Canada Goose Holdings, Fortis Inc. and More Earnings Reports this Week (Archive From Feb 10-14)
Markets saw wide losses last week in response to the coronavirus and fears of its impact on revenues. Canada Goose Holdings (GOOS-T), who will be reporting earnings on February 13, slashed its revenue forecast in response. China’s stock market saw wide losses and the global impact is just starting to appear. Job growth data was positive in the United States but this was largely overshadowed by fear of the virus’ economic impact.
Important consumer stocks such as Restaurant Brands International (QSR-T), Shopify Inc. (SHOP-T) and Canadian Tire Corporation Ltd. (A) (CTC.A-T) will be reporting earnings this week. Acquisition target Cineplex Inc (CGX-T) will be reporting on February 12.
Dividend favourite Fortis Inc. (FTS-T) is reporting on February 13. In the energy sector, Husky Energy (HSE-T) is set to release earnings on February 11, followed by Enbridge (ENB-T) on February 14.
Beleaguered cannabis stocks Canopy Growth Corp. (WEED-T) and Aurora Cannabis (ACB-T) are also reporting this week.
Here are the companies listed on Stockchase who are reporting earnings this week:
Pizza is a challenging space and BPF doesn't execute as well as, say, McDonald's. BPF's 3-year chart shows it's still in a downtrend. The current stock bounce is an opportunity to sell, not buy.
Restaurant Brands International (QSR-T) Feb 10
He would be okay for the longer term as a hold, but it is a little expensive here. Tim Horton's is the largest segment and it is slowing. It will be a wait over the next couple of quarters he thinks.
Cineplex Inc (CGX-T) Feb 12
Being purchased? Why its trading over the $34 offer price is possibly due to short covering. There is a long period before the deal closes and Cineplex still has a chance of finding a higher bid. He would continue to hold it to tender and not sell.
Corby Spirit and Wine (A) (CSW.A-T) Feb 12
He owned the stock at one point. It is a cash cow. It is mostly a marketing company. The question has always been if the parent will privatize the company. They pay a good dividend but there is very little growth. Hang on if you are in it for the long term.
Corby Spirit and Wine (B) (CSW.B-T) Feb 12
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…
Shopify Inc. (SHOP-T) Feb 12
A hard one to call. Based on valuation it is at nose bleed levels; however, they are still growing the business and are one of the biggest employers of tech in Canada. It is hard to see a huge plunge for them. They should be able to continue the momentum.
Canada Goose Holdings (GOOS-T) Feb 13
Last time he was on in January he said it would go to $37 and it is at $36.01. His model price is $41. This was forecast before CoVid19. It now has fundamental value. He is looking at moving to a full position.
Canadian Tire Corporation Ltd (CTC-T) Feb 13
Iconic Canadian brand but operating in a very competitive space. Most products are AMZN-Q'able. They have the credit card business which brings in 25% of their earnings but it is essentially sub-prime lending. Loan losses are skyrocketing at a time when bankrupsies are skyrocketing. It is not timely from this perspective. They have been buying…
Canadian Tire Corporation Ltd. (A) (CTC.A-T) Feb 13
(A Top Pick Mar 13/19, Up 5%) OK company, cheap. 11x earnings. Competition from Amazon. But people still go there. Sportcheck is doing well. Stick with it. It will continue to do well despite e-commerce.
D-Box Technologies (DBO-T) Feb 13
It is getting pounded by tax loss selling. They have very valuable IP and a good installed base. It is worth more than it is trading for and he is urging the board to unlock some of that value.
MTY Food Group (MTY-T) Feb 13
Yellow Pages Ltd (Y-T) Feb 13
70% of their cash flow is from take or pay contracts. It does not matter what the economy is doing. A great defensive quality. Yield 3.71% (Analysts’ price target is $72.06)
Just Energy Group (JE-T) Feb 10
They sell energy contracts. They have under gone several management changes over the years. He is not a great fan of this business model.
