This week was the end of earnings season here for the most part. We still have Well Health to report on March 31st, however, that will be the last Premium featured company to report earnings.
It’s a pretty quiet e-mail this week, as we’ll simply go over the four earnings reports plus give an update on our NFT project and how Premium members can gain access to the massive educational resources we’re going to be pushing out soon!
Downloadable Screeners
We have decided to start offering our screeners via a downloadable excel sheet. We realize that on some computers/laptops, particularly those with smaller monitors, our screeners don’t fuction well. So, every week we will attach our new screens.
In the file, there will be all four screeners. our Dividend Safety Screener, Growth Screener, Key Data Screener, and our REIT screener.
If you are looking for guidance as to what the columns mean, we will be adding a section for that next week inside of the sheet. For now, simply head to the website and it has descriptions on each screener. Just click the link below to download them.
2022_03_25_Screeners_DOWNLOAD.xlsx
BRP Inc
Before we get into BRP earnings, we would just like to say we moved the stock from “Neutral” back to “Bullish”. If you remember, we shifted BRP Inc to Neutral status due to the Ukraine/Russia conflict as the company had operations there. We wanted to wait until the company reported earnings and provided some commentary.
The good news? BRP Inc posted exceptional earnings, and there was no commentary about the situation, which typically means it will be a non-factor.
The company beat expectations when it comes to revenue, earnings, and adjusted EBITDA. Despite the constant fears of supply chain issues and rising material costs, the company continues to deliver. On a year-over-year basis, revenue grew 28%, normalized EBITDA 46%, and net income increased by over 119%.
The company raised the dividend by 23% and guided to 28% revenue growth and 8-12% earnings growth this year. If it can hit this year’s earnings guidance, it is trading at only 8.8 times expected earnings. This is an attractive earnings multiple for a company growing at the pace BRP Inc is. This is a company than I (Dan) own as a core holding inside of my portfolio.
Of note, the company also announced it will be getting back into the 2-wheel market, with an electric motorbike coming in 2024.
You can read our updated report on BRP Inc here
Savaria
Savaria posted a mixed quarter where it beat on revenue estimates but missed on earnings. Savaria has been able to beat estimates on the top line fairly consistently over the last couple of years but it has struggled to meet earnings estimates.
This is likely due to a couple of factors. One being higher than expected acquisition costs. This is something that can be expected as the Handicare acquisition made by the company in early 2021 was a material one.
While smaller, tuck-in acquisitions rarely cause issues, material acquisitions can certainly come with unexpected higher costs. This is a short-term pain for long-term gain situation in our eyes.
The second factor would be supply chain issues, rising material costs, and heightened freight prices. Although Savaria is seen as somewhat of a healthcare option, it is still an industrial company in the fact that it is a manufacturer and exposed to the price of materials. However, these issues are expected to be temporary.
The stock saw some weird price action in which it dipped by 4% after reporting and rebounded over 6.2% the next day. Overall, this is a company that both Mat and I own, and are still bullish on.
You can view our most recent report on Savaria here
Dialogue Health
Arguably our most speculative option on the Bull List here at Stocktrades Premium, Dialogue posted mixed results in just its fourth quarter since going public.
Revenue grew by 40.6% year over year and annual recurring revenue grew by 45.6% over the same time period.
56% of its customers signed up for more than one of its services, highlighting the fact that Dialogue Health will likely be able to onboard existing customers to additional products to create additional revenue streams.
This company is still in the early stages of development, so losses are growing as the company is facing more expenses related to growth. We wouldn’t put too much emphasis on earnings or EBITDA misses on the quarter for this company as earnings are likely to vary wildly, and become nearly impossible to predict.
Overall, Both Mat and I own Dialogue, but our time horizons on this company are lengthy. We’re bullish on the digital health sector overall, but one investing in Dialogue will need to have a significant amount of patience.
You can read our full report on Dialogue Health here
Boyd Group Services
There has been significant pressure on Boyd’s stock price over the last while that we believe has been overdone. The company has been undergoing some issues when it comes to supply chains and labor shortages as it not only struggles to secure parts to supply repairs but also the staff to execute the repairs.
However, the company reported a fairly strong quarter, beating on both revenue and earnings estimates. Earnings came in much higher than expected and the company posted 19.9% growth in Fiscal 2021 when compared to Fiscal 2020. The company bumped the dividend by 2.1% and reaffirmed the goal it set back in 2020 to double the size of its business by 2025.
The current environment is not treating Boyd well. Margins are under pressure and it is currently working with insurers to increase charges related to repairs. For the most part, insurers are obliging. This will likely take a few quarters for the impacts to be felt.
We think patient accumulators here will be rewarded, as this is a company that is continuing acquisitions at an exceptional pace and when things do turn around, it is likely Boyd returns to the strong growth it had been generating pre-pandemic.
You can read our full report on Boyd Group here
An update on our NFT education
Now that we are in full NFT development mode, we’ll provide a weekly update on the progress of the Stocktrades Genesis NFT project. We already have close to 150 Stocktrades Premium Members that have indicated their interest in grabbing one of our NFTs on launch, absolutely free.
If you haven’t already, be sure to pop into Discord and follow the steps to opt-in. If you need some help on how to get into Discord, this video is a great start.
We strongly encourage everyone to participate as even if you are not interested today, you may be 6 months down the road (especially after you’re done the course we are providing), and by that point it will be too late to grab one for free. Heck, you may even want to gift it to a family member or friend – either way, don’t miss out.
Our NFT’s will sell to the public for anywhere from $200-250. So, there is little reason for Premium members to not secure one for free.
But, you’re not going to be on your own when it comes to navigating this industry if you don’t want to be. That is because we are launching a fully-fledged course that will guide people from having absolutely zero clue about NFTs, all the way to “minting” and buying their first one. The first module will release later this week, and we’re super excited about it. This module is going to clear up some massive misconceptions about the industry.
As promised, Premium members will gain access to all of this, absolutely free. You don’t have to participate, and it won’t impact your Premium subscription in any way. In fact, this is an entirely different branch of Stocktrades, one that we are simply giving Premium members access to for free.
You can visit our Discord to get additional details. The Discord is recommended, but not absolutely mandatory. If you’re interested in participating but do not want to download Discord, feel free to just reply to this e-mail and let me know.
