A roundup of some of the North American equities making moves in both directions
On the rise
Shares of Canadian cannabis companies continued to soar on Thursday in response the Democrats gaining control of the U.S. Senate.
“Federal cannabis reform will be accelerated and greater clarity on the regulatory path forward with Democratic control of the US Senate. In particular, we look for the near-term passage of the SAFE Banking Act (federal cannabis banking reform) in 2021,” said Echelon Capital analyst Andrew Semple in a research note. “We also believe it is likely that progress will be made on the MORE Act (federal cannabis decriminalization, among other important provisions) towards the latter half of 2021 or possibly later if COVID-19 requires additional attention from lawmakers.”
Pot stocks have rallied since Joe Biden’s victory in the U.S. presidential elections in November and higher demand for pot during the coronavirus-led lockdowns.
Vice President-elect Kamala Harris’ has promised pot decriminalization, which would remove it from the classified substances list. But with Republicans gaining control of the senate in November elections, the passage of acts to decriminalize it, had looked bleak.
While marijuana has been legalized in some states, its use is still illegal at a federal level. Import of marijuana into the U.S. from other countries, or even across states, is prohibited and federally governed institutions, like banks, can even be charged with money laundering if they work with marijuana growers.
Restaurant Brands International Inc. (QSR-T) was higher after announcing Burger King has redesigned its brand including its logo, food packaging and restaurants in order to reflect improvements such as eliminating preservatives.
“We’ve been doing a lot in terms of food quality and experience,” said Fernando Machado, global chief marketing officer of Restaurant Brands International, which owns Burger King. “We felt that putting a wrap around all that with an upgrade of our visual identity would help signal to our consumers that this is a brand that’s evolving.”
The rebranding, Burger King’s first in over 20 years, includes a new logo with a rounded font that mirrors the shape of its burgers and other menu items.
Bold colors in shades of brown, red and green are a nod to Burger King’s flame grilling process and its use of fresh ingredients, the company said.
Burger King earlier this year announced it would remove all artificial colors and preservatives from its signature Whopper burgers as fast food chains are increasingly introducing healthier options to follow consumer tastes.
The company’s famously quirky plastic-faced mascot - The King - won’t be going anywhere despite the rebranding.
“We love him the way he is, and he will continue to be weird,” Mr. Machado said.
“Our biggest miss was how TSLA can take advantage of its stock price to raise capital inexpensively and fund capacity outlays and growth,” said Joseph Spak.
Walgreens Boots Alliance Inc. (WBA-Q) kept its full-year earnings forecast unchanged on Thursday, even as it anticipates a hit to current quarter earnings from the COVID-19 pandemic, sending its shares higher.
The company has taken a number of steps to boost profit after the health crisis hammered sales and forced it to cut jobs, shut some UK-based Boots stores and sell its distribution unit to AmerisourceBergen Corp for US$6.5-billion.
Walgreens maintained fiscal 2021 forecast of low single-digit growth in adjusted EPS, after it beat analysts’ estimates for adjusted first-quarter profit driven by higher sales at its retail pharmacy stores and robust prescription volumes.
Same-store sales at its U.S. pharmacies rose 3.7 per cent in the quarter as it filled 297.3 million prescriptions. Boots UK pharmacies recorded a 2.5-per-cent rise in the sales.
The company, which had been expecting a boost from distribution of COVID-19 vaccinations, said the opportunity is likely to be offset by the pandemic related lockdowns and restrictions.
Walgreens and rival CVS Health Corp. (CVS-N) have an agreement with the federal government to vaccinate nursing home residents across the country through a voluntary program.
Albemarle Corp. (ALB-N) jumped after it said on Thursday it will expand capacity at its lithium production facility in Silver Peak, Nevada as demand for the ultralight battery metal is expected to grow as automobile companies across the globe produce more electric vehicles.
Government mandates, rising concerns about climate change and other factors have all boosted demand for electric vehicles, and Albemarle expects the investment in capacity to provide domestic support for the growing electric vehicle market.
Albemarle plans to invest US$30-million to US$50-million to double the current production at the Nevada site by 2025.
The Charlotte, North Carolina based company said it will also begin a program to evaluate clays and other available Nevada resources for commercial production of the metal.
Albemarle is also seeking ways to optimize lithium extraction from its brine resources, including those in the Clayton Valley.
Bolton, Ont.-based Titanium Transportation Group Inc. (TTR-X) closed higher after announcing before the bell it has opened a brokerage services office in Chicago, its third location south of the border.
In a research note, Desjardins Securities analyst Benoit Poirier said: “The location is expected to require limited incremental capital (plug-and-play solution as technology has already been developed in Canada) and overhead given TTR’s presence in the country/segment.
“While travel restrictions limited branch openings, we are pleased that management is proceeding with the third location early in 2021 considering the strong growth experienced by the U.S. brokerage business recently. Management mentioned with 3Q20 results that it was actively looking to accelerate the expansion, targeting three additional openings by the end of 2021 (including the Chicago location). Recall that TTR’s initial target was five branches within three years or 10 locations within five years (the initiative was launched in 1Q19).”
On the decline
Vancouver-based Endeavour Silver Corp. (EDR-T) was lower on Thursday in the wake of reporting its highest quarterly production in the last two years from its three silver-gold mines in Mexico.
Before the bell, the company announced fourth-quarter production of 1.12 million silver ounces and 12,568 gold ounces.
It also set it met its 2020 full year production guidance despite a two-month suspension of operations due to the COVID-19 pandemic.
Conagra Brands Inc. (CAG-N) was down despite forecasting current-quarter profit above Wall Street estimates, betting that demand for its frozen dinners, cake mixes and gourmet popcorns will continue as the COVID-19 crisis lingers on.
Demand for packaged foods with long shelf lives, including frozen vegetables and cake mixes, has surged, as shuttered restaurants and the fear of contracting the virus forced shoppers into stocking their pantries and cooking at home more often.
The company, known for Slim Jim beef jerky and Birds Eye frozen vegetables, said it has seen a sustained increase in demand from its retail customers so far in the third quarter.
The company forecast adjusted earnings between 56 US cents and 60 US cents for the third quarter, largely above the estimates of 57 US cents, according to IBES data from Refinitiv.
For the second quarter ended Nov. 29, organic sales rose 8.1 per cent driven by more consumers eating snacks at home.
With files from staff and wires