A roundup of some of the North American equities making moves in both directions today
On the rise
Franco Nevada Corp. (FNV-T) rose after its fourth-quarter financial results, released late Wednesday, blew past expectations on the Street.
The Toronto-based miner reported adjusted earnings per share and cash flow per share of 85 US cents and $1.25, respectively, both exceeding the consensus forecasts of 69 US cents and US$1.08.
Calling it a “blue-chip gold stock,” iA Capital Markets analyst Puneet Singh said: “The stock is oversold and we view the downside here as limited. If gold prices were to breakdown further then FNV is well positioned to put its strong balance sheet to work to do deals that’ll become increasingly available. If gold prices are successful at recapturing their 200-day moving average and beyond, then FNV will be one of the first out of the gate to benefit as it has proven itself at generating value for shareholders over time.”
Under the agreement, BAT will buy 58.3 million Organigram shares at a price of $3.792 per share.
Organigram says it has also signed a product development collaboration agreement with BAT that will see the creation of a “centre of excellence” that will focus on developing the next generation of cannabis products with an initial focus on CBD.
In a research report, Raymond James analyst Rahul Sarugaser said: “With the second and third largest tobacco companies (BAT, MO resp.) now having taken material stakes in two of Canada’s leading cannabis producers, this, in our view, portends a flood of investment, not just from other tobacco companies, but other alcohol and beverage providers, and large CPG companies more broadly. The reputational risk is evaporating, and, as countries around the globe re-evaluate antiquated cannabis policies, the legal risk seems on the cusp of disappearing as well. And, the fact that all of these large CPG company investments were directed at technology development-oriented companies is not lost on us, particularly with 50 per cent of the deals being directed toward cannabis companies involved in cannabinoid biosynthesis. (An important asset to have on-board if seeking a big CPG partner, it seems.)
“In our view, BAT selected an excellent partner in OGI. OGI has demonstrated excellence in operations, engineering, and R&D through its entire history, but particularly under the direction of CEO, Greg Engel since mid-2017. OGI made one of the first investments in cannabinoid biosynthesis technology—a manufacturing modality we believe will be transformative for the global cannabinoid industry through its CA$10-million stake in Hyasynth Biologicals, revealing early on the company’s propensity for identifying sector-disrupting technologies.”
In response to better-than-anticipated fourth-quarter results, shares of Shawcor Ltd. (SCL-T), a Toronto-based global energy services company, were higher.
In a research note, ATB Capital Markets analyst Tim Monachello: “Shawcor reported a high quality Q4 Adj. EBITDA beat which came in at $42-million vs. our and consensus’ $26-million estimate and ahead of management’s $25-$30-million guidance range. Compared to our estimates, the strong result was primarily a function of stronger cost reduction initiatives that have ‘substantially’ outpaced management’s expectations for $60-million in annualized G&A and other cost savings, though SCL’s go forward G&A guidance aligns well with our estimates which suggests cost savings could only be partially enduring. Overall, while we view SCL’s forward guidance as only marginally positive with respect to cost reductions, the stock may react strongly to the large EBITDA beat.”
In the wake of the release of its quarterly results and announcement it is setting up a community clinic this week that could deliver up to 2,000 COVID-19 vaccines per day, Linamar Corp. (LNR-T) was up in Thursday trading.
The Guelph, Ont. auto parts manufacturer’s announcement comes after chief executive Linda Hasenfratz resigned as a member of Ontario’s COVID-19 Vaccination Distribution Task Force in late January, after it was brought to Premier Doug Ford’s attention that she travelled outside the country in December.
“Our current focus now is on three key areas. First, continuing to ensure a safe workplace, as now is not the time to become complacent around our safety protocols,” Ms. Hasenfratz said on a conference call with financal analysts on Wednesday.
“Second, we’re focused on testing to help reduce community spread. And finally, we’re focused on vaccinations, both in terms of encouraging our global employee base to get vaccinated, and also helping to deliver those vaccines.”
The vaccine clinic announcement was part of Linamar’s quarterly financial results, which showed that net income rose to $113.1 million, or $1.73 per diluted share in the final three months of 2020 — up from $49.7 million, or 76 cents per share, in the fourth quarter of 2019.
Revenue during the quarter was $1.7 billion, up from $1.6 billion in the year-ago period.
On an adjusted basis, Linamar’s earnings amounted to $1.97 per diluted share, up from $1.15 per diluted in the fourth quarter of 2019.
Analysts on average expected adjusted earnings of $1.46 per share, according to financial data firm Refinitiv.
Vancouver’s Premium Brands Holdings Corp. (PBH-T) was up as it raised its dividend and reported its fourth-quarter profit and revenue rose compared with a year ago.
The specialty food company increased its quarterly dividend to 63.5 cents per share, up from 57.75 cents per share.
The increased payment to shareholders came as Premium Brands reported a profit of $23.3-million or 57 cents per share for the 13-weeks ended Dec. 26, up from $16.2-million or 43 cents per share a year earlier.
Revenue totalled nearly $1.06-billion, up from $959.1-million.
On an adjusted basis, Premium Brands says it earned 86 cents per share for its latest quarter, up from an adjusted profit of 79 cents per share a year ago.
