New 52-Week Highs and Lows (Nov 21-27)
This week’s new 52-week highs…
Thomson Reuters is still going up this week but very few Canadian stocks are reaching their 52 week high. Most are in the lows territory. Still the stocks below touched new highs.
👨👦 Human Resources
He looked at it recently. They run a core recruiting business in CEOs/CFOs, and launched a new division in mid-market recruiting like middle-management. The latter has been growing well. Shares have ripped higher then come down. He's watching this for another quarter or two.
Very good company that has owned for years. Recent A.I. acquisition good for business. Trading at high valuation. Would be good for long term investors.
Aurora Spine (ASG-X) TSXV
It was all " gung ho" about 2 years ago. It is difficult to find out what is going on. Management have been rather shy for a long time. Overall revenues have not risen dramatically for a long time. There are a lot of competitors. He needs to look more closely into the company.
A tricky one. Have a very small mine in Ireland that they are trying to put into production as well as a small jewellery division. There is no clear indication of what they are trying to be. Gold deposit is very small.
Stock vs. Stock. FIE-T vs. CMR-T. CMR-T is a money market fund. FIE-T is a multi holding income strategy holding all kinds of assets, so there will be more volatility. When markets are up go into CMR-T and FIE-T when they are down.
It’s slowly moved up from $28. The pullback is a natural phenomenon after the pop. Lots of volume. He would buy it here.
HR.UN vs. AX.UN Doing its best to diversify into multi-family residential apartments in US Sunbelt, where supply is high, so operating income will be challenged. Execution story in a difficult environment for selling or transitioning assets. A hold. Discount to NAV, but headwinds to fundamentals. Still, prefers it to AX.UN.
Pattern Energy Group (PEGI-T) TSE
A good dividend play. The yield is at 4.6%. People tend to focus on the tech side of green stocks, but this has utilities that have consistent income. They are a potential takeover target for Brookfield so the price has recently shot up. Could get decent returns.
This week’s new 52-week lows…
A wide range of Canadian stocks continued their drop into their 52-week low. Some stock expert’s favorites are among the list this week : Russel Metals, Crescent Point Energy Corp and Petrus Resources Ltd in the Basic Materials category. Dollarama Inc., Spin Master Corp., Cineplex Inc. and Power Corp. are dipping further with Cominar Real Estate Inv Tr (CUF.UN-T) all reaching 52-week lows.
Here’s the full list :
AGI vs. FVI Likes both, but slightly prefers FVI, since it's so deeply out of favour. He's less conscious of political risk than most investors. Both are well run. Both have successfully brought Tier 2 deposits into production on time and on budget with efficient operations.
Just completed an expansion. A bit more debt leveraged. Fortunes rise and fall with copper, especially with a recession scenario. China's problems aren't helping. Should be back to $3 in next 3-6 months, $4 in a year. Operational issues in Q1. Second half should improve. Sit tight. You could dip your toe in Q4.
(A Top Pick Dec 15/20, Up 12%) Taken over. He got out when the deal was announced, as the acquirer wasn't somewhere he wanted to put his money.
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.
Gold is supposed to be the inflation hedge, but that hasn't happened. He owns no gold, because it pays no yield. Gold is a personal preference. Owning a little is fine, but in bars to be stored in a bank. Don't buy the funds, because you must pay a fee.
Forestry space He owns no names. The stocks are okay but face trade disputes and an economic slowdown that will hit housing stocks. The stocks have been beaten up.
(A Top Pick Dec 13/22, Up 19.2%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with ELD has triggered its stop at $13.50. To remain disciplined, we recommend covering the position at this time. This will result in a net investment gain of 19%, when combined with our previous recommendations.
Likes management. Note that there is nothing immediately happening. It’s not something to chase, but just accumulate over the summer. Turkey is not bad at all, it is a democratic system. Their mining code is working. He thinks they have permitted 10 mines in 10 years. This company is technically very, very competent. Sitting on…
Hold until sale to Equinox, or buy more? He holds both to benefit from long-term effects of inflation. He thinks the takeout is great. EQX is well run, a buy, with a $12 price target.
It is well positioned for an increase in demand for infrastructure spending. In answer to the caller's question, don't switch it for an energy stock.
