Stockchase Insights

EPS of 44c missed estimates of 71c; revenue of $786.5M missed by 0.5%. EBITDA of $81.7M missed b7 7.5%. Mild weather impacted demand in the quarter. Pressure on earnings is expected to continue. Claims and appraisal volumes declined. BYD's cost structure in place exceeded levels of demand, after a couple of very solid prior quarters.  Sales did rise 10%. Same store sales growth is not expected in the Q2. Certainly disappointing after last year's stronger showing. Shares are down the most in three years. BYD has missed before, and has recovered. Its longer term performance record is excellent. But, this quarter will put it into the penalty box for a period of time. We would still not view it as a  sell, however, with the decline already in place. 
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IFA is a very small company ($36.7M market cap), and for Q1 it reported sales of $6.8M, representing a growth of 2% year-over-year, and EPS of $0.018 compared to $0.015 in the prior year, representing a 20% increase. Management noted it remains on track to meet its recently announced revenue target of $28 to $32M for FY2024, and its margins increased, benefiting from new programs and a higher gross margin for the quarter. It trades at a 1.6X price-to-sales ratio, although, profitability and cash flows have been lumpy. These were decent results, but the company is small and needs to be considered very high risk.
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EPS of 9c beat estimates of 6c; revenue of $128M beat estimates of $123.1M. EBITDA of $16M matched estimates. Year forecast was maintained. A couple of brokers lowered targets. Revenue fell 6.4% with a large decline in Strategic Partners business with the closing of a contract. Gross margins declined. While this was a 'beat' versus expectations, debt remains too high for our comfortable level, considering the fairly big decline in growth vs prior year. We think buyers can wait.
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Company Highlight: Aritzia (ATZ)

ATZ operates as an apparel company that focuses on building brand and style rather than just trends. ATZ has gained significant traction and loyalty among consumers in recent years, especially among the young demographic due to its effective social media strategies by leveraging social media (mainly TikTok and Instagram) and influencer strategies. the company demonstrates great execution by not only resuming sales growth, and store expansion but also managing inventory in a more efficient manner. Investors now expect the worst is now behind the company, ATZ is trading at a fair multiple, and we think the company could potentially see a re-rating by the market if ATZ could demonstrate solid execution and resume its previous growth trajectory of double-digits.
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The stock is acting better, and is up 15% YTD. It has been a while since it saw $6. EPS was -4c vs expectations of (nil). Revenue was $86.6M, beating estimates of $83.1M. EBITDA of $13.58M missed estimates of this $14.47M. Guidance was largely maintained. Revenue rose 4.9%, with margins a bit higher than estimates. Net cash is about $90M. Still not much excitement here. Some recent partnerships look more interesting than the quarterly results. It is good to see the sales gain, but we would not yet call this a dramatic turn. 
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Our data shows 16.7% short. We tend to ignore anything below 5%, and at 10% we like to understand the short thesis. 16.7% is quite high but in and of itself does not mean much. The stock is up 586% in a year so shorts have clearly been crushed. It is very cheap on an earnings basis but growing fast. It does have a lot of debt so shorts may look to cover on an equity issue one day. It is a small company, and with the short interest we would expect heightened volatility, certainly. Recent results were good and guidance was affirmed. So fundamentally it looks OK and is still priced well. 
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EPS of 54c beat estimates of 52c; revenue of $1.46B was marginally better than consensus. EBITDA of $121M was 6% better. Sales forecast was affirmed. EPS did slip from 64c last year. Revenue rose 2.2%, with specialty foods up 4.1%. Speciality foods has recovered nicely from its 4%+ contraction in the prior quarter, and showed 1% organic growth this quarter. The quarter was good and will likely be a relief for investors. 
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Preventing Investment Fraud: Don’t ever send money back

A common scam is that someone sends you a cheque and asks you to send money back to them. Sometimes, they message you for whatever reason, or want to buy something you are selling online, and “accidentally” send you a cheque for too much and ask you to send back the extra money. In some cases, you’ve allegedly won a prize, but you’re told to send money to cover taxes and fees.

Using your intuition helps here. Everyone knows, or should know, that banks will often hold cheques until they clear. There is no reason to do anything at all until you know you have the money in your bank. Also, how many times have you bought something and accidentally paid thousands of dollars too much?

