JMRD Market Observer for February 19, 2016

February 19, 2016

**February 19th Issue of The JMRD Market Observer**

 

In This Week’s JMRD Market Observer

 

  • JMRD Client Conference Call
  • JMRD Basket Corner
  • Retirement Corner
  • Week at a Glance
  • Reads of the week
  • Economic Calendar
  • Earnings Reports

 

 

JMRD Client Conference Call

 

Thanks again for joining us on the conference call.  We hope it was informative.  For those of you who were unable to join us, the playback information is:

 

  • 1-800-408-3053; Passcode: 137792562#
  • This recording will be active for a period of 30 days and will expire on 2016/03/20.  For technical questions or for more information, please call 1 800 667-3678 or email conferencingcustomercare@bell.ca. For international technical support, call 1 416 203-7016.

We started recording the call at 2:55 pm so there is a stretch of silence for the first five minutes.  To move ahead see the controls below.

 

If you have any questions, please do not hesitate to reach out to any team member at any time.

 

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JMRD Basket Corner

 

DIG Basket

 

Emera (EMA) – EMA reported Q4 2015 adj. EBITDA of $279 mln versus NBF’s estimate of $263 mln on stronger than expected Energy trading and marketing contributions. Meanwhile, the company reported Q4 EPS (FD) of $0.74 (excl. non-recurring items) versus NBF estimate of $0.59 (consensus: $0.60). The company’s US$10.4 bln acquisition of TECO Energy remains on track to close in mid-2016, having recently received TECO shareholder, FERC and Hart-Scott-Rodino approvals. The New Mexico Public Regulation Commission has set a hearing to begin on May 23rd. (Full note attached)

Emera Inc.

 

Hydro One (H) – Hydro One Ltd. reported Q4 adj. EBITDA of $435 million, in line with NBF’s estimate of $437 million (consensus: $442-mln). Meanwhile, Q4 adj. EPS (excl. non-recurring IPO-related items) of $0.20 came in slightly ahead of NBF’s estimate and consensus of $0.18 on lower than expected interest expense. (Full note attached)

Hydro One Ltd.

 

All-Cap Growth Basket

Constellation Software (CSU) – Constellation announced Q4 revenue of $512M (consensus $489 mln) was up 16% y/y. Constant currency organic revenue growth improved to 4% y/y compared to 1% in Q3, 2% in Q2 and ~4% prior to that for two years. The Public segment had ~5% constant currency organic growth. The revenue beat was mostly from recurring maintenance revenue (we believe partly from price increases at TSS) and hardware revenue related to various large projects in the transit vertical. Maintenance revenue was a record 64% of total revenue for the year.

 

Exco Technologies (XTC) – Exco announced on Tuesday that it has signed a conditional purchase agreement to acquire a group of private companies (the “Target”) organized under the laws of Mexico and Michigan, whereby a wholly-owned U.S. subsidiary of Exco intends to acquire all of the shares of the Target. Pursuant to the terms of the agreement, the transaction value, excluding assumed debt of US$4 million, totals approximately US$73 million. Assuming the transaction is completed, Exco intends to fund this amount with a combination of cash on hand, part of the proceeds from a new C$100M committed operating credit facility and notes payable to certain shareholders of the Target, which are due over the subsequent three years. The transaction will not require significant integration or restructuring charges and is expected to be immediately accretive to Exco’s earnings per share. The Target generated revenue of approximately C$115M (equivalent) in 2015. Founded in the 1990’s, the Target is a leading tier 2 supplier of interior trim components to a diversified group of North American automotive customers. Following the announcement, Exco traded higher by 15% this week.

 

U.S. Growth Basket

 

Six Flags Entertainment (SIX) – Six Flags announced on Thursday that Q4 results swung to an unexpected profit in the final quarter of the year as the top line saw more-than-expected growth on rising attendance at the company’s theme parks. The Grand Prairie, Texas-based company, with 18 parks in the U.S., Mexico and Canada, said attendance rose 22% from a year earlier to 5.2 million guests.

 

 

Retirement Corner

 

 

 

 

Week at a Glance

 

Full report attached.

Week at a Glance

 

 

Reads of the Week

 

 

 

 

 

 

 

 

 

 

Economic Reports

 

Monday February 22nd – US Manufacturing PMI

Tuesday February 23rd – US Consumer Confidence, US Existing Home Sale and US Home Price Index Change

Wednesday February 24th – US New Home Sales; US Services PMI

Thursday February 25th – US Initial Jobless Claims; US Durable Goods

Friday February 26th – US GDP, US Personal Spending, US Personal Income, U. of Michigan Consumer Confidence

 

Earnings Reports

 

Monday February 22nd – None

Tuesday February 23rd – BMO, National Bank, DH Corp.

Wednesday February 24th – Encana, Gildan Activewear, Innergex Renewable, Northland Power, Royal Bank, Progressive Waste, L Brands, Target

Thursday February 25th – Altagas, CIBC, CCL Industries, Loblaw Cos, Pason Systems, Pembina Pipeline Corp, Ritchie Brothers, Stantec, TD Bank, Best Buy, Kraft Heinz

Friday February 26th – Husky Energy, Magna

 

 

Have a good weekend!

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