A look at North American equities heading in both directions
On the rise
Chip stocks Nvidia Corp. (NVDA-Q) rose 2.3 per cent after peer Taiwan Semiconductor Manufacturing Company Ltd. (TSM-N) beat fourth-quarter revenue expectations.
The world’s largest contract chipmaker, whose customers include Apple and Nvidia, has benefited from a boom in artificial intelligence applications that has helped it weather the tapering off of pandemic-led demand.
Revenue in the final three months of last year came in at T$625.5 billion (US$20.10-billion), according to Reuters calculations, compared with US$19.93-billion in the year-ago period.
That beat TSMC’s previous prediction for fourth-quarter revenue being in a range of between US$18.8-19.6 billion, and also beat an LSEG SmartEstimate of T$617.1 billion drawn from 21 analysts.
SmartEstimates give greater weighting to forecasts from analysts who are more consistently accurate.
For December alone, TSMC reported that revenue fell 8.4 per cent year-on-year to T$176.3 billion, which was down 14.4 per cent compared with the previous month.
TSMC, Asia’s most valuable publicly listed company with a market capitalization of US$491-billion, did not provide any details or forward guidance in its brief revenue statement.
Africa Oil Corp. (AOI-T) soared over 7 per cent after announcing a subsidiary of its investee company, Impact Oil and Gas Ltd., has signed a farmout agreement with a subsidiary of TotalEnergies EP for a share in offshore Namibia interests.
The Vancouver-based company said Impact Oil and Gas Namibia has a deal with TotalEnergies EP Namibia for a share of Impact’s interests in two blocks at its exploration project in offshore southern Namibia.
Orla Mining Ltd. (OLA-T) rose 0.7 per cent with the premarket announcement of Fairfax Financial Holdings Ltd. (FFH-T) acquiring 500,000 common shares at a price of $4.20 each for an aggregate purchase price of $2.1-million.
The deal represents 0.16 per cent of outstanding shares in the Vancouver-based company, brining Fairfax’s total holdings to 12.8 per cent.
Lennar Corp. (LEN-N) increased after the U.S. homebuilder increased its annual dividend to US$2 per share from US$1.50, and share buyback program by US$5-billion.
“Given the strength of our balance sheet, our strong cash position and our operating strategy driving cash flow, we are focusing more of our capital allocation on maximizing total shareholder returns. Accordingly, we are pleased to increase both our dividend and our share repurchase authorization,” said CEO Stuart Miller in a release.
Shares of EchoStar (SATS-Q) surged as much as 41 per cent on Wednesday after the satellite operator said it has hired advisors to help evaluate strategic alternatives following its merger with Dish Network.
The merger, which was completed on Dec. 31, was engineered by telecom mogul Charlie Ergen to tackle growing competition from larger U.S. carriers.
EchoStar’s stock, which jumped to US$17.90, is on track for its biggest daily percentage gain on record and highest level since September last year.
Following the merger, Dish Network also transferred some of its wireless spectrum licenses under the umbrella of a newly formed subsidiary, EchoStar Wireless Holding.
The FTC had said in the approval order that Ergen will beneficially own more than 90 per cent of the voting stock and approximately 54 per cent of the equity of the recombined company.
The transaction would integrate Dish Network’s satellite technology, streaming services and nationwide 5G network with EchoStar’s premier satellite communication solutions.
Shares of Home Depot Inc. (HD-N) saw gains after an equity analyst at Wedbush upgrade its shares, seeing an “inflection in sign” for the home improvement retail industry.
“Although home improvement retail demand weakened in 2023 on the back of spiking interest rates, plummeting existing home sales, consumer spending shifting to services and unwinding of pulled forward demand throughout the pandemic, we believe many of these key drivers are bottoming or reversing, which should translate to stronger demand in 2024,” said Seth Basham.
“We now see home improvement spending to rise by at least low single-digit levels year-over-year by 2H24, with HD a prime beneficiary. We expect HD’s Pro business segment to outperform DIY in a rebounding industry environment with healthy Pro and general employment, solid wage growth and homeowner spending power from continued home price appreciation. Further, HD’s building Complex Pro initiative should help it gain Pro market share.”
On the decline
Vancouver-based West Fraser Timber Co. (WFG-T) was lower by 1.3 per cent after saying it’s closing one U.S. sawmill and indefinitely curtailing another because of high fibre costs and soft lumber markets.
The Vancouver-based company says it’s closing its Maxville, Florida, sawmill and indefinitely curtailing operations at its Huttig, Arkansas, sawmill by the end of the month.
West Fraser says the closure of the Maxville sawmill will affect around 80 employees, while the curtailment of the Huttig sawmill will affect 140 employees.
The company says it will mitigate the impact on employees by providing opportunities at its other operations.
West Fraser says it anticipates restructuring and impairment charges of approximately $50-million in the fourth quarter of 2023 as a result.
The decision will reduce West Fraser’s U.S. lumber capacity by around 270 million feet.
Toronto-based property services company FirstService Corp. (FSV-T) finished narrowly lower in the wake of saying it has closed three small acquisitions in the U.S.
Financial terms of the deals were not disclosed.
Under the first deal, the company says its First Onsite Restoration business has acquired DryPatrol LLC, which is based in Dayton, Ohio.
DryPatrol provides commercial restoration services in Dayton and the surrounding region.
FirstService also says its Paul Davis Restoration business has acquired two of its existing franchised operations.
The first serves the Denver metropolitan area, while the other covers urban markets across southern Idaho.
Crypto stocks including Hut8 Corp. (HUT-T), Bitfarms Ltd. (BITF-T), Coinbase Global Inc. (COIN-Q), and Riot Platforms Inc. (RIOT-Q) were mixed in volatile trading as prices of the world’s most valued cryptocurrency, Bitcoin, dipped after the U.S. securities regulator said a fake social media message was posted on its account regarding the eagerly awaited approval of exchange traded funds.
U.S. asset managers remain hopeful the securities regulator will permit the trading of spot bitcoin exchange-traded funds (ETFs), even after a fake post on the agency’s social media account saying they had been approved sparked confusion on Tuesday.
The Securities and Exchange Commission (SEC) will decide on Wednesday whether to approve an application from asset managers Ark Investments and 21Shares to launch a spot bitcoin ETF. More than a dozen bitcoin ETF applications, including from BlackRock , Fidelity and VanEck, are also pending with the agency.
The products would be a game-changer for bitcoin, offering institutional and retail investors exposure to the world’s largest cryptocurrency without directly holding it, and a major boost for a crypto industry beset by a string of scandals.
Several industry executives told Reuters earlier this week they expected the SEC will approve the Ark/21Shares product along with many others. They declined to be identified because the discussions are private.
The SEC has not said how it will rule and a spokesperson said the agency cannot comment on applications.
With files from staff and wires
David Leeder