They make envelopes and have 90% of the market in Canada. It is very profitable with massive pricing power. Although there is a slow decline in envelope use in Canada they have a pretty good share of the market in the U.S. which is growing. It is also diversifying by buying small niche packaging companies.…
(A Top Pick Oct 23/19, Up 10%) A bit of a lagger but he continues to like and hold it. They had some Covid issues but everything is coming together, especially with their leverage. They stayed alive during the worse by mining low grade. They have started mining high quality gold.
Agnico-Eagle (AEM-T) came in a while ago and made a 9.9% stake in this company. The stock went up, but it really hasn’t done much since then. Then Barrick (ABX-T) came in and said they really liked the deposit and wanted to do a joint venture. This is a much better approach that is better…
CCL.B-T A great label maker. A fantastic story over the years. He would never recommend selling it. You also have IPT-T and have been selling weak with all the hurricanes in the last weeks. They create a lot of value but there is better value with IPT-T. He holds this over CCL.B-T because IPT-T are…
The Barkerville district has a lot of prospectivity. Their individual drill results are excellent but under the control of the Osisko company. He doesn't own it, because has a hard time getting the drill holes to tie together. That said, the district has a lot of promise and the exploration team is strong. The stock…
GMV Minerals (GMV-X) TSXV
Thinks there is another mine in this company. This is a story that is going to unfold and he likes it.
It’s a tough deposit. Erratic mineralization with the Uranium. He doesn’t think a lot of the deposit. Prefers others.
Would consider selling stock given strength. Doesn't think Entropy is a strong business model (baked into energy price). Stock is expensive without Entropy value. Better names in sector.
Their debt has always been an issue. Trading at in-line levels for their multiple. Does not check his boxes in his fund.
Oilfield services firm that has big fracturing technology presence. Horizontal drilling and shale boom not as strong. Very dependent on energy prices. Lots of assets that must be carried on the books. Not investing at this time.
Spending more money on a project, free cashflow won't be for 2 years, and market's attention span is very short. Concern they'll be burning cash to pay the dividend. Balance sheet indicates sustainable dividend, unless oil price really nosedives. Insider buying. Too small for him. Yield is 10.5%.
(A Top Pick Jul 13/23, Up 8.5%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with CNQ has triggered its stop at $83. To remain disciplined, we recommend covering the position at this time. Combined with our previous recommendations, this will result in a net investment gain of 12%.
It has had a recent drop with the acquisition. The basing pattern interests him especially if the dividend holds, but he prefers Pembina Pipelines and others in this space,.
One of the largest fleets of generation 3 and 4 deeper coil tubing. Two businesses: coil tubing and tools. Both are being run efficiently. Margin pressure in the sector. Great little story that will be a big beneficiary of LNG drilling. No debt. 5-year bull market target of $3. 2023 will be a pivotal year…
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. KEL has strong drilling activity and currently no debt. We have KEL in the growth model portfolio, and we like it for its diversification benefits, being in the oil and gas sector. It is a strong name with a good balance sheet and healthy profit…
Utility style company with reliable dividend. Lots of share issuance - a concern. Better options for investors in markets. Lots of a debt impacted by rising interest rates.
Has gone sideways as it consolidates. Been challenged in western Canada because oil prices are down, but will rise in 2024. MTL still has great funda mentals.
Stockchase Research Editor: Michael O'Reilly We again reiterate NVA as a TOP PICK. Recently reported earnings showed the company has reduced debt by 43% over the year, achieved record high production, and bought back shares. It trades at 6x earnings, 1.3x book and generates 21% ROE. We recommend trailing up the stop (from $10) to…
Companies with challenged balance sheets (high debt in this case) face difficulty in banks continuing to finance growth. He would not own this one.
They have two plays. It is pressured because of debt load. Production came down in the third quarter and should now increase. They should knock debt down with the sale of two non-core assets next year. It needs a catalyst before the market will revisit this story.
Doing the right things: modest growth, maximum free cashflow, pays a dividend, aggressively buying back stock. Would be a core holding if it weren't for the jurisdiction. Compelling value, trading below 3x with free cashflow yield 16%. There are better opportunities for capital appreciation.
For full disclosure, she is on the Board of Directors of Blackpearl. International Petroleum has made an offer to acquire. It is expected to close in mid December. She would not be buying a stock that may only be around for a few weeks. Management is very strong and will be going to International Petroleum.