H2O Innovation Inc. (HEO-X) Feb 12
Year-end is June, so June 2021 outlook offers a weak earnings estimate. Look elsewhere in small caps.
Hydro One (H-T) Feb 12
He buys utilities to generate income. Yes, they are boring, but this sector has had an incredible run in the last 12 months. This is overbought now and would take profits. Also, the yield has dropped to 3.3%, which is a negative.
Fortis Inc. (FTS-T) Feb 13
(A Top Pick Mar 13/19, Up 24%) Great company, core holding. Continues to do well. Yield of 3% plus, growing at 5-6% a year. Hold forever. Valuations are high, so probably won't be acquiring anything soon.
Caribbean Utilities Company (CUP.U-T) Feb 14
Fortis owns 60%. Challenge is that hurricane comes through every once in a while. Good system. Rates of return are higher than you can get in Canada. He owns Fortis
Transalta Renewables (RNW-T) Feb 14
It is a great company. They are better positioned now. It is about a 5% yield increasing at high single digits. It is an asset drop down model and he prefers companies that develop assets from the ground up.
CRT.UN vs. CHP.UN Choice Properties is the largest Canadian REIT. Strong management. Good pipeline, so no shortage of growth. Working to reduce leverage. Nothing wrong with it. Great company. Fairly valued, so better opportunities elsewhere. She prefers Canadian Tire, mainly on the valuation. More short-term upside.
TMX Group (X-T) Feb 10
They have a temporary CEO. The company is in the middle of transforming its business to add data and information technology. The stock has done well and it was one of the best performers in 2019. The balance sheet is good. He expects better things in 2020.
Clarke Inc. (CKI-T) Feb 11
(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…
Morguard North American REIT (MRG.UN-T) Feb 11
He likes it for being in multi-family rentals. It's challenged because it's controlled by Morguard Corp. Diversification is 43% in Canada, 57% in Canada. Nice dividend. Probably worth $22/share. But there's better value elsewhere like CAP REIT or BSR.
Noranda Income Fund (NIF.UN-T) Feb 11
There is no dividend. Sales are up but earnings are less negative rather than positive. Earnings growth forecast for this year is zero.
Choice Properties REIT (CHP.UN-T) Feb 12
Not on his target list. It trades at 14 times earnings -- pretty cheap. The balance sheet is a little more levered than he would like. Earnings growth is not great. If you think interest rates will not change and remain low, he would prefer others. A quality name though.
Colliers International Group (CIGI-T) Feb 12
A large company in commercial real estate. Barely pays a dividend, but offers an 11% free cash flow yield that's and growing 91% YOY. It trades at 8x trailing cash flow and boasts a big 25% return on capital in Q4. Earnings to grow 11% in 2020. (Analysts’ price target is $107.83)
First Capital Realty (FCR-T) Feb 12
Likes it even though he's not positive on retail. They own some of the best Canadian retail in Canada. Pays a 4.5% dividend. Owns some of the best Canadian retail real estate--a niche of grocery stores and pharmacies which are stable and sell necessities. Super managers. The overhang of the previous owner is fading. They…
Great West Lifeco (GWO-T) Feb 12
Likes it a lot and recommended it a few weeks ago as yields have been bottoming and flattening out. Yields will rise long-term, he predict, which will benefit lifecos like this. GWO broke its downtrend at end-2018, rose, hit a second bottom (a double-bottom) and is now accelerating higher.
Killam Properties Inc (KMP.UN-T) Feb 12
The multi-dwelling residential REIT space has been shooting up in markets like Halifax, Quebec and Toronto. KMP is making new developments. He likes this, but it's too expensive. Tailwinds (geographies) are working for KMP.
Manulife Financial (MFC-T) Feb 12
Chart shows a double-top of $27. Insurance looks good. Nice upward move since start-2019 in MFC. He doesn't know the fundamentals of MFC, though it got hit hard today in the global sell-off. He owns other insurers including Sun-Life.
