A roundup of some of the North American equities making moves in both directions today
On the rise
Meg Energy Corp. (MEG-T) shares rose 9 per cent after Canadian investor Seymour Schulich said he initiated a “big new investment” in the oil sands company in an interview with BNN Bloomberg.
Dollarama Inc. (DOL-T) jumped 9.9 per cent in early afternoon trading on Thursday after reporting better-than-anticipated comparable same-store sales growth in the first quarter.
The discount retailer logged sales and comps of $828-million and 5.8 per cent, respectively, for the period, exceeded the Street’s expectation of $813-million and 2.9 per cent. Earnings per share of 33 cents was a penny less than the consensus forecast.
In a research note, Raymond James analyst Kenric Tyghe said: “While Dollarama reported a F1Q20 miss on EPS of $0.33 versus consensus of $0.34, we expect given a very strong comparable store sales performance (and positive revisions to comparable store sales guidance on value proposition investments resonating), that the small EPS miss will be readily overlooked. The sales increase of 9.5 per cent reflected strong comparable store sales growth of 5.8 per cent, which was driven by an average ticket increase of 4.9 per cent supported by a traffic increase of 0.9 per cent. Comparable store sales growth guidance was increased from a range of 2.5-3.5 per cent to 3.0-4.0 per cent.”
Alacer Gold Corp. (ASR-T) was up 12.1 per cent after the Toronto-based miner announced it has achieved commercial production at its Çöpler sulfide plant in Turkey.
“Achieving commercial production is a significant milestone," said president and CEO Rod Antal. " We continue to tune and optimize the plant and expect quarter-on-quarter improvements over the remainder of 2019. Performance to date provides us with the confidence to reaffirm sulfide plant production and cost guidance for 2019."
It also announced an increase to its Oxide plant guidance to 125,000 to 145,000 from 90,000 to 110,000 ounces due to the continued strong performance.
Transat AT Inc. (TRZ-T) was up 0.7 per cent despite its second-quarter results feeling the effects of higher fuel costs and a weaker Canadian dollar
Before the bell, the Montreal-based airline and vacation operator reported net income attributable to shareholders fell to $2.3-million, or 6 cents a share, from $7.9-million (21 cents) in the same period a year earlier.
Desjardins Securities analyst Benoit Poirier said: “Overall, while TRZ reported decent 2Q results, we believe investors should focus on the ongoing sales process with Air Canada. We remain confident that an agreement will be reached, as there are still two weeks remaining on the exclusivity agreement (ends on June 26, 2019). Assuming a transaction takes place, it will be interesting to see if AC increases its offer given that major shareholders Letko Brosseau and Penderfund Capital Management, which jointly own 21.1 per cent of the total shares, have publicly stated that they intend to vote against the transaction as the price offered is too low. We also understand that there are other parties interested in acquiring TRZ.”
Tyson Foods Inc. (TSN-N) rose 0.7 per cent after the U.S. processor launched its first vegan and mixed protein products.
“The Raised & Rooted brand was created to provide great-tasting plant-based and blended foods that are rooted in how people eat today," the company said. "The initial products under this new brand, which will launch with several major retail customers this year, include plant-based nuggets as well as blended burgers made with a combination of beef and plants. In addition, the company’s existing Aidells brand has launched Aidells Whole Blends(TM) sausage and meatballs, made with chicken and plant-based ingredients.”
Shares of vegan burger maker Beyond Meat Inc. (BYND-Q) was up 1.7 per cent.
AutoCanada Inc. (ACQ-T) shares rose 4.6 per cent after it announced agreements to sell three parcels of real estate to Automotive Properties Real Estate Investment Trust (APR.UN-T) for a total of approximately $30.4-million.
“Upon closing of the transaction, three AutoCanada dealerships will enter into 19-year, triple-net leases with the REIT,” it stated in a release. “The REIT has also agreed to fund future capital development expenses on one of the properties up to $2.5-million.”
Separately, Automotive Properties REIT announced it plans to acquire the Audi Queensway automotive dealership property from the Dilawri Group for $36.5-million and said it has an agreement to sell seven million of its units on a bought deal basis at a price of $10.45 each to a syndicate of underwriters book run by TD Securities Inc. and BMO Capital Markets for gross proceeds of approximately $73.2-million.
Automotive units sat 3.6 per cent.
Callaway Golf Co. (ELY-N) jumped 14 per cent after hedge fund Jana Partners LLC reported a 9.22-per-cent stake in the company and believes its shares are undervalued.
In a filing with the U.S. Securities and Exchange Commission, Jana said it intends to start discussions with Callaway’s board regarding strategic alternatives, including exploring a sale or asset divestitures.
Shares of Hudson’s Bay Co. (HBC-T) reversed early losses and gained 0.6 per cent after the retailer posted a wider-than-expected loss in the first quarter as it closed some stores and sales at its Lord & Taylor unit fell, adding to pressure on the struggling department store chain as its chairman seeks to take it private.
Excluding items, the company posted a loss of 87 cents per share, wider than the 56 cents loss based on average estimates from 2 analysts, according to IBES data from Refinitiv.
Hexo Corp. (HEXO-T) was down 7.4 per cent after its third-quarter results, released on Wednesday after the bell, fell short of expectations.
Analyst David Kideckel of AltaCorp Capital said: “Overall we view the release as positive as financials were broadly in line with our expectations. Furthermore, management continues to reiterate their confidence in achieving their target of $400-million in revenues by fiscal 2020 and provides additional visibility toward this path, highlighting their intention to expand into the US CBD market in 2020.”
On Thursday, the Gatineau, Que.-based company announced its affiliate, HEXO MED S.A. has received a medical cannabis installation license from the Greek government. It will allow HEXO MED to establish cultivation, processing and manufacturing facilities in the region of Thessaly, Greece.
“With HEXO Corp’s experience in the industry, HEXO MED is poised to become a leader in the European cannabis landscape,” the company said.
Neptune Wellness Solutions Inc. (NEPT-T) dropped 8.9 per cent after reporting a larger-than-anticipated fourth-quarter loss.
On Wednesday, the Laval, Que.-based nutrition products firm reported a loss of $12.4-million, increasing from a $4.8-million loss during the same period a year ago. Revenue fell to $5.7-million from $7-million.
It began commercial production and shipping of cannabis extracts during the last few weeks of the quarter, recording its first cannabis revenues.
“During the first quarter of fiscal year 2020, cannabis extraction operations have been constrained by several factors including limited biomass inventory to extract and constrained extraction capacity,” the company said. "As such, we expect our cannabis extraction revenues for the first quarter of fiscal year 2020 to be lower than $1 million. Pending Health Canada approval of expansion amendments and additional security personnel clearance should alleviate our capacity constraints.
“Based on the total value of extraction and packaging contracts signed to date, we expect that our revenues growth from cannabis extraction and packaging will ramp significantly from the second quarter of fiscal 2020 and onwards.”
With files from Brenda Bouw, staff and wires
David Leeder