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research At 8X forward earnings and with investors/analyst attention seeming to increase, we don't think much has to change here. As always, we would use prudent portfolio principles around trimming/re-balancing to limit a single company becoming too much of a portfolio but do not think it…
One of the more conservatively run oil service companies. A smaller oil service business. He likes some of the stuff they do in their rig matting and gas compression businesses. They have an acquisition strategy, and in this environment they may see some opportunities that could be accretive to shareholders. Balance sheet is pretty clean.…
(A Top Pick Apr 26/23, Up 48%) Outlook quite strong in terms of well servicing, you can go back in and re-frack to improve productivity. Nice, strong upward bias to fracking services and intensity of services. Nice yield.
(A Top Pick Jan 27/23, Down 19%) Awful. Finally hit numbers for the first time in modern history. Management's motivated to make sure execution continues. Trading at 3x $80 oil, 21% free cashflow yield, paying down debt. 68-114% potential upside at $80 oil.
Slight premium to other names. Overhang is its promise for M&A activity, likely to happen in 2024. 40-50% potential upside from here with $80 oil. Yield is 7.6%.
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research EPS of $0.11 missed estimates of $0.13 and revenues of $42.41M missed estimates of $44M. Its FFO increased by 29% against the previous quarter, and its operational efficiency improved by 3% in average production. It demonstrated drilling cost reductions in the quarter, however, against the…
This had been on his Short List of about 10 companies. There is absolutely nothing wrong with it. He thinks you could get an 8%-10% rate of return. It just didn’t seem to have that key catalyst driver that could make it exciting. (See Top Picks.)
A behemoth in the Montney region. Good cost control, highly regarded management. Close second to TOU, always one of his Top Picks. Pretty good performance relative to peers. Be patient. $25 would not be difficult, especially as LNG builds out in Canada and prices firm up globally.
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…
Not a good investment with current management team. Other energy companies available with better opportunities.
Very smart CEO. Hunting for an acquisition. Until that happens, he prefers other names. Trades at 3x at $80 oil. Only 7% free cashflow yield, as they are pursuing growth. Not the most liquid name, tough to buy.
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research We think it is buyable for income and some growth. Results missed estimates, but it still confirmed EBITDA guidance. Based on consensus estimates. EPS is still expected to rise quite nicely in 2024. It needs to execute on this growth, but lower/peak interest rates should…
Uses intellectual acumen to stake prospects, mainly in the Athabasca Basin. A uranium explorer, which tend to move later in bull markets but more dramatically. If they're successful in the next 6 months on farm-out deals, he's likely to buy in. Has done well in past uranium bull markets.
Has been really hurt by the execution of this very difficult play they are in. Company is going through some high costs, to make sure this very extreme area in northern Alberta, is all pipelined in. There are good reasons why two very, very good, smart, rich people have got ownership of this company. He…
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Debt becoming a concern. Delivery and take-out only sources of sales. Special dividend paid this quarter. Dividend reinstated at a lower rate.
Alcanna (CLIQ-T) TSE
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. No longer backed by Aurora. Multiple attempts to redesign stores. Multiple products sold at steep discounts. Deteriorating margins.
It's never done anything and has disappointed shareholders. He owned shares 10 years and sold it because he got fed up with its lack of progress.
Stock recently hit record highs. Has been buying on weakness. Is a very strong business. Expecting growth from price increases and store count increases. Would wait for share price to fall before buying.
This has great assets globally. The biggest sourcing platform for organic foods. It is really hard to get an organic designation. It takes 3 years for a farm to convert. They spent a lot of time putting together assets and it hasn’t been managed well. The company did a strategic review, brought in an investor…
Depends on growth rate. One thing they've struggled with is future growth. He needs to see serious levers for growth that make sense from a risk/reward perspective.
Covid hammered them, while a British company tried to buy them but aborted that deal (now in a lawsuit). It's not cheap seeing a movie, but he goes now and then. Movies are coming back, though. You can't duplicate the experience at home. Still a lot of uncertainty with this stock, though.
Reitmans (RET-T) TSE
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. There are no analysts/estimates for RET.A, insiders owns around 57% of the company. 4Q sales increased by 11.4%. Marketing helped store traffic but higher costs and macro headwinds hurt the quarter.Comparable sales rose 12.7%, with e-commerce sales 34% of the total. The 4Q profit was also…
We've reached the tipping point where we're sick of really dirty oil. But don't get greedy with this now. Can't recommend buying it at current levels after such a big run.