Smart REIT (SRU.UN-T) Feb 12
This is a high quality, well managed company looking at re-development opportunities. He would not hesitate owning this one. They will make the best use of their properties down the road.
Sun Life Financial Inc (SLF-T) Feb 12
RY vs TD vs SLF? He owns both of the banks and he prefers this space over the insurance sector. RY has a stronger approach on the wealth management side, whereas TD focuses on retail customers and has a larger presence in the US. Right now he would favour TD. Canadian banks of been held…
A&W Revenue Royalties Income Fund (AW.UN-T) Feb 13
He likes A&W and royalties like these in general. A nice yield and good sales growth. They are marketing themselves as the healthy alternative fast food company. He thinks there are opportunities to expand further. Yield 5%
Atrium Mortgages (AI-T) Feb 13
Brookfield Asset Management (A) (BAM.A-T) Feb 13
If you've held it for the last couple of years, maybe it's not a bad time to take some profits. For him, cashflow is what is important for him. It is one of the core holdings for his portfolio at 5%. Infrastructure and REITs are well-hedged for any interest rate disruptions.
Fairfax India Holdings Corp (FIH.U-T) Feb 13
Populated by public and private investments in India. One stock he would tuck away for 10 years. India is the largest democracy, and corporate tax cuts have been encouraging. Fundamentals are looking great for India.
H&R Real Estate Inv Trust (HR.UN-T) Feb 13
Likes this REIT, a good way to play defence in this market that pays a good dividend above 6%. The multiple is under 12x, so it's cheap. A diversified REIT, too. You're paid to wait. However, their cash earnings haven't been growing. Over time, there will be FFO grow though.
Morguard Real Estate Inv Trust (MRT.UN-T) Feb 13
Apartments in Ontario and the US sunbelt. MRT is pretty illiquid, but has performed very well. She'd rather play Ontario and the sunbelt separately (i.e. Minto REIT for Ontario). They have a decent balance sheet so they can continue to pay debt and grow by acquiring. No headwinds here. Expect higher dividends.
Rifco Inc. (RFC-X) Feb 13
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,…
Industrial-Alliance Life Ins (IAG-T) Feb 13
Over the last year you have seen a significant growth. It is on his radar screen. The securities side and the banking side are both doing well. He would be interested if it pulled back.
CI Financial Corp (CIX-T) Feb 14
It's cheap and a pretty well run business, but the mutual fund business is not as good as it was 10-15 years ago. Fees in the financial services sector are under pressure. The long term challenges in the industry would keep him away from the stock.
IGM Financial Inc. (IGM-T) Feb 14
The family of companies are well run. There are headwinds investing in a mutual fund business. It rallied back recently and pays a decent dividend. The dividend is safe.
Trisura Group (TSU-T) Feb 14
A spin-off of Brookfield Asset Management. For every 170 shares of BAM-T one owned, they received one share of TSU-T. They underwrite smaller BTB insurance. They can sell-off re-insurance for a recurring fee stream in the US – a process called “fronting”. On paper it looks like they operate at a loss, but it will…
(A Top Pick Jul 27/17, Down 6%) Volatile. It's come down a lot, but there's a lot of upside ahead. Well-managed. They can make accretive acqusitions. Their problems integrating some businesses are behind them and they now have a strong runway ahead.
Mediagrif Interactive Techn (MDF-T) Feb 11
They own some very valuable eCommerce platforms. There is the supply chain business platform and one for businesses to interact with suppliers and consumers. (Analysts’ price target is $7.80)
Sangoma Technologies Corp. (STC-X) Feb 11
A growth by acquisition story. He sold in the Q4, though he wishes he still owned it. There's no big catalyst for this stock, but it will continue to perform.
