In This Week’s Market Observer…
National Bank Financial Regional Conference
- JMRD Basket Corner
- Retirement Corner
- Week at a Glance
- Reads of the week
- Economic Calendar
- Earnings Reports
National Bank Financial Regional Conference
This week Reg, Zach and Jaden represented JMRD at the National Bank Financial Sales Conference at Deerhurst Resort in Huntsville. Fellow colleagues from the Maritimes, Ontario and Manitoba attended the conference. It was a great opportunity to exchange ideas with other Advisors in the firm and to get a broad overview of the progress that our parent company, National Bank, is making in all divisions within the company. It truly was a worthwhile experience and we plan on incorporating a few ideas gleaned from the conference into our JMRD business practices. We look forward to sharing those with you in the near future.
JMRD Basket Corner
Bank of Nova Scotia (BNS) – BNS was upgraded to a ‘sector outperform’ after they announced they would look to monetize some or all of its investments in CI Financial. BNS currently holds 37 per cent of CI shares with a current market value of approximately $3.8 billion. The bank disclosed that the capital associated with its investment in CI will ultimately be redeployed to other strategic priorities. After a slow start to the year, BNS traded at a new year high this week
CI Financial (CIX) – CI sold off 4% on the news of BNS’ decision. Remains a hold in the DIG basket as the core business remains very good and we continue to think the shares will continue to perform, once this overhang is cleared up.
Pembina Pipelines (PPL) – PPL announced that it received commercially binding agreements to underpin construction of its $400M, 55 mbpd, C3+ (propane-plus) Redwater Fractionator III (RFS III) and a $60M, 56-km, new high vapour pressure (HVP)
pipeline lateral from its Brazeau Pipeline System into the Willesden Green area in south-central Alberta. RFS III will increase PPL’s aggregate fractionation capacity at Redwater to 210 mbpd by Q3 2017 and will be designed to accommodate an 18 mbpd de-ethanizer tower in the future. Meanwhile, the HVP pipeline lateral is expected to be commissioned in mid-2015 and will result in an additional 10 mpbd of long-term fractionation capacity at PPL’s Redwater complex. Overall, PPL’s secured capital program now totals ~$4.9 bln, with identified unsecured projects now at ~$1.5 bln. The shares traded to a new year-high on the news before settling back around $44.50.
TELUS (T) – TELUS announced Q1 results that were in-line with expectations. In addition, T will be increasing their dividend by 11.8% year-over-year. This is the company’s seventh dividend increase since announcing their multi-year dividend growth program in May 2011. TELUS traded at a new year-high of $40.97 this week.
All-Cap Growth Basket
Badger Daylighting (BAD) – Badger reported Q1 results this week and the stock sold off 4%. Revenue was up 45% and EBITDA up 24%. However, Cash flow decreased due to compensation charges primarily, and margins fell on higher fuel and labour costs. The growth outlook for the industry remains quite good and the company is up 23% year-to-date. “Badger Daylighting: Lots of growth potential, but you’ll pay for it”
Canadian Energy Services (CEU) – CEU reportedEBITDA of $43.5M which was above NBF & consensus estimates of $39.8M.Both pricing and volume were ahead of NBF estimates, with the biggest derivation being CDN operating days 10% ahead of NBF’s forecast and implying over 34% market share. Day rates, a good indication for overall revenue growth, were also modestly ahead of NBF forecasts. The company also announced a 7% dividend increase and a 3-for-1 stock split to be voted up at the June Annual Meeting.
1) “America’s Retirement Delusion” (Bloomberg)
2) “What comes first — kids or retirement? Plan now or suffer later” (Financial Post)
3) “How living longer can hurt your retirement planning” (The Star) We’re living two years longer on average, according to new statistics. Here’s how to use that information to make sure you don’t outlive your savings.
Week at a Glance
Reads of the Week
“Barry Ritholtz: The 10 Things I’m Watching” (Bloomberg)
“Why the Stock Market Makes You Feel Terrible Every Single Day” (Pragmatic Capitalism)
“5 things to do before selling a winning stock” (Financial Post)
“The downside to the Loonie’s new-found popularity” (Financial Times)
Monday May 19th – Canadian Markets closed for Victoria Day Holiday
Tuesday May 20th – None
Wednesday May 21st – Fed Releases Minutes from April 29-30 FOMC Meeting
Thursday May 22nd – U.S. Initial Jobless Claims, U.S. Existing Home Sales, U.S. Leading Index
Friday May 23rd – Canadian CPI, U.S. New Home Sales
Monday May 19th – None
Tuesday May 20th – Home Deppt
Wednesday May 21st – Lowes Cos
Thursday May 22nd – Toronto-Dominion Bank, Royal Bank
Friday May 23rd – None