying away. With a marketcap of $23 billion, they need to take on bigger and bigger ventures.
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…
Small Cap Oil Names. The sector has been about as bad as it has ever been. CNQ-T or SU-T are preferable. There is debt, transportation issues, tax loss selling and no new money coming into the sector. There is no motivation to buy. Avoid the small companies. Perhaps look into the US at large companies.
Cenovus Energy (CVE-T) Feb 13
He likes this company. You get very good exposure to WCS differentials. The new CEO is doing a good job of repositioning the company. There is the potential of further monetization of assets. Good entry point to get good exposure with a large cap Canadian stock.
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
High trade volume? She does not hold any energy producers at all right now, due to the takeaway issues and low commodity prices. Their $5 billion acquisition of Newfield turned the market off. The apathy in the market is not attractive to her as an investor.
Inter Pipeline (IPL-T) Feb 14
Good for a retiree needing income? He sold his stake a few quarters ago. It's a consistent dividend payer and the yield is safe. Yes, it's good for retirees, but there is better share price growth elsewhere. Their new propane facility should add $600 million to EBITDA profit when it comes online at the end…
Precision Drilling (PD-T) Feb 14
He hoped they would merge with TDG.UN-T. He had TDG.UN-T on his action alert buy list. Now you have to decide what to do. PD-T is paying down debt but it is still high. The balance sheet is strained The stock price is now washed out enough that he is taking a little bit more…
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
She prefers to own ENB-T, but thinks this stock will do well. The dividend is safe. But it is getting more difficult to build pipelines. There is no compelling reason to shift over just yet.
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 little over priced. He has a target price of less than $90, so he is cautious. He would prefer a pullback to $80 to add to any holding.
Bombardier Inc (B) (BBD.B-T) Feb 14
A head-scratcher. Tech analysis doesn't work with this. You gotta believe the story. They don't deliver on their contracts and it should be a much-higher stock. That said, he'd buy; it's so cheap now.
Toromont Industries (TIH-T) Feb 14
Finning (FTT-T) or Toromont (TIH-T) for long-term growth and dividends? This area is a little tough right now. Industrial equipment has been pretty beaten up in the last few weeks. He would prefer Finning, which has the oil Sands in Alberta as well as South America where they have a ton of mining. Toromont more…
Telus Corp (T-T) Feb 14
A good income stream? He owns Telus instead of Rogers. He is studying the whole rollover of the wireless business in Canada. Prices are starting to drop on increased competitive pressures. It might be early to enter the space. He would prefer BCE-T or T-T.
Use this list wisely to identify buying opportunities.
Happy trading !!!