A humorous look at the companies that caught our eye, for better or worse, this week
Irrational exuberance, anyone? Propelled by strong fourth-quarter earnings and Tesla’s forecast that it will “comfortably” sell more than 500,000 vehicles this year, shares of the electric-vehicle maker more than doubled through just the first 23 trading days of 2020, triggering a short squeeze that only added fuel to the rally. Even after the stock tumbled on news that Tesla has temporarily shut its factory and stores in mainland China because of the coronavirus, buyers swooped in and the shares quickly rebounded. How could this not end well?
Smartphone addiction has its advantages – especially for investors. Shares of BCE surged after the parent of Bell Mobility, Virgin Mobile and Lucky Mobile added a net 123,582 wireless customers in the fourth quarter, posted a 10.9-per-cent increase in net earnings and raised its dividend by 5 per cent. With BCE choosing Finland’s Nokia as its first supplier of network equipment for the rollout of 5G – which promises even faster download speeds – customers will have even more reason to stare at their smartphone screens.
Innergex Renewable Energy (STAR)
Business quiz! Shares of Innergex Renewable Energy jumped after the operator of hydro, wind and solar facilities: a) opened the first generating plant powered entirely by used coffee pods; b) won an exclusive contract to supply electricity for the lights in Times Square for the next 20 years; c) announced a strategic alliance with Hydro-Québec in which the provincial Crown corporation has invested $661-million in a private placement of Innergex shares and plans to contribute another $500-million to joint ventures with Innergex. Answer: c.
New York Times (STAR)
It’s fair to say most New York Times readers don’t have a lot of love for Donald Trump. But some New York Times investors might be sad to see him go. With endless controversy in Washington presumably giving readership a lift, the Times added 232,000 net new digital-only news subscribers in the fourth quarter, up 35 per cent from the same period in 2018. What’s more, the NYT Cooking service – which publishes recipes and other food-related content – had a “spectacular end to a strong year with 68,000 new subscriptions in the quarter,” chief executive Mark Thompson said. Apparently, people following the impeachment hearings needed a lot of comfort food.
Intact Financial (STAR)
Dumb: Driving without insurance. Smart: Investing in insurance provider Intact Financial. Shares of Canada’s largest home, auto and business insurer surged after the company posted fourth-quarter earnings well above analysts’ estimates and hiked its dividend by a bigger-than-expected 9 per cent. Including this week’s rally, the shares have gained about 39 per cent in the past year. But with the stock trading at a multiple of more than 2.7 times book value – the highest level in nearly 14 years, according to RBC analyst Geoffrey Kwan – investors might want to temper their expectations.