A roundup of some of the North American equities making moves in both directions today
On the rise
Apollo will pay $39 a share for the Toronto-based company, which operates 25 casinos in British Columbia, Ontario, New Brunswick and Nova Scotia. That represents a premium of 35 per cent over Great Canadian’s closing price on Tuesday.
Including the assumption of Great Canadian’s debt, the value of the transaction is $3.3-billion, the companies said.
New York-based Apollo, which has its own gambling businesses in the United States, aims to keep the company based in Canada. It said it expects Canadian institutional investors to buy an equity ownership in the company alongside its own funds when the deal is done. It did not name them.
- Jeffrey Jones
The Ottawa-based REIT reported funds from operations per unit of 22 cents, down 2.1 per cent year-over-year but matching the consensus forecast.
In a research note, Canaccord Genuity analyst Brendon Abrams said: "Overall, the REIT’s portfolio continues to perform well, and the steady results during the quarter are reflected by its strong rental collections (consistent with pre-pandemic levels), high occupancy (97 per cent ), and healthy gains in rental rates on new leases (9.4 per cent on average). Although Minto took a pause on acquisitions for the quarter, the REIT continued to execute on other aspects of its growth strategy, including the repositioning of suites and advancing certain development projects.
“Following the quarter, our bullish outlook for Minto is largely unchanged. We continue to believe the REIT’s high-quality portfolio and exposure to Canada’s largest rental markets leaves it well-positioned to navigate the current headwinds relating to the pandemic and, ultimately, capitalize on the stronger rental fundamentals once border restrictions ease and unemployment rebounds. Valuations within the multi-family sector in Canada remain strong with a deep pool of well-capitalized investors searching for assets, as well as the availability of CMHC insured debt at historically low interest rates. The opportunity for investors to purchase Minto’s units at a discount to NAV (currently 17.5 per cent) is, in our view, extremely attractive.”
The business and technology consulting firm says it earned $251.9-million or 96 cents per diluted share for the quarter ended Sept. 30 compared with a profit of $324.1-million or $1.19 per diluted share a year ago.
CGI says the drop was primarily due to a one-time restructuring cost of $84.3-million in the most recent quarter.
Revenue for the final quarter of the company’s 2020 financial year amounted to nearly $2.93-billion, down from nearly $2.96-billion in the same quarter last year.
Excluding acquisition-related, integration and restructuring costs, CGI says it earned $318.4-million or $1.22 per diluted share compared with a profit of $329.5-million or $1.21 per diluted share a year ago when it had more shares outstanding.
Analysts on average had expected an adjusted profit of $1.17 per share and $2.98-billion in revenue, according to financial data firm Refinitiv.
AirBoss of America Corp. (BOS-T) jumped after saying its net profit surged in the third quarter on a more than doubling of revenues from supplying respirators and related products ordered by U.S. government agencies in response to COVID-19.
The Ontario-based company says its net income attributable to shareholders was US$11.6-million or 47 US cents per diluted share, up from US$1.50million or seven cents per share a year earlier.
AirBoss says adjusted profit was US$11.7-million or 47 US cents per share, compared with US$1.8-million or 8 US cents per share in the third quarter of 2019.
Revenues for the three months ended Sept. 30 rose to US$162.7-million from US$77.2-million in the prior year.
AirBoss was expected to report 33 US cents per share in adjusted profits on US$140.3-million of revenues, according to financial data firm Refinitiv.
AirBoss Defence Group, which is owned 55 per cent by AirBoss, delivered 100,000 respirator systems to the U.S. Federal Emergency Management Agency (FEMA) under a US$96.4-million contract issued in March.
Nuvei Corp. (NVEI-T) shares were up after the TSX newcomer released its quarterly results before the bell.