Computer Modelling Group Ltd (CMG-T) Feb 12
They recently had a joint venture with Baker-Hughes (BHGE-N), where Baker Hughes is co-marketing one of their products. It would make sense for Baker Hughes to take over this company. Schlumberger (SLB-N) is the only company with a competing product. (Analysts’ price target is $9.50.)
Tucows Inc. (TC-T) Feb 12
A definite lid at around $85 and recently broke through. From a technical perspective that is very bullish. The chart looks pretty good now.
NexJ Systems Inc (NXJ-T) Feb 13
(Past Top Pick on April 26, 2017, Down 47%) Provides Cloud software to large U.S. blue-chip brokers. They make great software, but suffers from lumpiness in the size of the contracts they get. Suffers declining revenues and earnings estimates. He sold his holdings a while ago.
Sierra Wireless (SW-T) Feb 13
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.
PrairieSky Royalty (PSK-T) Feb 10
They reported results yesterday, which were pretty much in line with expectations. The corporate decline rate is 19%, which is manageable. He likes the management team. However, with a low beta to oil price recovery, he is looking elsewhere.
Husky Energy (HSE-T) Feb 11
The problem with this sector is divestment by pensions, for example, though Husky is in the top tier of companies.
Birchcliff Energy Ltd. (BIR-T) Feb 12
TOU is too high of a natural gas exposure for him. BIR is overspending their cash flow to fill a plant they invested in for the promise of free cash flow next year. If you believe the strip pricing next year, they will generate a 26% free cash flow yield. However, it is also natural…
Cenovus Energy (CVE-T) Feb 12
Tag Oil Ltd. (TAO-T) Feb 12
(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.
Gear Energy (GXE-T) Feb 13
They have done some good acquisitions and they have heavy oil exposure, but the liquidity is just too slight.
Ovintiv (OVV-T) Feb 13
Not a big lover of energy. Owns SU and CNQ in Canada. In the US, he owns no energy. It doesn't matter which side of the border you're on, energy companies are out of favour.
They bought all the other publicly trading trucking companies. It is a low organic growth business but they did 80 acquisitions since 2008. It trades at a 40% discount to the large US trucking companies. (Analysts’ price target is $54.44)
Rogers Sugar Inc (RSI-T) Feb 11
Doesn't think dividend will be guillotined. Disappointing because it doesn't grow. Sugar is not a growth business. It's not a growth stock and probably never will be. Hold and try to trade it at the middle of its range.
Toromont Industries (TIH-T) Feb 11
The long term price chart is amazing. Management has been very disciplined. It comes down to how you feel about the economy as this is a cyclical company. His view is that fiscal stimulus will be forthcoming, so his view would be positive. A good name to hold over the long term.
West Fraser Timber (WFT-T) Feb 11
Doesn't buy forest product companies as they're very cyclical. Pricing is sensitive to demand. Cyclical sectors are out of favour as we're late in the cycle, and economy is soft.
Boyuan Construction Group Inc (BOY-T) Feb 12
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.
Finning Int (FTT-T) Feb 12
He'd never buy any stock that's falling--in a strong market. If the market weakens, this will get even weaker.
Mullen Group Ltd (MTL-T) Feb 12
Convertible bonds with a 5.75% coupon They own a great base of real estate. The debt issue is a small piece. The bond is well-covered. MTL.DV-T. You get a 6-year option on the stock within the bond, with a $14 convert price. If oil recovers, these bonds will convert into equity. Until then, collect then.…
Aurora Cannabis (ACB-T) Feb 13
He saw the bubble coming in cannabis. Take a look at the financial balance sheets and see how much money they owe. He owns one company in the space that also owns liquor stores. You will see more companies go under in this space. He only buys companies that have been around for 10 years.
Burcon Nutrascience Corp. (BU-T) Feb 13
Plant based protein from soy and peas. The new method for extracting protein will be used in a new plant in Canada. They have well over 100 patents related to protein extraction from various plants. The plant will go into production at the end of 2020.
