A humorous look at the companies that caught our eye, for better or worse, this week
Keg Royalties Income Fund (STAR)
“I’ll have the prime rib, please. And do you mind filling out this short vaccine questionnaire?” Some restaurant patrons may be nervous about the return of indoor dining, but Keg Royalties investors don’t seem to have any qualms: Shares of the income fund – which receives a 4-per-cent royalty on gross sales at Keg restaurants – jumped after the fund doubled its monthly distribution to 7 cents per unit, citing the relaxation of COVID-19 restrictions and “significant increases in sales” in provinces where indoor dining has resumed. Eat, drink and make money.
No time for breakfast? Grab a Pepsi and a bag of Doritos, and you’re good to go. For lunch, switch it up with a Gatorade and a bag of Lay’s. Problem solved. Shares of Pepsico – which makes these and other fine brands – gained after the snack, beverage and packaged-food giant reported a 12.8-per-cent increase in organic revenue for its second quarter, prompting the company to hike its sales forecast for the year. For dinner, may we suggest a bowl of Cap’n Crunch with a side of Rice-A-Roni?
CorePoint Lodging (STAR)
Business quiz! Shares of CorePoint Lodging rose after the owner of 175 La Quinta hotels across the United States a) announced plans to demolish all of its properties and replace them with Amazon.com distribution centres; b) was named the official hotel for the dating app Tinder; c) said it would “explore strategic alternatives to maximize stockholder value…including a potential sale” now that occupancy levels are rebounding from the pandemic. Answer: c.
Affirm Holdings (DOG)
In the old days, if you couldn’t afford something, you saved up for it. Or shoplifted. Now, even people without a dime to their name can buy stuff thanks to the Affirm app, which lets them pay off their purchases in instalments for up to 36 months, at annual interest rates ranging from 0 to 30 per cent based on their credit score. Unfortunately, Affirm Holdings investors are paying a hefty price just for owning the shares: The stock sank on reports that Apple is developing a similar “buy now, pay later” option for its Apple Pay service that will compete directly with Affirm. None of this would have happened if people had stuck to paying with cash.
TFI International (STAR)
Even if you’ve never heard of TFI International, you’ve probably seen its Canpar Express, ICS Courier and Loomis Express trucks delivering parcels in your neighbourhood. Lately, TFI has been delivering something else: big capital gains. Shares of Canada’s largest trucking company – which provides courier, long-haul transportation and logistics services – surged after it announced that its recently acquired TForce Freight operation (formerly UPS Ground Freight) is expected to report strong operating margins for the second quarter. With the stock more than doubling in the past year, TFI is on a roll.
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