This ETF tracks Canadian oil prices. There is only $9 million of capital in this fund – be very, very careful.
Why such a large correction? Preferred shares are a big part of this fund, and they took a hit because of higher interest rates.
HPB Energy Bull+ ETF. Immediate leverage to oil price moves. If you have a very good near-term bet that you want to make on oil this would be the way to go but if you are looking for an investment in the oil patch that has a long-term investment implications, then you should go to…
He would rather have direct access to floating rates. In Canada there are very few original floating rate preferreds left. One of the highest quality is the Brookfield BAM Preferred B or Preferred K and generally they are in the market and trading 17, 18, so they are at a big discount to their par…
Preferred share market is risky - not a good place for average investor.Not much upside with lots of downside risk.Income oriented investors have better options.Canadian Dividend Index a better product.
(A Top Pick Jan 24/23, Up 5%) Energy shares struggling first half of 2023.Not a good pattern for investors. Has sold shares.
(A Top Pick Jul 25/23, Down 5.4%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with ZPR has triggered its stop at $8.40. To remain disciplined, we recommend covering the position at this time. This will result in a net investment loss of 9%, when combined with our previous recommendations.
(A Top Pick August 8/17, Up 8%) This holds what’s left over from the XIU 60. Wanted to get into some smaller stuff to get better diversification, and focus on this rather than the broader-based indices.
Fate of energy sector directly impacts success of company.High exposure to energy industry through lending.Does not own shares - too risky.Large Canadian banks better for defensive investors.
AX.UN vs. HR.UN In the midst of trying to decide on its strategy. Strategic review. Outcome uncertain. Challenging market in which to sell non-trophy real estate. Show-me on execution. Higher risk.He'd own HR.UN over this one.
Interesting transaction. Takeover at a discount, which is atypical and disappointing. Hard to assess this deal, not enough detail.
They own U.S. hotels, a high-risk, high-reward stock. He's bearish on hotels, which is struggling with labour costs and keeping labour. HOT.UN has done a good job restoring vacancies, in the low-70s, though their peak was in the 80s. However, they've made up the balance on their hotel rates. Their balance sheet is slightly higher,…
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.
A unloved stock since the founder died, but they have good assets while high interest rates have been a boom for insurance companies. The NAV is 25-30% higher than the stock price. Pays a 6% dividend.
Blockchain miner. Blockchain is like the internet in 1995-96. Once it gets going, you can't stop it. Technology moving forward is diversifying. Investors can participate in the building of the network. $20 target. No dividend. (Analysts’ price target is $22.99)
They had a project where they had lent out some money to the big Urban Corp. real estate company, which defaulted on their loans. Fortunately, the loan was secured by some real estate. Terra Firma just announced getting full repayment of the principal plus interest for that property. Now it will be a function to…
Does not own stock of company, as unsure what cryptocurrency future is. If crypto prices remain strong, will be good for company. Hard to value company.
Uses their GPS system to figure out where trains are, and to more accurately schedule trains and service vehicles for people working on the rails. Reported on Aug 14 and earnings were down 10%. That was against a 32% increase in sales. In the coming quarter, earnings are expected to be down 75% year-over-year. Great…
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…
They are doing distinctive infrastructure, where they are digging trenches to get that last mile to the home. They are doing this in the UK, and have a large contract with one company. He really likes the story, but is waiting to see some revenues and earnings drop to the bottom line over the next…
A play on where the next bull market's going to be, and that's going to be cyclicals. A cheaper valuation within the group.
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Buses may be electric, CNG, or clean diesel and electric buses are offered by the company. Over the past five years, sales have shrunk by a compounded annual growth rate of 14.5%, while EBITDA and Net income have grown at a CAGR of more than 100%…
Extendicare Inc (EXE-T) TSE
He's looking at the space, which is attractive. Off the highs. Business is materially tougher, but we need it. Regulatory issues and scrutiny on EXE. Labour situation also difficult. Likes the price, but wants to see more on the business fundamentals.
There is so much concern on quality of earnings and when the companies will be profitable. He wants to see the industry mature. He likes it long term. The health side of this could be revolutionary over the next couple of decades.
A new CFO about six months ago is resulting in a change in their business operations. He thinks this is a lottery ticket if you already own it. He would wait until year end -- if it does not do well, take the tax loss then. Right now the company is running radio silent.
Use this list wisely to identify buying opportunities.
Happy trading !