A roundup of some of the North American equities making moves in both directions today
On the rise
Cannabis company Aphria Inc. (APHA-T) jumped 15.5 per cent on Tuesday after it reported its second consecutive quarter of profitable growth, posting first-quarter net income of $16.4-million or 7 cents a share in the latest three month period. Revenue rose 849 per cent from a year earlier to $126.1-million.
Aphria said the strong showing “keeps us on track to achieve our fiscal year 2020 financial outlook.”
CannTrust Holdings Inc. (TRST-T) jumped 51.7 per cent after revealing it will destroy $77-million worth of cannabis in an attempt to get Health Canada to restore its licences, $26-million more than the previously disclosed estimate of the amount it would have to discard.
The cannabis regulator suspended the company’s growing and processing licences on Sept. 17. Federal investigators discovered in mid-June that CannTrust had grown thousands of kilograms of cannabis in unlicensed parts of its greenhouse facility in Pelham, Ont., and later determined that the company had also breached regulations at its manufacturing plant in Vaughan, Ont. The unlicensed growing took place in 2018 and early 2019.
-David Milstead and Mark Rendell
See also: CannTrust license suspensions leave analysts puzzled over grower’s value
Aimia Inc. (AIM-T) rose 1.2 per cent after Mittleman Brothers LLC, which owns or exercises control over more than 23 per cent of its outstanding shares, issued a statement Tuesday saying it has requested the Toronto Stock Exchange “closely monitor any acquisition, financing, issuance of securities, or other defensive tactic or potentially-dilutive transaction or series of transactions proposed by Aimia” until after the Jan. 24 shareholder meeting is held and the composition of Aimia’s board is determined by shareholders.
Mittleman also said it’s asking the TSX to “require that any such transaction or series of transactions be approved by shareholders as a condition of the TSX’s consent.”
Wesdome Gold Mines Ltd. (WDO-T) sat 6.3 per cent higher after raising its full-year gold production target.
Industrial Alliance Securities analyst George Topping said: “We expect costs to be on the low end of the US$985/oz AISC guidance for the year. High grades (up to 50g/t) at the 303 lens continue to drive performance and management has stated publically that the thick, high grade zone can be accessed well into next year. The stock has recently fallen as the gold price has consolidated indicating the market wasn’t expecting these production results.”
Shares of Johnson & Johnson (JNJ-N) increased 1.6 per cent after it boosted its profit forecast for the year on Tuesday following better-than-expected quarterly earnings on stronger prescription sales of its psoriasis treatment Stelara and cancer drug Imbruvica.
J&J shares have been under pressure this year, widely underperforming the S&P healthcare sector, as the company faces more than 13,000 lawsuits tied to antipsychotic drug Risperdal as well as a range of lawsuits involving its baby powder, opioids, medical devices and other products.
J&J did not report litigation expenses for the third quarter and its legal costs over the nine-month period remained at $832 million, as was reported at the end of the second quarter.
JPMorgan Chase & Co. (JPM-N) shares were up 3 per cent after the bank reported an 8.4-per-cent increase in quarterly profit.
Net income for the quarter was US$9.08-billion, or US$2.68 per share, compared with US$8.38-billion, or US$2.34 per share, a year ago.
Revenue at three of the bank’s four main businesses rose, allaying concerns about the impact of an escalating U.S.-China trade war, slowing global growth and low interest rates.
“The consumer remains healthy with growth in wages and spending, combined with strong balance sheets and low unemployment levels,” chief executive officer Jamie Dimon said in a statement.
BlackRock Inc. (BLK-N), the world’s largest asset manager, was up 2.4 per cent after exceeding analysts’ estimates for quarterly profit on Tuesday, as investors poured money into its fixed-income funds and cash management business amid worries about global growth.
The company attracted US$84.25-billion in new money during the third quarter, boosting the total assets it manages to US$6.96-trillion.
Investors preferred BlackRock’s low-fee passive-investment products over its actively managed funds. BlackRock’s iShares ETFs took in US$41.5-billion of new money, up 15 per cent from the prior quarter.
See also: BlackRock bets on the circular economy with new fund
Wells Fargo & Co. (WFC-N) gained 1.7 per cent after it reported a 26 per cent fall in quarterly profit on Tuesday, as the lender braced for additional legal expenses tied to a sales practices scandal that erupted more than three years ago.
Net income applicable to common stock fell to $4.04-billion, or 92 cents per share, in the third quarter ended Sept. 30, from $5.45-billion, or $1.13 per share, a year earlier. Analysts had expected a profit of $1.15 per share, according to IBES data from Refinitiv, but it was not immediately clear if the numbers were comparable.
Citigroup Inc. (C-N) increased 1.4 per cent after it reported a 6-per-cent rise in third-quarter profit on Tuesday, driven by growth in its investment banking business and a smaller tax bill.
