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1550+ opinions with 4.81 rating (one of the best performing expert)


Stock Opinions by Stockchase Insights

PARTIAL BUY
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

EPS of $8.08 beat estimates of $7.57. Revenue of $3.55B beat estimates by 6.7%. EBITDA of $579M beat by 5.6%. Conservative guidance worried investors, though. Ulta Beauty's outlook for more operating-margin deterioration in fiscal 2024 is a bit of a concern, given the metric fell more than 100 bps to 15% in 2023 and since big market-cap hardline peers are largely projecting improvement this year. Beauty demand remains robust, as evidenced by strong 4Q results, including a 14.6% operating margin -- up vs. 3Q and above management's guidance. This strength in demand should let discounts remain limited, a tailwind for margin. The company's forecast for $11.7-$11.8 billion in sales for 2024 appears low, implying less than 5% growth at the midpoint, or about half of 2023's almost 10% gain. This might be too drastic a slowdown, even with tough year-over-year comparisons, considering its growing customer base and expanding store fleet. We are comfortable still, but it needs to be watched a bit more closely than usual. 
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Consumer Products
BUY
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

EPS of 24c beat estimates of 22c. Revenue of $135M beat estimates by ~8%. EBITDA of $30M beat by 7%. Revenue rose 22%, with international up 38%. The quarter was a record. Net earnings rose 48%. Net cash is $40M. With nice growth and only at 14X earnings, a valuation bump is possible, moreso if rates fall. It was certainly a strong quarter. We might set an $18 target here. 
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electrical / electronic
HOLD
McCoy Corp.
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

MCB reported Q4 revenue of $19.7M, increasing 8% year-over-year from $18.3M in 2022. The increase in revenue was driven by strong demand for the newly commercialized smart products, particularly McCoy's Flush Mount Spider (FMS). MCB also reported net earnings of $2.7M, compared to net earnings of $7.3M in 2022, with the comparative period benefitting from a $3.9M gain on sale and leaseback of McCoy's facility in Cedar Park, TX, and $1.0M recovery of income taxes. MCB cited, "Though timing and product mix of customer purchase commitments may result in quarter-to-quarter fluctuations in revenues and gross margins, we anticipate sustained success beyond drilling activity cycles as adoption of our smart technologies continues to accelerate." We think this was an OK quarter as revenue growth was good and earnings seems to be impacted by one-time factors in 2022 but still did decline significantly. 
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oil / gas field services
COMMENT
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

Company Highlight:

ARC Resources Ltd. (ARX): Acquires and develops crude oil, natural gas and natural gas liquids in Canada through its interest in the Montney basin located in Alberta and northeast British Columbia. ARX has cyclicality in revenue and earnings. Over the last few years, ARX experienced a decent tailwind due to record energy prices and favourable operational leverage. The company is returning capital through dividends and buybacks with a combined yield of around 6% on the trailing twelve-month basis.
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Unknown
HOLD
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

WTE operates a coal storage and unloading/loading terminal in British Columbia. The company has contracts to ship coal from mines in British Columbia, Alberta, and the United States. WTE pays a high yield of 5.84%, and has a relatively cheap forward price-to-earnings ratio of 14.9x. The stock price has been essentially flat over the last year with a small decline, while the high yield has created slight gains. Forecasts suggest that WTE will see a decline across EPS and revenue over the next few years. WTE pays out a high percentage of free cash flows in dividends at about 86% over the last twelve months, while also paying out 46% of cash from operations. Debt is moderate and the company has also paid special dividends the last two years and will do so again this year. We think it is an OK income option that has grown it's dividend at nearly a 30% annualized rate over the last three years. Declining results are cause for concern in the future in addition to size risk, but WTE performed well in 2023 displaying top and bottom line growth. It is seeking to ship/load new products to alleviate its dependence on one. 
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INDUSTRIAL PRODUCTS
BUY
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

Higher interest income would definitely be a tailwind for OLY’s business as interest income flows straight to the bottom line. For example, in FY2023 interest income grew 100%, and now accounts for around 50% of the company’s total revenue. In a low interest rates environment, the business may not do sensational, but would likely still be just fine. In the past 10 years, interest rates were quite low, but OLY’s operating results were still quite healthy and consistent. We may not consider OLY as a compounder as the company did not reinvest much of its earnings to grow, but we would certainly consider OLY as a high-quality, capital light business that would consistently raise dividends over time. We would be comfortable owning OLY over the long term.
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management / diversified
BUY ON WEAKNESS
Adobe Systems
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

