Disclosure: Bullpen receives compensation from Altius Minerals for research coverage.
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WHAT'S ON TAP
HOT OFF THE PRESS
Boardwalk’s $292M co-ownership with DGAM
Boardwalk REIT (BEI-U) announced a 50/50 co-ownership with Desjardins GAM, dropping in four assets at their book value ($292M) - which could help address the ~30% discount to reported NAV it currently trades at…
… while also creating an incremental management fee stream and netting the REIT nearly $90M for buybacks, which management has ramped up this year to take advantage of its current valuation.
Similar to Minto before its take-private announcement, Boardwalk is seeing NOI growth slow on the back of compression in occupancy and rents…
… with population headwinds and supply additions in select markets putting pressure on renewals and new leases in the near-term.
The longer term picture for the company’s Alberta-heavy portfolio looks more promising, with interprovincial migration and major infrastructure investment favouring the province…
… and giving management confidence to back up the truck.
ALTIUS MINERALS
Our coverage of Altius Minerals (ALS) is now live. The thesis is simple, so I’ll give it to you in a handful of charts:
Large & diversified royalty platform: Altius focuses its royalty investments on long life assets with exposure to global growth trends. On a NAV basis, its portfolio has exposure to durable themes like electrification (60%), industrialization (17%), and food security (13%).
Strong track record, ample cash: Over its near-30-year history, Altius has developed a track record of successful organic royalty creation and a disciplined approach to new investments…
… and with >$300M of available liquidity before the company’s credit facility gets upsized, it has the balance sheet capacity to fund new opportunities.
Revenue inflection underway: With several prior investments ramping up in the coming years, Altius is in the early innings of royalty revenue acceleration…
… that we estimate will drive a >30% CAGR in adj. cash flow per share from 2026-2030, which can be redeployed into new royalty investments or acquisitions…
… in a sustainable feedback loop, highlighting the compounding effect that makes the royalty model so attractive.
For the PDF version, use the link below:
ON OUR RADAR
Canfor (CFP) announced another saw mill closure, which takes 120M board feet of lumber production offline (2.5% of total)…
… over and above previous cuts from the company and its peers driven by US tariffs. The more slack gets taken out of the market, the sturdier the floor gets on lumber prices - which have risen in six straight PPI prints and could have another leg higher.
GAINERS & LOSERS
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Celestica (CLS) added nearly 10% on its Q2 results, which beat big thanks to 84% Y/Y growth in CCS - prompting an 8% increase to the full-year guide…
… and a preliminary 2027 target of over 65% revenue growth - driven by big wins at OpenAI, AMD, and Google as well as new program introductions in the networking switch business.
For 2027, as a result of exceptionally strong customer demand and new program wins, we expect our revenue growth rate to accelerate as compared to the 65% growth expected in our 2026 annual outlook.
Management expects that to translate to continued margin improvement, so EPS growth should outpace whatever we get on the top line…
… but there’s no such thing as free lunch, with the company’s $1.5B floor on 2027 CapEx up 50% versus last year to support multi-year client demand cycles…
… that analysts continues to chase, making Celestica’s multiple look less aggressive as estimates catch up to reality.
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