A humorous look at the companies that caught our eye, for better or worse, this week
Nautilus Group (DOG)
You don’t need to use a Nautilus machine to work up a sweat. Just buy some Nautilus shares and you’ll be perspiring in no time. Shares of the fitness-equipment maker plunged to the lowest in more than six years after first-quarter revenue tumbled more than 26 per cent, hurt by “sub-optimal advertising” that held back sales of the Max Trainer device and by competition from rivals such as Peloton that are spending aggressively on marketing. Investors are hitting the showers.
A&W Revenue Royalties Income Fund (STAR)
The smiling guy handing out Teen Burgers in the A&W ads? If he wants people to get really excited, he should start handing out A&W stock. Shares of the restaurant’s royalty unit – which licenses A&W’s trademarks to the operating company in exchange for a cut of the revenues – surged after same-store sales leaped 10 per cent in the first quarter, driven by increasing traffic, strong demand for Beyond Meat products and a partnership with Uber Eats. With A&W hiking its distribution for a fifth consecutive quarter, investors are stuffing their faces with cash.
Tucows (DOG)
After Tucows’ disappointing first-quarter results, it’s no wonder investors are mooo-ving to the sidelines. The provider of domain names, mobile phone services and fibre Internet reported a 17.6-per-cent drop in revenue and 24.3-per-cent decline in net income, as year-earlier results benefited from “accelerated revenue recognition … related to a bulk transfer of 2.65 million domain names during that period,” Tucows said. That’s no bull, but investors are still having a cow.
Magna International (DOG)
Business quiz! Shares of auto-parts maker Magna International fell after the company: a) recalled a new driver-assist system after reports that vehicles were bashing into other cars and climbing the curb while attempting to parallel park – just like a lot of human drivers; b) wrote off its fuzzy dice division, citing “changing consumer tastes”; c) cut its sales and profit outlook for the year amid falling expectations for global vehicle production. Answer: c.
Spin Master (DOG)
Playing with toys is fun when you’re a kid. Investing in toy stocks as an adult? Not so much. Hurt by the bankruptcy of Toys "R" Us in the United States and by a later Easter, Spin Master’s first-quarter revenue fell 16.3 per cent as it swung to a net loss of US$20.9-million from a year-earlier profit of US$8.7-million. Even as the company maintained its full-year outlook and said the balance of 2019 “will be more reflective of the underlying strength of our business,” investors threw a temper tantrum and sold their shares.
John Heinzl