Chemtrade Logisitics Inc. (CHE.UN-T) Feb 13
He does not like really high yielding companies. Often it is a signal that something is wrong -- it is just too risky. He would avoid it. Yield 13.5%
Chorus Aviation Inc (CHR-T) Feb 13
If coronavirus affects Air Canada, it might affect them to some extent, but not significantly. Dividend is OK. Yield is 6.2%. (Analysts’ price target is $9.38)
Precision Drilling (PD-T) Feb 13
There is a base level of activity to just maintain production. The stock price is already demonstrating a poor drilling season outlook. They could privatize the company in 2.5 years on current cash flow. An outlook for $60 oil will lead to an uptick in drilling activity from here. Yield 0% (Analysts’ price target is…
TC Energy (TRP-T) Feb 13
Core holding. Trades at 18x earnings. 5-6% in both earnings and dividend growth. 30B worth of projects being built, and another 20B to come. Yield is 4.26%. (Analysts’ price target is $73.85)
Canopy Growth Corp. (WEED-T) Feb 14
They each have their own strengths. He would pick Canopy (WEED-T) because they are the 800 lb gorilla. Aurora has lots of news about balance sheet challenges but they have low costs that he thinks will still come down further.
Enbridge (ENB-T) Feb 14
(A Top Pick Apr 16/19, Up 18%) He likes Enbridge, and most pipelines and utilities. Anything with solid infrastructure will have earnings and will pass through inflationary costs. He's never questioned the dividends. A solid company.
🛢 Basic Materials
Trilogy Metals (TMQ-N) Feb 10
Belo Sun Mining (BSX-T) Feb 11
He sold it. They operate in Brazil, but let's see where political changes go there; things can get nutty down there once in a while.
Russel Metals (RUS-T) Feb 11
He doesn't like the base metals yet. The price of copper as a barometer hasn't shown any movement. He has to see what will happen with the global economy. Once copper rises above $3.00, he would start looking into it more.
Western Forest Products Inc. (WEF-T) Feb 11
The deep cyclical are the place you want to put some money. It is so beaten down. It could fall another 50% but once we get CoVid19 under control, these deep cyclicals could have 300-500% gains. This is where the value is in this market but you need patience. He has never seen an opportunity…
Acadian Timber Corp (ADN-T) Feb 12
Lumber company with a good dividend and low payout ratio of 70%. The dividend looks safe. He does not expect a lot of capital returns. There are some cyclical risks with housing markets. There are 45% owned by Brookfield. A good income holding. Yield 6%
Barrick Gold (ABX-T) Feb 12
(A Top Pick Feb 11/19, Up 37%) Gold has leaps to go and government balance sheets are not getting any better for sure. The US president is getting more desperate to get re-elected and to would want to inject more value into the currency. Inflation is low. But cost of living in many US cities,…
Kinross Gold (K-T) Feb 12
The earnings were good. He just doesn't like these big companies. He has done better with the other producers. He would go with Agnico that presents a better value. (Analysts’ price target is $9.25)
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.
Agnico-Eagle Mines (AEM-T) Feb 13
There has been equipment problems in some mines they are building. The beauty is management's execution that is great. They keep raising dividends. There is a massive leverage to the price of gold. They are producing at below $600CAD. They have large margins. He keeps it to 5% of his portfolio.
Sherritt International Corp. (S-T) Feb 13
Yamana Gold Inc. (YRI-T) Feb 13
If you buy just YRI you have jurisidictional risk (i.e. a country can change the royalty suddenly). Also YRI has had a pretty good move. Buy GDX instead, an ETF.
AirIQ Inc (IQ-X) Feb 11
Telus Corp (T-T) Feb 13
Significant equity offering. Will have lots of 5G spending in next 3-4 years. Dividend is safe. Will continue to increase dividend, though dividend growth is slowing as with all telecoms. Yield is 4.5%.
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…
Use this list wisely to identify buying opportunities.
Happy trading !!!