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Our thoughts are with anyone impacted by the situation at CFB Wainwright and a big thank you to the first responders and healthcare professionals involved. They’re a different breed and we’re lucky to have them.
WHAT'S ON TAP
HOT OFF THE PRESS
$41B leaves Canada
Canada saw a net securities outflow of $41B in August, as Canadian investors added $24B of foreign securities…
… driven by $29B of buying in US equities (mainly large-cap tech)…
… which offset the seventh straight month of selling US treasuries ($9B).
Here at home, foreign investors cut their Canadian holdings by $17B - with a broad-based $10B reduction in equities…
… and $11B of selling in federal bonds, the first outflow in the last 11 months - which was partly offset by buying in provincial and corporate issues.
Housing starts hit 249K
Housing starts came in ahead of estimates at 249K thanks to a slight rebound in multi-family contribution…
… which drove Y/Y improvement on a mixed bag at the provincial level - with strength in BC, Manitoba, and New Brunswick partly offset by a sharp decline in Quebec.
While unabsorbed inventory inched higher after last month’s decline…
… multi-unit absorption improved to a one-year high, as construction activity continues to grind lower…
… resulting in continued share gains for purpose-built rental, a necessary trade-off to restore balance in the market and bring back development activity.
ON OUR RADAR
GAINERS & LOSERS
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Kits Eyecare (KITS) fell as much as 10% after its co-founder and COO transitioned to an advisory role, which brought in a big bid to end the day down 5%…
… as investors placed bets that the selling was overdone. On a fundamental basis the business has grown substantially, with revenue nearly tripling since its IPO…
… even with some recent deceleration weighing on shares, which rebounded in Q3 based on preliminary results calling for revenue at the top end of guidance.
With a mid-20s run-rate growth target for the next few years supported by 8-10% growth in online eyecare…
We're still looking at 25% as a growth target for this year. And I expect, in that neighborhood every year is a bit different, but I expect it'll be similar in 2027 and 2028.
… the company is transitioning to an operating leverage story, aiming to push more revenue through to the bottom line…
… driving expansion towards management’s longer term 15% EBITDA margin target.
The plan is going to grow the Gross Margin line, continue to grow revenue and hold the expenses to get us over 10% adjusted EBITDA on the way to 15%.
With active customers and repeat revenue scaling steadily, Kits looks to be delivering on its top line growth algorithm to get there…
… so it’s a matter of execution from here, which should drive investor confidence and multiple expansion if they can deliver.
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