Latest Stock Buy or Sell? Make More Informed Decisions!
Today, Robert Lauzon and Stockchase Insights commented about whether CRWD-Q, BTU-N, ATRL-T, UNP-N, POU-T, POW-T, NTR-T, PPL-T, TPZ-T, SHLE-T, TVE-T, V-N, PEY-T, T-T, NXR.UN-T, MEG-T, BCE-T, GXE-T, LLL-T, BDGI-T, FSZ-T, CCA-T, TWM-T, TA-T, GRT.UN-T, ENB-T, MDT-N, CSH.UN-T are stocks to buy or sell.
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Many companies in the nuclear space are either government entities or divisions of larger companies. But for E&P companies, SNC has significant industry experience and it has won several contracts in various countries this year. As an indirect play on the sector, it works, and it has a big backlog. It has not been our favourite company, for various growth reasons and scandals, but things have improved immensely and very strong earnings growth is now expected. It is not 'cheap' at 27X earnings but for a nuclear-focused investor we think it has some attractions.
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Coal prices vary by grade, rank, mining method and region. There are regional differences, as transportation is a high cost. But pricing standards are not quite as defined as the oil market. There are simply a lot more regional prices. BTU did miss estimates in the 2Q, with EPS at $1.16 vs $1.63 expected. Sales matched estimates. BTU does see prices rising with a build up of inventories by customers expected in the second half. BTU remains a classic cyclical value stock, with P/E less than 5X now, an OK dividend and balance sheet with net cash of $700M. Free cash flow was $1.6B in the past year. It has started a $1B buyback but we do note the total number of shares has increased since 2019. If it does complete its buyback though the company will essentially be moving towards privatization, as that would be 1/3rd of its market cap. Investors are concerned about a recession, but the stock seems priced for that already, certainly. Coal remains a pariah, but met coal could still do well if/when the global economy strengthens (China, lower rates?). The outlook for thermal is perhaps less robust, but BTU still generates substantial profits/earnings at low prices. We note it has lost lots of money in various years of the past decade, but the balance has massively improved since those years. Debt was more than $8B, for example, in 2016 vs net cash now as noted. Analysts do expect lower earnings in 2023 and 2024 so it is hard to get too excited here, but the stock is certainly priced right.
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Numbers/outlook were good. CRWD reported EPS of 74c vs estimates of 56c. Sales were $731M vs estimates $724M. Sales rose 6% but recurring revenue rose sharply, it won a very large single order, and profitability is improving fast. Guidance was increased, though not by a huge amount. The backlog is growing, it has $2.4B net cash, and we would consider these very solid results overall.
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July Market Recap:
The TSE stock index was basically flat (+0.31%) over the monthly period ending August 2nd, 2023, and up 2.85% over the past year. The 2nd quarter GDP in Canada slowed to 1% while in the USA it grew 2.4%. Consumer spending in Canada was resilient, but still slowing in Canada. The IMF upgraded global GDP outlook to 3% (2.8% in April), but global economic risks remain tilted to the downside with disappointing Chinese economic recovery as one reason, as well as simmering geopolitical tensions. The June CPI was 2.8% in Canada and 3% in the US. The Federal Reserve and the BOC both raised their policy interest rates by 25 bps during July and suggested that more hikes may be necessary.
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Highly volatile stock.
Good to buy when out of favor.
Service style business is the first to be cut when energy prices fall.
Good if bullish on energy(risky).
Better names for investors (Trican/Precision).