A roundup of some of the North American equities making moves in both directions today
On the rise
Shares of Hudson’s Bay Co. (HBC-T) increased 0.4 per cent on Tuesday after Catalyst Capital Group Inc. launched a bid for its shares, escalating its opposition to a contentious $1-billion privatization offer from the department store chain’s executive chairman.
Catalyst, led by Toronto financier Newton Glassman, plans to offer $10.11 a share in an effort to increase its holdings of shares not controlled by a group led by Richard Baker, HBC’s chairman. Catalyst will offer up to $150-million for as many as 14.8 million shares, it said in a statement.
BRP Inc. (DOO-T) jumped 9.2 per cent in response to a pair of premarket announcements.
The recreational vehicle maker reported the completion of an increase of its term facility. The amendments provide for a new US$335-million tranche of term loans for a total amount of term loans outstanding of US$1.23-billion.
Earlier, the Valcourt, Que.-based company announced the completion of a substantial issuer bid in which it took and paid for 6,342,494 subordinate voting shares at a price of $47.30 per share.
The shares purchased represent an aggregate purchase price of approximately $300-million and represented 6.6 per cent of the total number of BRP’s issued and outstanding shares and multiple voting shares as of July 22.
Restaurant Brands International Inc. (QSR-T) was 1.5 per cent higher after announcing an agreement to develop and open more than 1,500 Popeyes restaurants in China over the next 10 years.
The deal is partnership with TFI TAB Food Investments, which is a quick service restaurant operator in Turkey and China with more than 2,000 restaurants and 50,000 employees.
In the wake of better-than-anticipated second-quarter earnings and a raise in its organic revenue forecast for the fiscal year, shares of Coca-Cola Co. (KO-N) jumped 6.1 per cent.
The world’s biggest beverage maker said on Tuesday it now expected organic revenues to grow 5 per cent in the whole of 2019, up from its previous projection of an increase of about 4 per cent.
Excluding one-time items, it earned 63 U.S. cents per share, 2 U.S. cents above Wall Street’s estimates.
Hasbro Inc. (HAS-Q) rose 9.9 per cent after saying Tuesday it would raise product prices if the United States imposes additional tariffs on Chinese imports.
“The unfortunate thing with tariffs, if they do come into play, is the consumers is ultimately going to feel that price pressure,” Chief Financial Officer Deborah Thomas said after the toymaker announced better-than-anticipated quarterly results.
The company was boosted by higher demand for action toys following the success of Avengers: Endgame and Magic: The Gathering collectible card game.
Net revenue rose 8.9 per cent to US$984.5-million and beat the Street’s US$956.8-million expectation.
Stantec Inc. (STN-T) gained 0.3 per cent after revealing it will lead design of Florida’s US$212-million reconstruction and capacity improvements for Florida’s Turnpike/State Road (SR) 91 in Lake County.
“As part of the project scope, Stantec will lead design of the Turnpike widening, pavement restoration through milling and resurfacing, implementation of all-electronic tolling capabilities, design of future dynamically priced express lanes, emergency shoulder utilization, surveying, lighting, and environmental services," the company said. "Supported by the firm’s national-reaching expertise in transportation, limited access toll facility design and traffic revenue services, a local team from Stantec’s Orlando office will lead this project with statewide support from teams in Deerfield, Coral Gables, Tallahassee, and West Palm Beach. Project design is anticipated for completion January 2022.”
On the decline
Rogers Communications Inc. (RCI-B-T) dipped 0.8 per cent after reporting second-quarter financial results that largely fell marginally below expectations on the Street, despite exhibiting growth in both its wireless and cable segments.
The Toronto-based company reported consolidated revenue of $3.78-billion, up 1 per cent year-over-year and slightly lower than the $3.86-billion projection from analysts. Adjusted earnings per share of $1.16 fell a penny short of the consensus estimate.
In a research note, Desjardins Securities analyst called an acceleration in the growth of wireless average revenue per user (ARPU) “encouraging.”
“Even adjusting for a subscriber base deactivation policy for prepaid, we estimate that postpaid ARPU growth improved by 0.7 per cent sequentially,” he said. “This could lift expectations since this improvement occurred while the company launched ‘unlimited’ plans in the quarter, which some believed could put pressure on ARPU. While we did not expect these unlimited plans to affect 2Q results, the company is entering the period after the launch on a higher ARPU base, which is a positive in our view.”
Mr. Yaghi added: “RCI is trading below the sector on EV/EBITDA despite its strong expected earnings growth, which leads us to reiterate our Buy recommendation."
Shares of Curaleaf Holdings Inc. (CURA-CN) were down over 7 per cent after the U.S. Food and Drug Administration announced that it has issued a warning letter to the Massachusetts-based cannabis company for illegally selling unapproved products containing cannabidiol (CBD) online with unsubstantiated claims that the products treat cancer, Alzheimer’s disease, opioid withdrawal, pain and pet anxiety, among other conditions or diseases.
“As we examine potential regulatory pathways for the lawful marketing of products containing cannabis and cannabis-derived compounds like CBD, protecting and promoting public health remains our top priority. Selling unapproved products with unsubstantiated therapeutic claims — such as claims that CBD products can treat serious diseases and conditions — can put patients and consumers at risk by leading them to put off important medical care. Additionally, there are many unanswered questions about the science, safety, effectiveness and quality of unapproved products containing CBD,” said Acting FDA Commissioner Ned Sharpless, M.D. “Today’s action demonstrates that the agency stands firm in its commitment to continue monitoring the marketplace and protecting the public health by taking action as needed against companies that deceive consumers and put them at risk by illegally selling products marketed for therapeutic uses for which they are not approved, such as those claiming to treat cancer or Alzheimer’s disease. Consumers should beware of purchasing or using any such products.”
Just Energy Group Inc. (JE-T) plummeted 14.5 per cent after announcing management has identified customer enrollment and non-payment issues, primarily in Texas, over the past 12 months.
“As management identified these issues, more robust operational controls were put in place, culminating in numerous improvements being implemented during June and July 2019,” the company said.
“Due to the identified issues, management is updating its provisioning methodology used to estimate its reserve for trade receivables. Management expects an incremental impairment of the Texas residential accounts receivable of approximately CAD $45 to $50 million as of June 30, 2019.”
Lockheed Martin Corp. (LMT-N) finished flat per cent on Tuesday despite reporting a better-than-expected quarterly profit and raised its 2019 profit forecast for the second time in three months, helped by increased demand for its stealth F-35 combat jets and missiles.
SSR Mining Inc. (SSRM-Q; SSRM-T) sat 0.2 per cent lower after it announced that it will acquire the remaining 25-per-cent interest in Puna Operations Inc. from Golden Arrow Resources Corp. (GRG-X) for $34-million.
“This is a positive deal for both parties, in that it allows SSR Mining to consolidate our ownership in Puna Operations and streamline our reporting structure, while benefiting Golden Arrow by providing funding to pursue its exploration projects, eliminating its debt obligation to us, and cancelling our shares in Golden Arrow,” stated CEO Paul Benson. “The Transaction provides SSR Mining with near-term low-risk silver production growth, while allowing Golden Arrow shareholders liquidity and exposure to both Puna Operations and our diversified asset portfolio through ownership of SSR Mining shares.”
Shares of Vancouver-based Golden Arrow fell 23.6 per cent.
With files from staff and wires
David Leeder