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WHAT'S ON TAP
HOT OFF THE PRESS
Unemployment rises on 50K full-time losses
The unemployment rate rose to 6.9% in April, missing expectations for a flat print…
… on the back of a near-50K loss in full-time jobs, which are down more than 110K through the first four months of the year.
At the industry level, results were mixed…
… and with job vacancies still in a lull, it’s unlikely we see green across the board any time soon…
… or a big improvement in the 22.5% of job seekers in long-term unemployment, which sits roughly 5% higher than the pre-pandemic average of 17.1%.
ON OUR RADAR
Flagging Exchange Income (EIF), which was down 6% after announcing it lost its bid for a large Australian surveillance contract…
… which management previously said could double revenue in its higher margin ISR business if they were successful.
During the quarter, we also submitted our proposal to the Australian government for their maritime surveillance contract. This is the Super Bowl of maritime surveillance contracts, and we were 1 of 3 bidders.
With shares re-rating over the past year on the defence theme, the failed bid could weigh on valuation in the near-term…
… but with Carney’s Defence Industrial Strategy creating surveillance opportunities in the north, the negative sentiment could be short-lived.
GAINERS & LOSERS
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Extendicare (EXE) ran 11% on its Q1 print, which crushed estimates on the back of near-35% growth in home health care - partly due to its $570M CBI deal…
… but mostly driven by persistently high organic growth, the duration of which has surprised management…
I’ll candidly say that we expected the volume growth to moderate long before now. It has been a surprise to us, you know, to the degree to which it has, you know, continued to increase, and we just don’t know when it will slow down.
… and helped the margin profile, given the segment runs at better unit economics than the long-term care business.
While management expects a return to high single-digit growth is on the horizon, investors are looking further out - pricing EXE at its peak forward EBITDA multiple.
After starting Friday up 10% on its Q4 beat, Aritzia (ATZ) finished up 5% - with US growth of nearly 45% Y/Y…
… underpinned by steady growth in new locations, which management highlighted are paying for themselves in less than one year after opening…
… thanks in part to the eCommerce business, which creates brand awareness and provides the company with consumer location data to de-risk a launch.
As management looks to more-than-double US store count, that flywheel strategy should be repeatable - and with ATZ trading at nearly 20x NTM EBITDA…
… investors are likely thinking about international expansion beyond that.
EARNINGS
FRIDAY’S EARNINGS
| Company | Actual | Consensus |
|---|---|---|
| 🇨🇦 Emera (EMA) | 1.37 | 1.20 |
| 🇨🇦 Algonquin (AQN) | 0.13 | 0.11 |
| 🇨🇦 Lassonde (LAS-A) | 5.36 | 5.06 |
| 🇨🇦 Enbridge (ENB) | 0.98 | 0.94 |
| 🇨🇦 Brookfield (BAM) | 0.43 | 0.41 |
| 🇨🇦 CES Energy (CEU) | 0.24 | 0.24 |
TODAY’S EARNINGS
| Company | Time | Consensus |
|---|---|---|
| 🇨🇦 Cineplex (CGX) | AM | -0.30 |
| 🇨🇦 Exchange Income (EIF) | PM | 0.36 |
| 🇨🇦 Chemtrade (CHE-U) | PM | 0.25 |
| 🇨🇦 Ovintiv (OVV) | PM | 1.83 |
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