A roundup of some of the North American equities making moves in both directions today
On the rise
Polaris Infrastructure Inc. (PIF-T) increased 4.2 per cent after announcing it has signed a non-binding Memorandum of Understanding relating to acquire a Panama-based 10 MW run-of-river hydro project from Navitas Holdings Inc.
In a research note, Raymond James analyst David Quezada said: "While the MOU is non-binding, we consider this a very positive development for PIF and believe the increased diversification will be well-received by investors.
“We believe PIF is set to realize significant savings due to capital already spent and in light of the attractive PPA coupled with relatively higher spot power prices in Panama, likely drives an attractive acquisition multiple and potential project return.”
DraftKings Inc. (DKNG-Q) was up 3 per cent in the wake of announcing it has commenced an underwritten public offering of 33 million shares of its Class A common stock, consisting of 14 million shares offered by DraftKings and 19 million shares offered by certain selling stockholders of DraftKings.
On the decline
CAE Inc. (CAE-T) slid 1.1 per cent after saying its new medical ventilator has been certified by Health Canada and it will begin shipping.
The Montreal-based company signed a contract with the federal government earlier this year to manufacture and supply 10,000 ventilators.
The made-in-Canada equipment will be sent to hospitals across the country.
CAE’s usual business is flight simulators used for pilot training, but the company shifted gears due to the pandemic to design and build a medical ventilator.
The CAE Air1 ventilator can deliver pressure control, volume control and pressure support ventilation using room air or pressured oxygen.
The company says it will now start shipping hundreds of ventilators every week.
Canfor Corp. (CFP-T) declined 1 per cent in the wake of announcing before the bell that its 70-per-cent owned subsidiary, Vida Group, has entered into an agreement to purchase three sawmills located in Sweden from Bergs Timber for a purchase price of $43-million plus working capital.
The three mills, which are located in Vimmerby, Mörlunda and Orrefors, will add approximately 215 million board feet to Vida’s annual capacity. With additional investment, Vida anticipates the production capacity of the mills can be increased to 300 million board feet.
HEXO Corp. (HEXO-T) dropped almost 12 per cent after it announced that it has established an at-the-market equity program allowing it to issue up to $34.5-million of common shares from treasury to the public.
The volume and timing of distributions will be determined in the company’s sole discretion.
Southwest Airlines Co. (LUV-N) was lower by 1.1 per cent in the wake of saying Wednesday it has enough cash to carry on business for the next two years, up from its prior forecast of 20 months, as travel demand gradually picks up.
The company’s assessment is based on current cash and short-term investments of US$13.9-billion and an expected average daily cash burn of about US$20-million in June.
“The company has continued to experience a modest improvement in passenger demand and bookings in June 2020—primarily leisure-driven demand,” Southwest said.
In the second quarter, Southwest said it expects average daily core cash spending of between US$30-million and US$35-million. The airline had earlier forecast a capacity decline of up to 60 per cent from a year ago.
Last week, American Airlines said it expects to halt its daily cash burn by the end of 2020, thanks to cost-cutting measures and an improvement in travel demand.
Oracle Corp. (ORCL-N) dipped 3.8 per cent after it reported quarterly revenue below Wall Street targets on Tuesday as its traditional licensing business underperformed because the coronavirus crisis delayed purchases from clients in hospitality, retail and other sectors.
Shares of the business software maker, which earns the biggest chunk of its sales from cloud offerings and software licensing, fell about 4% in extended trading.
Credit Suisse analyst Brad Zelnick said: “This is the first enterprise software company from which we are seeing the results of an all-COVID-quarter and in Oracle’s case, with nowhere to hide given the seasonal prominence of its F4Q. Against a turbulent backdrop, results held up fairly well as operating income and EPS both exceeded expectations, though license/total revenues came in a bit below. F1Q was guided slightly better and commentary suggests accelerating revenue growth post-COVID. Of particular note, CEO Safra Catz’s confidence is backed by an increasingly favorable portfolio mix of growers vs. decliners. We remain Outperform and raise our TP to $58 (from $57).”
Norwegian Cruise Line Holdings Ltd. (NCLH-N) fell 6.5 per cent after it said late Tuesday it was further extending suspension of its voyages through end of September due to the COVID-19 crisis.
The cruise operator and peers Royal Caribbean Cruises Ltd and Carnival Corp earlier extended trip suspensions until July 31 amid sailing curbs. The U.S. Centers for Disease Control and Prevention first imposed a “no-sail” order in March.
The industry has faced the brunt of the health crisis as major outbreaks on ships were blamed for spreading the disease, resulting in government-mandated no-sail orders and trip cancellations.
Norwegian Cruise said it was also cancelling some voyages through October 2020, including Canada and New England sailings, due to travel and port restrictions
Shares of Chembio Diagnostics Inc. (CEMI-Q) slumped more than 60 per cent on Wednesday after the U.S. Food and Drug Administration (FDA) revoked the emergency use authorization for its COVID-19 antibody test kit on concerns about its accuracy.
The FDA found from data submitted by Chembio and an independent evaluation that the company’s test kit shows higher false results compared to expectations and the authorized labeling for the device.
The company’s antibody test was one of the first to get the FDA’s emergency use authorization (EUA) in April.
“The risk to public health from the false test results makes EUA revocation appropriate to protect the public health or safety,” the agency said in a statement.
Several brokerages cut their rating on the stock, with Benchmark lowering its 2021 revenue estimate for the company by more than US$400-million to US$47.4-million.
With files from staff and wires