A humorous look at the companies that caught our eye, for better or worse, this week
You couldn’t stand watching everyone else get rich, could you? So you made a New Year’s resolution to invest in Shopify. Oops. With high-growth tech stocks getting clobbered amid fears of rising interest rates, shares of the e-commerce software company started 2022 with a four-day tumble that erased 17 per cent of its market value. The drop also knocked Shopify off its perch as the largest Canadian company by market cap and into third place behind Royal Bank and TD Bank. Given that both banks raked in at least $10-billion more in profit than Shopify did over the past 12 months, that’s probably fair.
Dorel Industries (STAR)
Business quiz! Shares of Montreal-based Dorel Industries surged after: a) the company reported record sales of infant car seats, strollers and cribs thanks to a pandemic-driven baby boom; b) the Reddit forum WallStreetBets picked Dorel as its next “stonk” to “go to the moon”; c) Dorel announced a special dividend of US$12 a share to be paid from proceeds of the US$810-million sale of Dorel Sports – which sells bicycles under the Schwinn, Cannondale and other brands names – to Netherlands-based Pon Holdings. Answer: c.
Ford Motor (STAR)
Remember when people used to joke that Ford meant “Fix Or Repair Daily”? Well, Ford shareholders are getting the last laugh now. On the heels of a 136-per-cent advance in 2021, shares of the automaker extended their gains after the company, citing strong customer orders, announced plans to nearly double production capacity for its coming F-150 Lightning electric pickup truck to 150,000 units annually by mid-2023. With Ford’s electric vehicle sales in the U.S. market now second only to Tesla’s – thanks in part to the popularity of the Mustang Mach-E SUV – investors are plugging in to some big profits.
Stelco Holdings (DOG)
It was a strange week for Stelco. First, the Hamilton-based steelmaker purchased a 40-per-cent stake in the company that owns the Hamilton Tiger Cats football team and Forge FC soccer club – because the synergies between steel production and professional sports are so, um, obvious. Then Stelco announced that fourth-quarter steel shipments were well below prior guidance because of production challenges and delays caused by the Omicron variant. What’s more, Stelco unveiled soft guidance for the first quarter, citing planned outages, weaker demand and decreased labour availability caused by COVID-19. Okay, now it makes perfect sense: The company wants to hire football and soccer players to work in its steel mills in the off-season.
Oh, the Humana-ty. Shares of Humana, one of the largest U.S. health insurance providers, plunged the most in nearly 13 years after the company slashed its forecast for customer additions to its Medicare Advantage plans this year to between 150,000 and 200,000, down from a previous estimate ranging from 325,000 to 375,000. Speaking at a Goldman Sachs conference, Humana CEO Bruce Broussard cited competition from rivals who have introduced “really aggressive pricing” that he said may not be sustainable. Sort of like Humana’s stock price wasn’t sustainable.
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