A roundup of some of the North American equities making moves in both directions today
On the rise
Superior Plus Corp. (SPB-T) was 12 per cent higher on Monday after announcing a US$260-million strategic investment by Brookfield Asset Management Inc. (BAM.A-T) through the purchase of newly created perpetual exchangeable Series 1 Preferred Stock of a U.S. subsidiary.
“Acquisitions are becoming increasingly attractive as fewer competing buyers are pursuing growth at the current time”, said Superior CEO Luc Desjardins. “We are excited to partner with Brookfield on the execution of our strategy. Our differentiated business platform, combined with the improved financial strength and enhanced liquidity resulting from the Brookfield Investment, positions Superior to become the leading consolidator in the U.S. propane industry, which we view as a highly opportunistic environment.”
Superior also announced the suspension of its Dividend Reinvestment Plan and Optional Share Purchase Program after payment of the May dividend, payable on June 15.
Brookfield Asset Management was up 3.4 per cent.
Genworth MI Canada Inc. (MIC-T) rose 6.3 per cent after saying on Monday it has no plans to change its underwriting policy for debt service ratio limits, minimum credit score and downpayment requirements.
Government-backed Canada Mortgage and Housing Corp (CMHC) said last week it would tighten rules for offering mortgage insurance from July 1, after forecasting declines of between 9% and 18% in home prices over the next 12 months.
The move would make it harder for riskier borrowers, who offer downpayments of less than 20%, to access CMHC’s default mortgage insurance.
National Bank analyst Jaeme Gloyn said: "We like this decision. The decision will help soften potential negative impacts to the housing/mortgage market as we argued against tinkering with mortgage underwriting criteria in light of the COVID-driven housing market slowdown. We estimated CMHC’s more restrictive criteria related to debt service ratios and credit scores could have impacted 20 per centof CMHC-insured borrowers. These borrowers will now access mortgage insurance through MIC, and we expect Canada Guaranty will also not change underwriting criteria.
“The decision will also help MIC increase its market share without significantly increasing risk.”
If combined, the two companies would have a market capitalization of about US$232-billion, based on Friday’s closing share prices.
A merger would also unite two drugmakers at the forefront of efforts to fight the new coronavirus but could be politically sensitive as governments seek control over potential vaccines or treatments.
RBC Dominion Securities analyst Brian Abrahams said: “Though formal talks are reportedly not ongoing and GILD’s size and improving strategic direction under new leadership will likely create hurdles to a deal of this magnitude actually getting done, we do believe a merger could potentially provide some synergies to the two companies. Most importantly, though, we see this news as bringing to the forefront GILD’s underappreciated core HIV business, virology expertise, and emerging oncology/immunology pipeline -- all of which we believe will continue to drive steady, low-risk, long-term cash flows.”
Amazon (AMZN-Q) shares were higher by 1.7 per cent after an analyst at RBC Dominion Securities raised his target to a new high on the Street, seeing it as a “structural winner” from the COVID-19 pandemic.
After jumping 42.98 per cent in price last week, shares of Boeing Co. (BA-N) rose a further 12 per cent on Monday.
A surprise jump in last week’s U.S. employment data has fueled hopes of a quicker global economic recovery from the COVID-19 pandemic.
In Toronto, Air Canada (AC-T) shares were up 15.3 per cent.
U.S. electric vehicle maker Tesla Inc. (TSLA-Q) was up 7.3 per cent after the China Passenger Car Association (CPCA) said it sold 11,095 Shanghai-made Model 3 vehicles in China in May.
Tesla sold 3,635 vehicles in April, down from around 10,160 units in March, CPCA data showed. CPCA uses a different counting method than Tesla’s deliveries.
Tesla did not immediately respond to a request for comment.
Dunkin’ Brands Group Inc. (DNKN-Q) was up 4.2 per cent after it said on Monday its franchisees are seeking to hire up to 25,000 workers as it prepares for higher demand, with U.S. states reopening after months-long lockdowns to contain the spread of the novel coronavirus.
Canton, Mass.-based Dunkin’, which has about 90 per cent of its restaurants open, said new jobs include front-of-counter to managerial roles at restaurants and added that it was committed to diversity and inclusion.
Dunkin’ would also launch a national advertising campaign in Spanish and English for the recruitments and said it would partner with Southern New Hampshire University to offer low-cost online college education to its employees.
With files from staff and wires