National Bank Financial analyst Richard Tse said: “In its first quarter as a public company, Nuvei reported better than expected Q3 results relative to our and consensus expectations with revenue of $93.6-million, up 32 per cent year-over-year, vs. our expectation of $91.3-million. That outperformance was driven by accelerating growth in e-Commerce. Adj. EBITDA of $41.0-million was also above our estimate of $38.8-million care of operating leverage (from compensation costs) this quarter. More importantly as we look at the growth drivers, Nuvei received regulatory approval for sports betting in Colorado & Indiana and expanded its local acquiring capabilities with launches in Hong Kong, Singapore, Russia, Brazil and Colombia.”
The Montreal-based meal kit company reported revenue of $83.7-million and adjusted EBITDA of $5.3-million, both topping the consensus estimates of $75.6-million and a loss of $0.2-million, respectively.
Raymond James analyst Michael Glen said: “This quarter represents Goodfood’s second consecutive quarter of positive EBITDA, and it is clear that the company is benefiting from COVID and changes taking place in terms of consumer behaviour through the pandemic. From that perspective, with news flow earlier this week regarding the potential for a vaccine, we suspect there will be a number of questions regarding the sustainability of these trends in a more “normal” operating environment. Outside of this, we anticipate management will speak about the ongoing launch of the Goodfood WOW same day/next-day grocery delivery business, which we recognize stands to offer substantial upside to our current forecast if management is successful in rolling out the service more broadly in coming quarters. We expect one other talking point during the call will be SG&A spend, in particular marketing spend, which we anticipate will track higher in coming quarters as the company rolls out the Goodfood WOW service.”
Linamar Corp. (LNR-T) increased in the wake of saying this summer’s quarterly profit grew compared with last year as it cut capital expenditures by more than 50 per cent and sold more farming equipment.
The vehicle parts manufacturer reported sales of almost $1.64-billion in the three months ending Sept. 30, down from $1.74-billion in the third quarter of 2019.
But net earnings rose to $125.5-million, or $1.92 per diluted share, compared with earnings of $98.2-million, or $1.50 per diluted share, a year ago.
The company also doubled its third-quarter dividend to 12 cents per share.
Analysts surveyed by Refinitiv expected the Guelph, Ont.-based company to report revenue of $1.59-billion and net income of $67.2-million, or $1.15 per share.
Linmar’s improved earnings come after the company updated its third-quarter guidance in early October, saying that COVID-19 had not hurt U.S. vehicle sales or manufacturing in Asia as much as previously expected.
Scotia Capital’s Mark Neville said: “It was nothing short of a blowout quarter: adjusted EPS doubled consensus and FCF came in at $445 million, allowing the company to fully restore the dividend, repay debt, and enhance its liquidity position. Even if we fully adjust for government support programs (i.e., CEWS) – and we wouldn’t – adjusted EBIT still would have beat consensus by more than 25 per cent as the company benefitted from several, in our opinion, sustainable items – i.e., improved margins on launching programs, higher industry volumes, and discretionary and structural cost reductions. Post results, we have increased our 2021E by approximately 15 per cent and gain increased confidence in the trajectory of LNR’s earnings recovery. Our one-year target increases to $65 per share. While the stock has performed well into the Q – given strong results from the automotive supply-chain – we expect the shares to react strongly to the results. In fact, we continue to see significant value in the name, with the shares trading at just 4.3 times EV/EBITDA on our 2021 estimates, which is a material discount to both automotive and industrial comps.”
Toronto-based Northland Power Inc. (NPI-T) rose following the release of in-line third-quarter results and the announcement of the acquisition of three onshore wind development projects in New York totaling 300 megawatts.
Raymond James analyst David Quezada said: “While we maintain a decidedly positive view of NPI from a fundamental perspective, our Market Perform rating reflects the substantial run in the name year-to-date which we believe has brought the stock up to the high end of its historical trading range. That said, with several large scale offshore wind assets (and now onshore wind in NY) in the company’s development pipeline, NPI also boasts perhaps the most long term upside potential among the IPP peer group.”
Lyft Inc. (LYFT-Q) rose after saying on Tuesday it was working on a new service to take a slice of the burgeoning food-delivery market as it works to make up for a 48-per-cent drop in quarterly revenue and a slow recovery of ride-hail demand.
