A humorous look at the companies that caught our eye, for better or worse, this week
AutoCanada (DOG)
ACQ – TSX
Budget-friendly ways to extend the life – and upgrade the look! – of your old vehicle: 1) apply duct tape in a range of vibrant colours to secure detached bumper; 2) replace smashed windows with crisp, new plastic sheeting; 3) tie down loose trunk lid with decorative braided rope. With soaring interest rates making people think twice before trading in their clunkers for newer rides, AutoCanada wrote down its used-vehicle inventory by $12.4-million and absorbed a $13.3-million increase in inventory financing costs in the fourth quarter, contributing to weaker-than-expected results. If none of those options works, push it over a cliff for the insurance.
Aecon Group (STAR)
ARE – TSX
Working on a road-construction site is hard – unless you’re the guy who flips the “stop” and “go” sign around. Best job in the whole world. Anyway, the only signs Aecon Group investors were seeing this week were dollar signs after the construction and infrastructure company agreed to sell its roadbuilding business in Ontario to Green Infrastructure Partners for $235-million in cash. Adding to investors’ cheer, Aecon said its fourth-quarter revenue jumped 16 per cent and earnings surged 63 per cent. The stock’s been given the green light to go higher.
Hims & Hers Health (STAR)
HIMS – NYSE
Business quiz! Hims & Hers is: a) a new set of pronouns that combines the best of he/him/his and she/her/hers; b) a retreat where couples go to improve their grammar and spelling skills; c) a U.S. telehealth company that connects patients with physicians who prescribe treatments for erectile dysfunction, hair loss, anxiety, depression and other conditions and whose shares rose after it reported a 97-per-cent increase in fourth-quarter revenue and achieved positive adjusted EBITDA. Answer: c.
Kontoor Brands (STAR)
KTB – NYSE
“Honey, does my butt look fat in these jeans?”
“No, but your brokerage account does.”
Shares of Kontoor Brands – which makes denim and other clothing under the Lee, Wrangler and Rock & Republic names – were enjoying some hefty gains after the company posted better-than-expected results for the fourth quarter and issued strong 2023 guidance. With revenue rising 7 per cent to US$731.6-million and earnings jumping 18 per cent to US$51.6-million, investors are stuffing their jeans with cash.
Silvergate Capital (DOG)
SI – NYSE
A bank that does a lot of business with cryptocurrency exchanges? What could go wrong? In the latest crisis to hit the industry, shares of Silvergate Capital plunged after the crypto-friendly bank delayed its annual report and warned it may not be able to continue as a going concern. Reeling from the bankruptcy of crypto exchange FTX – which sparked a run on Silvergate’s deposits and led to a US$1-billion fourth-quarter loss – the bank has been selling debt securities at a loss to raise cash and may have to mark down some of its remaining holdings. This could lead to the bank being “less than well-capitalized,” it said in a filing. Shareholders are “less than thrilled” with the stock’s 95-per-cent drop in the past year.
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John Heinzl