As we move through earnings season, this last week was probably the busiest period we’ve ever witnessed. In fact, we had over 9 stocks on the Bull Lists report earnings.
Mat and I have updated most of the reports, and in terms of performance by Premium highlighted stocks, we don’t think there has been a better quarter than this since our inception.
With that being said, we’ll speak on all the companies that reported this week, share a few key highlights and then link to their full updated report over on the website.
But first, we want to speak on our upcoming pricing adjustment that will not impact you as a current member, but we want to relay to Premium members to avoid confusion.
Discord Success
When we decided to do a trial run of our Discord in 2021, we never expected it to be as big of a success as it is. In fact, it’s become one of the most sought after features here at Stocktrades Premium.
We’re finally ready to fully integrate the Discord into the Premium package, as it is clearly here to stay. As a result, we will be raising prices for new members when it comes to our Premium platform on October 1st 2021.
So what exactly does this mean for you as a current Premium member? Well, absolutely nothing. Your price will not change.
Last time we did this, we had a lot of members e-mailing us with worries that their subscription price would go up. If you are currently a member and your subscription stays active, you have the old pricing locked in.
And although this may seem pretty routine, there was another major platform here in Canada that very recently raised its prices for current subscribers.
Regardless of the amount of new features we add, we will never raise your price as long as the subscription stays active. This has been our promise to loyal members ever since we launched!
In terms of renewals, we send out advanced notice 7 days prior so members are not hit with a surprise. And, if you have any questions at all about your subscription, feel free to ask!
Bull List Earnings
There were a lot of stocks that reported earnings last week. So, to keep this e-mail shorter, I’ll speak on a key highlight from the quarter and then link to our most recent report!
Lightspeed POS (LSPD) reported another very strong quarter in which it beat estimates on both the top and bottom lines. The company posted yet again triple-digit year over year growth when it comes to revenue, and since the company IPOed, it has beat revenue estimates in every single quarter. Since we went from Neutral to Bullish status on the Bull List on March 9th, Lightspeed has gained nearly 80%.
Parkland Fuels (PKI) reported a very strong quarter in which it handily beat estimates on both the top and bottom lines. However, the stock took a tumble on earnings day. To us, it seems like the market did not like flat growth in its International segment. During this reporting period, while countries like the Dominican Republic were at their peak caseloads in the third wave, a country like the United States had been seeing some of the lowest caseloads since the start of the pandemic. This is exactly why you saw sales struggle internationally, but increase significantly in the US. Overall, we’re not worried whatsoever in the long term, and the drop on earnings was unjustified.
An interesting note on a Bull List company expected to report earnings on August 11th, Boyd Group Services (BYD) has struggled over the last year due to a lack of vehicle traffic. With Parkland posting a near 100% increase in US fuel sales, this is a clear indication that more vehicles were on the road last quarter, a good sign for BYD considering a large chunk of its operations are south of the border.
Magna International (MG) posted earnings that missed on both the top and bottom lines, and the company also decreased guidance due to a chip shortage. As we’ve mentioned before, this was expected and we were in fact prepared for it. Clearly the market was as well, as the poor guidance seemed to already be priced in as the stock was flat on the day after reporting earnings. An interesting note? Magna was also outbid on its recent acquisition attempt of Vioneer. It looks as though the acquisition that Magna was criticized for overpaying for will not be going through.
Quebecor (QBR.B) posted earnings that beat on both the top and bottom lines, but the stock is taking a tumble. The market took aim at CEO issues of the past, along with the fact the company did report lower net income on a year over year basis. However, it is key to note that the lower net income was the result of a one off charge, and if we use adjusted earnings, which do not include this, the company increased net income by 9.2%. Quebecor is arguably one of the most attractive telecom options in the country right now.
TMX Group (X) posted very strong earnings, topping estimates on both the top and bottom line. The market rewarded the company with a 5%+ gain on earnings day due to some unexpected growth in earnings. An unpopular option here at Premium, TMX Group is an excellent company with a very wide economic moat, exactly what we look for in a dividend growth play. In fact, the only competition the company has is the Neo Exchange, and we feel it is a long way from taking any considerable market share from TMX.
Manulife Financial (MFC) posted strong earnings, beating on both the top and bottom lines. The stock jumped quite a bit last week, however we feel that it could have been more, if not for tempered expectations by the company in its fastest growing market, Asia. The company warned that a rise of COVID-19 cases could slow growth in the short term, but long term it remains optimistic. Overall, this is still one of the cheapest insurers in Canada, now trading around book value.
Killam Apartment REIT (KMP-UN) continues to be a strong residential REIT option for members, as it continued to not only reduce its payout ratios but also debt ratios. Its payout ratio on the quarter in terms of adjusted funds from operations sits at 75%, which makes the distribution well covered. In fact, the company even came out with a 2.9% distribution raise on the quarter.
Power Corporation of Canada (POW) continues to impress, posting a significant beat on earnings expectations. The company reported earnings per share of $1.47, much higher than the anticipated $0.94 and with an annual dividend of $1.79, the company made enough on the quarter to cover over 80% of the dividend. This leads us to believe that once dividend growth restrictions are eased, it’s only a matter of time before the company hikes the dividend. If you’re curious as to whether or not you “missed out” on Power Corp, it posted a net asset value of $51.60, meaning the company is still trading at a discount to NAV.
And finally, Open Text (OTEX) reported strong earnings that beat on both the top and bottom lines. The company also came through with a surprise 10% dividend raise, and raised its future outlook. This was a tech company that was in a rut for quite some time, but now appears to be breaking out. While it is a little more conservative in nature, this is causing investors to ignore it for more “high flying” options. As a result, despite touching all time highs, the company is still cheap.
Overall, it was an outstanding week for Premium stocks
As we move forward through this earnings period, we’re pretty happy with the vast majority of our highlights here at Premium.
Next week is going to be just as busy, as we see some very popular Premium stocks in Docebo, Calian, Park Lawn Corp and Savaria post earnings.
Of note, Well Health, Enghouse and BRP Inc have yet to report when they will be releasing earnings. So, we will be keeping an eye on that!
Any questions about these reports, the changing of our Premium prices for new members, just ask!