Citi, the most global of the U.S. banks, said revenue in its consumer unit rose 4 per cent excluding the impact of currency fluctuations, outpacing its institutional clients business where revenue grew 3 per cent.
Consumer business was padded by more U.S. credit card customers beginning to pay interest as promotional periods wore off. North America branded card revenue jumped 11 per cent in the third quarter. Expenses in the consumer business fell 2 per cent.
UnitedHealth Group Inc. (UNH-N) rose 8.1 per cent after providing an optimistic outlook for 2020 profit, saying it expected growth to be at least 13 per cent, which outpaces current Wall Street estimates and sent its shares up as much as 8.6 per cent.
The largest U.S. health insurer, which also raised its 2019 earnings forecast for the third time this year, is targeting earnings growth of between 13 per cent and 16 per cent in the long term.
Wall Street analysts had forecast growth of 11 per cent next year.
Goldman Sachs Group Inc. (GS-N) gained 0.3 per cent after it reported a 27-per-cent slump in quarterly profit, hit by lower fees from advising on deals and weakness in underwriting.
Revenue at three of its four major businesses fell, led by declines in investment banking due to fewer M&As and IPOs.
The bank’s net earnings applicable to common shareholders fell to US$1.79-billion in the quarter ended Sept. 30 from US$2.45-billion a year ago. Earnings per share fell to US$4.79 from US$6.28 a year earlier Total net revenue fell 6 per cent to US$8.32 billion. Analysts on average had expected earnings of US$4.81 per share and revenue of US$8.31-billion, according to the IBES estimate from Refinitiv.
“Overall, GS posted mixed results this quarter. While the top line beat to us was a positive, it was driven by more trading which tends to be less persistent and investment banking results were weak,” analysts at Keefe, Bruyette & Woods said in a note to clients on Tuesday.
Pivot Technology Solutions Inc. (PTG-T) rose 1.4 per cent on news California chipmaker Intel Corp. has agreed to purchase a software business from the Toronto-based information technology firm for US$27-million
Intel said it would purchase Smart Edge, a software business that is designed to help split up data and store it closer to users to make computing devices respond faster.
In a research note released Tuesday afternoon, Industrial Alliance Securities analyst Gianluca Tucci said: “Pivot continues to deliver robust Adj. EBITDA & cash-flow at a more value-add revenue base with a focus on higher profitability of each revenue dollar. The reductions in operating expenses are impressive, evident and will become ever more obvious if and when major spending returns to levels witnessed in prior years. We believe much of the core legacy/integration issues at Pivot were addressed in 2018 and the Company is in a much better position today to focus on shareholder value creation as evidenced by today’s news. We note cash flow and gross profit remain healthy despite fluctuations in quarterly revenue which have become less volatile in the past few quarters. The developments at Smart Edge are material validators and confirmation of value additive, disruptive technology and Pivot now benefits from a preferred partnership agreement with its sale announcement to Intel. The recent credit facility renewal and extension at better terms adds a de-risking element to PTG’s balance sheet and should also be viewed as a positive.”
On the decline
Canadian mining company Alamos Gold Inc. (AGI-T) slid 12.1 per cent after suspending construction of a new Turkish gold mine after it failed to obtain a timely renewal of a mining concession.
The development comes a few months after thousands of protesters flooded the area in the vicinity of the proposed mine in northwestern Turkey, taking issue with deforestation and the company’s planned use of the chemical cyanide at the site.
- Niall McGee
Great Panther Silver Ltd. (GPR-T) plummeted 14.6 per cent after lowering its production forecast for the Tucano Gold Mine in Brazil.
“As previously reported, a geotechnical issue was discovered on Sunday, Oct. 6 in the west wall of the Urucum Central South pit (”UCS"), one of the five pits scheduled for production in the fourth quarter and into next year," it said.
There has since been deterioration to sections of the west wall of the pit, including failures along the lower southern portion of the west wall and cracks along the central section of the pit. As a precautionary measure and following safety protocols, the pit and access roads were closed, an adjacent haul road was re-routed and stockpiles moved away from the pit. As an additional safety precaution and with a view to returning the UCS pit to production, the Company has initiated a full geotechnical review of UCS and all other pits including installing additional monitoring equipment. There have been no safety incidents nor stranded equipment."
The Vancouver-based company now expects to produce between 39,000 and 44,000 ounces of gold, down from 55,000 from 59,600.
After also reduced its full-year forecast for its two Mexican mining operations, the company’s 2019 total gold equivalent guidance now sits at between 150,000 and 160,000 ounces, down from its previous forecast of 171,500 and 185,000 ounces.
With files from Terry Weber, Brenda Bouw and wires
David Leeder