Sure, mistakes can happen, but that’s why banks allow cheques to be stopped. Asking for cash to make up the difference is a giant red flag of a likely scam.
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EPS of $0.04 missed estimates of $0.07 and revenues of $50.6M beat estimates of $49.9M. Revenues grew by 28% year-over-year, and its Adjusted EBITDA grew by 21%. It has no debt and management expects to generate revenues of $53.8M to $54.8M for Q2 2024. It was cash flow negative for the quarter, but its margins are good and it has a strong balance sheet. For a company growing fast with good profit margins, it is only trading at 20X forward earnings, but it is highly volatile and a small name. We consider the results overall decent, but investors are likely not pleased with its earnings miss.
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EPS beat estimates of 19c coming in at 23c. Revenue missed estimates of $83.4M coming in at $74.3M and declining 3% year-over-year. Profit increased 9.3% from the prior year. Royalty production dropped 0.7% in the quarter while average price per barrel also dropped 3.8% to C$54.81. The company recorded 22 new leases in the quarter. FRU will be highly dependent on oil prices & production for future growth. The quarter is OK despite the revenue miss and the dividend yield continues to be high.
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EPS missed estimates of 16c coming in at a loss of 4c. Revenue beat estimates of $157.1M coming in at $158.17M declining 2% year-over-year. Because of depletion and other charges, cash flow is a better metric than earnings for energy producers. SGY had per share cash flow of 62c, down from 64c but certainly better than what the net loss implies. The company also confirmed 2024 production guidance. We think management is fine, however the stock will need commodity prices to pick back up in efforts for a turnaround. Mr. Colborne (CEO) has built and sold several companies within the sector. We would say HOLD for income. The debt reduction is still ontrack to finish by the end of this year while it is cheap and has an attractive yield. Management also seemed positive for on oil prices. But mostly it is valuation: the stock is very cheap on all metrics. 
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Market Update:

The Bank of England maintained its interest rates at a 16-year high of 5.25%, edging closer to a rate cut as early as June. On the other hand, the U.S. Labor Department reported the jobless-benefit claims of 231,000 in the week ending May 4, the highest level in nine months, compared to the estimate of 214,000. The Canadian dollar was 73.06 cents USD. The U.S. S&P500 ended the week up 1.6%, while the TSX was up 2.3%.

All but one sector rose this week. Materials and energy added 5.0% and 3.3%, respectively, while industrials gained 2.7% and financials added 2.4%. Consumer staples and real estate edged up 1.5%, each, and consumer discretionary rose 1.3%. Technology ended the week gave up 2.3%. The most heavily traded shares by volume were Athabasca Oil, B2Gold and Argonaut Gold.
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We think BRK.B is a very competitive alternative relative to the S&P 500, BRK.B may not be the greatest performer but it protects the downside pretty well. The day will come when someone takes over Mr. Buffet as a succession, which could raise the question of whether the capital allocation decision would be as high-quality as before. But the transition is already in place, really. In terms of breaking up the company, the insider ownership at BRK.B is high, and it is a mega-cap company, so it is hard for any activist to participate in this situation. We think the likelihood of this scenario is quite low. There is a 15% withholding tax on US dividends in a TFSA, but we very highly doubt the company will change its dividend policy and start paying one. 
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EPS of ($0.06) missed estimates of $0.0763 and revenues were $393.34M. Adjusted Funds Flow was $181.6M, a 15% year-over-year increase, which was directed to dividends, and reinforcing its balance sheet. TVE purchased 7.6M in shares during the quarter, 1.4% of outstanding shares for $25.6M. Production volume was in line with guidance, and management called for an average annual production of 61,000 to 63,000 boe/d in 2024 with a capital budget of $390M to $440M. A big piece of its loss per share in the quarter is due to an unrealized loss in its commodity related hedging contract. The stock closed the day in the green, and we are not overly concerned by this quarter. It continues to offer a high dividend yield, and repurchase shares. 
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EPS was 44c vs estimates of 35c; revenue of $611M beat estimates of $590.7M. Datadog's better-than-expected 1Q revenue momentum is positive, and as the company garners additional share from rivals sidetracked by M&A, prospects for upward revenue revisions can't be overlooked. The signs of improving workloads witnessed in April, a multi-product push, growing AI workloads and large-enterprise customer focus could continue to fuel Datadog's revenue growth. Rising investments into sales and marketing initiatives may provide further impetus. The re-accelerating cloud revenue growth reported by hyperscalers in the recent quarter should also be constructive for observability vendors. The stock slipped on the earnings, but it is up 49% in a year. The concern was likely more due to the president stepping down and a less-than-perfect forecast. But we would still see it as an accumulate (buy over time, but with no rush). 
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