On average, analysts had expected an adjusted profit of 78 cents per share and nearly $1.06-billion in revenue, according to financial data firm Refinitiv.
Toronto-based Docebo Inc. (DCBO-T) was higher following a narrow fourth-quarter beat.
Before the bell, the tech firm reported consolidated revenue of $18.8-million, exceeding the high point of its pre-announced expectation of of $18.75-million and higher than the Street’s estimate of $18.4-million. Adjusted EBITDA of $0.5-million beat consensus forecast of $0.1-million.
In a research note, ATB Capital Markets analyst Martin Toner said: “The learning management system market is growin rapidly, and Docebo’s unique solution is significantly outpacing that growth. We continue to believe Docebo’s revenue will grow at a high rate driven by a continued influx of new customers, and growth with existing customers. We find Docebo’s stock attractive given the size of the total addressable market, the high rate of growth, and the rate of deceleration in that growth rate.”
“Given the recent broad sell-off in the technology sector, Docebo’s stock is down 33.7 per cent from its year-to-date high of $79.95, we believe these results reinforce the strong growth story.”
“Barrett represents CI’s second RIA in New York and expands CI’s scale in the world’s largest financial center to more than US$5.5 billion,” it said in a release.
Airline and tour operator Transat AT Inc. (TRZ-T) was up after said it will not resume flights until mid-June, and is seeking to borrow money to stay afloat in case the Air Canada (AC-T) takeover falls apart.
Montreal-based Transat suspended normal service at the end of January after agreeing to a demand by the federal government all carriers suspend service to Mexico and the Caribbean in order to combat the pandemic.
Transat made the announcement as it released its financial results for the first quarter on Thursday morning.
For the three months ending on Jan. 31, Transat lost $60-million, compared with a loss of $34-million in the same period a year ago. Revenues totaled $42-million, compared with almost $700-million a year earlier. The results follow a loss of $497-million for the year ending Oct. 31, 2020.
- Eric Atkins
Bausch Health Companies Inc. (BHC-T) was higher after naming insider Sam Eldessouky as its new finance chief, at a time when the Canadian drugmaker looks to speed up the spinoff of eye care unit Bausch + Lomb.
Current CFO Paul Herendeen will take on the role of advisor to the chairman and chief executive officer, the company said.
Mr. Eldessouky’s appointment comes amid calls from activist investor Glenview Capital Management for Bausch to spin-off Bausch + Lomb by year-end. The company in August said it would offload the unit into a separate publicly listed firm.
Bausch last month agreed to add directors from Icahn Group to its board, weeks after activist investor Carl Icahn disclosed a nearly 8-per-cent stake.
Mr. Eldessouky joined Bausch Health, previously known as Valeant Pharmaceuticals, in 2016 as senior vice president and corporate controller.
On the decline
Investment firm Brookfield Infrastructure Partners (BIP.UN-T) was narrowly lower after it said on Thursday it is committed to its $7.1-billion hostile takeover offer for Inter Pipeline Ltd. (IPL-T) despite the pipeline company’s board turning down the bid.
The largest individual shareholder in Inter Pipeline said it welcomes the board’s “efforts to market test the offer against other take-private proposals,” adding that its offer is in the best interest of the Canadian company’s shareholders.
Inter Pipeline on Tuesday asked its shareholders to reject the offer, saying it “significantly undervalues” the oil and gas transportation company.
Brookfield last month launched a hostile bid with the same $16.50 per share offer that Inter Pipeline had previously rejected as inadequate.
The investment company had also said it was willing to raise its offer to as much as $18.25 per share if the pipeline company comes to the negotiating table, but Inter turned it down and later launched a strategic review of options, which could include a “corporate transaction.”
Inter Pipeline, which expects a superior offer or other alternatives to emerge, also previously said it is looking for a partner for its $4-billion Heartland Petrochemical Complex in Alberta that is due to start operating early next year.
Business software maker Oracle Corp’s (ORCL-N) cloud division reported quarterly revenue that missed analysts’ estimates, on increased competition from Amazon (AMZN-Q) and Microsoft (MSFT-Q) for cloud services due to remote working.
Oracle said it expects fourth-quarter revenue to increase between 1 per cent and 3 per cent on a constant currency basis, the midpoint of which implies a revenue of US$10.65-billion, according to Reuters calculations. Analysts had expected current-quarter revenue of US$10.84-billion, according to IBES data from Refinitiv.
Oracle’s shares fell on Thursday.
With the shift to remote work, many businesses were pushed to shift operations to the cloud resulting in an increase in demand for offerings by Oracle, Microsoft’s Azure and Amazon Web Services.
Revenue from Oracle’s cloud services and licenses support unit, its largest by revenue, rose 5 per cent to US$7.25-billion in the reported quarter, compared with analysts’ estimates of US$7.27-billion.
“We are opening new regions as fast as we can to support our rapidly growing multi-billion dollar infrastructure business,” Oracle Chairman Larry Ellison said.
The company’s revenue rose 3 per cent to US$10.09-billion for the third quarter ended Feb. 28, edging past analysts’ estimates of US$10.07-billion.
On an adjusted basis, Oracle earned US$1.16 per share, beating estimates of US$1.11.
With files from staff and wires