A humorous look at the companies that caught our eye, for better or worse, this week
Romeo Power (DOG)
O Romeo, wherefore art thy revenues, Romeo? In November, Romeo Power – which manufactures batteries for commercial vehicles – projected it would have US$140-million of revenues in 2021. This week, it revised its forecast just a teensy weensy bit: Citing supply constraints for raw materials in the fast-growing electric vehicle market, the company now expects revenues of just US$18-million to US$40-million. The already-struggling stock was hammered on the news and is now down nearly 80 per cent from its December high. Talk about a tragedy.
Park Lawn (STAR)
A lot of people are dying to invest in Park Lawn’s stock, apparently. Shares of the funeral home and cemetery operator surged to a record high after it reported a 35-per-cent increase in revenue for the fourth quarter, lifted by acquisitions and strong demand for the company’s products and services. Park Lawn – whose earnings easily topped analysts’ expectations – also announced a series of acquisitions in North Carolina, Tennessee, Texas and Wisconsin that deepened its presence in the U.S. market. You can’t take it with you, but investors are enjoying it while they can.
Being classified as an essential business has its advantages. Even as many retailers have been pushed to the brink by the pandemic, Dollarama has barely registered a scratch: Total sales grew 3.6 per cent to more than $1.1-billion for the fourth quarter ended Jan. 31, as new store openings countered a small decline in sales at existing locations. With Dollarama hiking its dividend by 7 per cent and boosting its long-term growth target to 2,000 stores in Canada by 2031 – up from about 1,350 currently – the dollars keep pouring in for Dollarama investors.
Congratulations on your new pandemic puppy! Now don’t forget to set aside several thousand dollars for food, treats, a leash, a bed, squeaky toys, flea medication and endless vet bills. As more dog and cat owners ordered pet food and accessories online during the pandemic, retailer Chewy posted net sales of US$2.04-billion for the fourth quarter ended Jan. 31, up 51 per cent from a year earlier. With Chewy’s profit of 5 US cents a share crushing analysts’ expectations for a loss of 10 US cents, owning the stock is more fun than a tummy rub.
When considering a stock, it’s important to weigh the pros – and the Conn’s. Shares of Conn’s – which sells furniture, electronics and appliances at stores across the southern United States – jumped after earnings quintupled to US$25.1-million or 85 US cents a share for the fourth quarter ended Jan. 31. Even as full-year revenue fell because of the pandemic, the company said e-commerce sales more than doubled and earnings were helped by tighter credit standards that led to fewer bad customer debts. With the stock rising more than 500 per cent over the past year, investors can’t see any Conn’s at all.
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