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With the holiday Friday, we’ll be back in your inbox Monday - enjoy the long weekend!
WHAT'S ON TAP
HOT OFF THE PRESS
GDP rises on oil & gas and construction
GDP in January shaped up better than expected, gaining 0.1% M/M…
… on the back of a 0.2% rise in goods-producing industries, which offset stagnant growth in services GDP.
At the sector level, the print was carried by oil & gas extraction and construction…
… which notched a third straight sequential gain, driven by increased activity in engineering services - a category with long-term structural tailwinds.
That offset a 1.4% decline in manufacturing, owing to the vehicle production stoppage…
… which should be in the rear-view for February, with preliminary estimates calling for a 0.2% rise in GDP.
Sun Life announces 3 deals for ~$3B
Sun Life (SLF) announced three transactions including buyouts of the remaining stakes in BGO (real estate) and Crescent Capital (credit) for $2.4B, plus a $350M bid for all of Bell Partners…
… which will add ~$10B of multi-family AUM once closed. That should translate to higher fee income…
… and increased contribution from asset management relative to the rest of the platform, as insurance giants continue their push into private strategies.
As SLC scales, the market should assign more weight to the alternatives business - which trades at a higher multiple than traditional L&H insurance.
ON OUR RADAR
Flagging Alberta-based casino operator Gamehost (GH), who’s getting taken out for $280M by Pure Casino Entertainment - a skinny 16% premium…
… or ~9x NTM EBITDA, in-line with the long-term average - which GH shares haven’t revisited since the pandemic despite underlying fundamentals returning to normal.
GAINERS & LOSERS
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Methanex (MX) was down 5% on market optimism around a conclusion in Iran, but is still up over 50% YTD - given it’s the world’s largest supplier of methanol…
… which faces serious disruption from the conflict (not just oil and fertilizer).
Iran puts into the market around 9-10M tonnes a year. And then when you combine other countries that are going to be impacted it’s probably another 9-10M tonnes of a 100M tonne market, but really an internationally traded market of 55M tonnes.
With >30% of the traded supply offline, the company’s pricing is adjusting higher - which should translate to more cash flow…
… given its shipping costs are largely fixed (time charter). Anything incremental should go towards leverage reduction…
… which makes the story cleaner, given the cyclical nature of the business.
INSIDER TRANSACTIONS
| Insider | Company | Value |
|---|---|---|
| Duncan Jessiman | Exchange Income (EIF) | $305K |
| Edward Redmond | Black Diamond (BDI) | $399K |
| Margaret Elekes | Surge Energy (SGY) | $234K |
| Bradley Macson | Total Energy (TOT) | $758K |
| Robert Wildeboer | Martinrea (MRE) | $188K |
| Brian Kaner | Boyd Group (BYD) | $150K |
| Kimberly Morin | Boyd Group (BYD) | $100K |
| Nick Toor | Tidewater (TWM) | $379K |
EARNINGS
TODAY’S EARNINGS
| Company | Time | Consensus |
|---|---|---|
| 🇨🇦 goeasy (GSY) | AM | -8.33 |
| 🇨🇦 Dynamite (GRGD) | AM | 0.67 |
| 🇨🇦 D2L Inc. (DTOL) | PM | 0.13 |
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