EPS of $4.48 beat estimates of $4.38; revenue of $5.18B was marginally above estimates. EBITDA of $2.68B beat estimates by 4%. But guidance was conservative. Adobe's below-consensus 2Q outlook ($440 million vs. $460 million) for Digital Media net new annualized recurring revenue (ARR) stood out as the main sticking point of fiscal 1Q results. Management not raising the annual ARR target after beating 1Q guidance is being perceived as another negative. This is only a minor concern, as Adobe is more focused on new users to its AI products right now and less on monetization. This is the right strategy and should show an improvement in AI monetization in 2H, especially 4Q and in 2025. Digital Experience guidance of just 8% sales growth in 2Q was also disappointing, and may see some improvement in 2H. Adjusted operating margin gained 180 bps to 47.6%, its highest level, but the rate of improvement may taper in 2H on more AI investments. The stock is getting hit hard, but this is not the first time; it remains a global leader with strong expected growth. We would be more inclined to buy once the stock settles in.
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computer software / processing
COMMENT
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

Company Highlight:

MEG Energy Corp (MEG): Operates as an energy company that utilizes steam-assisted gravity to extract and produce thermal oil in its Christina Lake Project in the southern Athbasca oil region of Alberta. The company has had a 54% EBIT CAGR in the last five years due to favorable commodity prices and a significant improvement in profitability profile. MEG also allocated capital in a disciplined manner by paying down debt and buying back shares aggressively. MEG is a good balance of high quality assets, excellent management and exposure to favorable tailwinds in energy prices.
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Unknown
HOLD
 ECN Capital
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

EPS $0.008; revenue $47.6M. We would like to hold at least until we rates decline, so we can see how the business/stock performs in a different rate environment.
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Financial Services
PARTIAL BUY
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

Trading is thin, despite its $480M market cap. Sales had a big drop, to $114M from $159.5M, as prices declined. EPS fell more than half to $1.09 vs $2.57. Production of 24,707 fell slightly. With lower prices, the only way to improve cash flow is with production, and investors prefer to see growth here. The stock is VERY cheap, but then again many in the sector are. We need a catalyst here to create more interest. The balance sheet is decent. ARC Energy owns 63% and insiders own 2.4%, so the float is tight. This keeps many large investors at bay. We would deem it OK, but certainly not a 'need-t-own'. 
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Utilities
DON'T BUY
BlackBerry
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

BB is slowly becoming irrelevant. It hasn't made money since 2015, and its large cash balance is gone. Cash flow was negative $263M last year. Sales continue to decline, and it missed its sales estimate last quarter. BlackBerry's sales should remain volatile as it separates its Cybersecurity unit from its higher-growth Internet of Things (IoT) segment, with disruption likely to result. Revenue may expand at an average annual rate of 3.1% in fiscal 2024-27, based on estimates. The higher growth potential of IoT vs. the Cybersecurity unit could prompt a spinoff of the former, allowing investors to tap IoT's sales growth exclusively. High-margin licensing fees have fallen to an annual run rate of about $20 million following the sale of most of the patent portfolio. The resulting margin pressure is likely to abate as QNX and other profitable new offerings pick up. Overall, while its technology may still have promise, it has over the past decade destroyed shareholder value, with management changes adding more uncertainty. It is vey hard to endorse. 
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electrical / electronic
COMMENT
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

What is a Stock Market Index?

Many market indexes hit new highs this week, but have you ever really thought about a stock index? What it is exactly, and why are they so important (if at all)?

A stock market index is meant to show how a market is doing on average. It typically includes the largest companies in a country, and there are 11 different sub-sectors in North America. Committees try to set up their indexes so they represent the economy/market. If a company is taken over, a new company is added. If a company’s shares become too illiquid, it is dropped from the index.

Most indexes have highly regulated criteria. For example, the S&P 500 has, amongst others, the following criteria for any company to be added: its shares must be highly liquid; at least 50 per cent of its outstanding shares must be available for public trading; it must report positive earnings in the most recent quarter; and the sum of its earnings in the previous four quarters must also be positive.
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Unknown
BUY
InPlay Oil Corp
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

IPO is a small cap oil and gas company. It is down about 10% over the last year, but has been trending up year-to-date. IPO also pays out a high yield at 7.7% and is cheap on a forward price-to-earnings basis at 7.6x. Revenues have been on the decline in 2023 while revenue and EPS have both missed forecasts for the last three quarters. The company has no cash but also minimal debt on its balance sheet with a debt-to-equity ratio of 0.15x. IPO pays out around 16% of its cash from operations in dividends over the last twelve months which is high, but attractive for income. We would say it is a good option tied to the price of oil and it offers investors an attractive income investment while being cheap on a forward earnings basis as well. We would say it is a moderate buy for oil and income exposure.  
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Energy
BUY
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

We quite like the company and its long term prospects. It data mining solutions used AI before it was trending. It is growing nicely, winning big contracts and is now profitable. The last quarter was very strong. We would be comfortable keeping it. 
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Technology
HOLD
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

The main concerns are related to same store sales growth slowing, but still remains positive over the last year. The general economic environment in 2023 also impacted results and were a concern, but improvements in the future here should help. Number of restaurants in the royalty pool was also flat in the fourth quarter. Debt load is still very manageable and we are not too concered on that front. 
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investment companies / funds
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