Unlike larger ride-hail rival Uber Technologies Inc. (UBER-N), Lyft has no food-delivery business to fall back on amid the pandemic. That means that while Lyft is largely unable to offset the decline in trips, it also avoids Uber’s added costs in scaling its Eats business.
But Lyft President John Zimmer on Tuesday said the company was looking to enter what it considered an untapped market by offering delivery services for restaurants without launching a full-fledged consumer-facing platform for food delivery.
“What we’re hearing from restaurants is they’re looking for a partner who will not charge 30-per-cent commission, but still offer delivery service,” Mr. Zimmer told Reuters in an interview, adding the service would offer new income opportunities to drivers.
While details remain unclear, the offer is aimed at undercutting the prices Uber, GrubHub Inc and other food-delivery services charge restaurants for every order - a method that has drawn opposition from some restaurants and lawmakers.
Lyft’s third-quarter revenue fell to US$499.7-million, surpassing average analyst expectations of US$486.5-million, according to Refinitiv data.
Though Lyft shares have surged this week thanks to hopes for a coronavirus vaccine, the stock has overall lost more than 15 per cent this year and now trades more than 50 per cent below the price of the company’s 2019 public debut.
On the decline
Before the bell, Aurora also announced the pricing of its $150-million underwritten public offering at US$7.50 per unit., upsized from $125-million proposed Tuesday after market.
The Halifax-based company reported revenue of $196.4-million and adjusted earnings per share of 7 cents, missing the consensus projections of $218.9-million and 13 cents.
Canaccord Genuity’s Doug Taylor said: “Chorus reported September-quarter results that featured headline EBITDA that was just narrowly below the Street, though a noisy EPS number was below expectations. Perhaps most importantly, collections against lease revenue improved sequentially and the company improved its liquidity position on a sequential basis. Shares in the near term will likely continue to be subject to sentiment around a COVID-19 vaccine and the related impact on traffic. The balance sheet stability is an encouraging sign in light of a challenging market for its lessee customers.”
China’s Alibaba (BABA-N) was down after it said orders on its e-commerce platforms during the Singles' Day shopping extravaganza had exceeded US$70-billion by Wednesday evening, as lockdown-weary consumers splashed out on as many as 16 million discounted goods.
The world’s biggest sales event - eclipsing Black Friday and Cyber Monday in the United States - spans four main days this year, and so far has brought sellers 20 times as many orders by value than Amazon.com Inc’s two-day global Prime Day last month.
Such is its size that its performance is widely considered indicative of China’s post-virus economic recovery.
“Because of COVID-19, many Chinese cannot go overseas,” Vice President Liu Bo told reporters. “This actually stimulates online consumption.”
So far, the performance is likely a relief for Alibaba Group Holding Ltd after losing about 10 per cent of its market value last week when regulators scuppered the listing of fintech affiliate Ant Group.
Pfizer Inc. (PFE-T) was lower after a regulatory filing showed Chief Executive Officer Albert Bourla sold a stake worth US$5.56-million on Monday, the same day the drugmaker reported positive data on its experimental COVID-19 vaccine.
The company said on Wednesday the sale was part of a pre-announced trading plan, adopted by Mr. Bourla on Aug. 19.
Mr. Bourla sold 132,508 shares at US$41.94 per share, according to a Securities and Exchange Commission filing late Tuesday.
“The sale of these shares is part of Dr. Bourla’s personal financial planning and a pre-established (10b5-1) plan, which allows, under SEC rules, major shareholders and insiders of exchange-listed corporations to trade a predetermined number of shares at a predetermined time,” Pfizer said.
“Through our stock plan administrator, Dr. Bourla authorized the sale of these shares on August 19, 2020, provided the stock was at least at a certain price.”
Pfizer on Monday said its experimental COVID-19 vaccine was more than 90 per cent effective based on initial trial results, sending its shares higher along with the broader markets.
With files from staff and wires