A roundup of some of the North American equities making moves in both directions today
On the rise
TSX-listed gold companies jumped in mid-afternoon trading on Friday after the precious metal reached its highest point in more than two weeks.
Investors were attracted to perceived safe havens after U.S. President Donald Trump threatened increased sanctions on Mexico goods, leading to further global trade fears.
Spot gold jumped 1.3 per cent to $1,305.17 an ounce, having hit its highest since April 11 at $1,306.64.
In Toronto, Yamana Gold Inc. (YRI-T) jumped 8 per cent, while Iamgold Corp. (IMG-T) sat 5 per cent higher.
Teck Resources Ltd. (TECK-B-T) rose 2.9 per cent after announcing an increase in its share buyback by $600-million to $1-billion after the bell on Thursday.
The Vancouver-based miner also announced the signing of a US$2.50-billion limited recourse project financing facility to fund the development of the Quebrada Blanca Phase 2 (“QB2”) project.
In a research note released Friday, Raymond James analyst Brian MacArthur said: “We believe Teck offers good exposure to coal, copper and zinc, and is able to convert EBITDA from its Canadian operations efficiently given its large Canadian tax pools. Given Teck’s long life,low jurisdictional risk, diversified asset base, and our expectation of strong cash flow, we rate the shares Outperform.”
Shares of Lightspeed POS Inc. (LSPD-T), a Montreal-based point-of-sale and e-commerce software provider, rose 13.8 per cent on Friday after it announced the acquisition of Montreal-based Chronogolf, a cloud-based software offering “that facilitates management for golf course operators around the world,” and an existing Lightspeed partner. The price wasn’t disclosed in the release.
After the bell on Thursday, Lightspeed reported total revenue of $21.3-million in the fourth quarter, an increase of 36 per cent from the same quarter last year and ahead of expectations of $20.4-million. Its net loss of $96.1-million or $2.21 per share compared to a net loss of $11.7-million or 40 cents a year ago. Analysts were expecting a loss of $104.9-million.
BMO Nesbitt Burns analyst Thanos Moschopoulos said: “While the stock has already experienced significant multiple expansion since its IPO, we see further potential upside to both the multiple, and our forecasts, given Lightspeed’s growth rate (as FY2020 guidance of 38-42-per-cent year-over-yea growth makes Lightspeed among the fastest-growing public SaaS companies) and the very strong start for Payments.”
On the decline
Enthusiast Gaming Holdings Inc. (EGLX-X) fell 7.4 per cent after it announced a combination with J55 Capital Corp. and Aquilini GameCo Inc., a private Canadian company, “to form the leading publicly traded esports and gaming media organization in North America.”
“Our vision has always been to build the largest, vertically integrated esports and gaming company in the world," said Enthusiast CEO Menashe Kestenbaum. "The merger with Aquilini GameCo and Luminosity was a strategic decision that positions us as a dominant player in the gaming industry and unlocks access to Luminosity’s 50 million dedicated esports fans and one of the largest esports franchises. Through our successful monetization strategy, we will gain extremely valuable knowledge and information on the demographic that will revolutionize the advertising opportunities we can offer to brands and sponsors.”
U.S. automakers dropped on Friday in the wake of Mr. rump’s announcement that the United States will impose a 5-per-cent tariff on all goods coming from Mexico starting on June 10 until illegal immigration is stopped.
Carmakers have relied upon Mexico’s cheap labour, trade deals and proximity to the United States.
Shares of General Motors Co. (GM-N) slid 4.3 per cent, while those of Ford Motor Co. (F-N) fell 2.3 per cent.
See also: How Trump’s trade tariff threat has put Mexico’s back to the wall
Canadian auto parts companies also declined in reaction to Mr. Trump’s tariff threats.
Shares of Magna International Inc. (MG-T) fell 2.5 per cent, while Linamar Corp. (LNR-T) and Martinrea International Inc. (MRE-T) dipped 3.4 per cent and 4 per cent, respectively.
Gap Inc. (GPS-N) plummeted 9.5 per cent after it cut its 2019 profit forecast. The San Francisco-based apparel retailer now expects 2019 adjusted earnings of US$2.05 to US$2.15 per share, from a previous range of US$2.40 to US$2.55.
Citi analyst Paul Lejuez said: “There weren’t many bright spots in 1Q. Gap comp [drop of] 10 per cent was a major deceleration (vs. F18 down 5 per cent), ON [Old Navy] had its second quarter in a row of negative comps (down 1 per cent), inventory was up 10 per cent at the end of 1Q (up 5 per cent excluding unique items) and trends so far in 2Q are weak. While management lowered F19 guidance from $2.40-2.55 to $2.05-2.15, guidance still suggests 2H19 performance improves significantly. Despite weakening margins and cash flows, management is committed to the Old Navy spin-off. However, we question if the spin makes much sense as the two entities are sure to have dis-synergies from supply chain and technology they will need to absorb. While the stock looks cheap on the surface trading at 4.0 times F19E EV/EBITDA, we believe there is risk to EPS this year and beyond (before considering dis-synergies).”
With files from staff and wires
David Leeder