As we suggested was coming in our economic dashboard, retail sales numbers were strong in December, posting the largest monthly gain since mid-2022 at 2.5% (up ~4% Y/Y).

Gains were broad-based, but showed particular strength in categories impacted by the tax-holiday.

Should activity remain elevated here alongside core inflation, the BoC will have a tough time justifying future rate cuts. It seems they don’t need to worry for now though, as early data is suggesting a 0.4% monthly contraction in January.

We briefly covered TFI International’s disappointing results last week, but with the media latching onto the company’s move to redomicile to the U.S. (where 70% of its business is today), we figured the negative read-through to Canadian trucking was worth a closer look.

Let’s call a spade a spade… the Canadian trucking industry has been a shit-show in recent years, with a surge in bankruptcies that should remain elevated when 2024 data is released.

When Pride Group, one of Canada’s largest trucking companies filed for bankruptcy in March, it highlighted an oversupply in the market as a primary driver, but the demand side of the picture doesn’t look much better.

Country-wide inventory investment has been under pressure in recent quarters, while the stock-to-sales ratio remains elevated, indicating companies have to work through existing balances before demand can pick back up.

Less demand for inventory = less demand for trucking, and it’s been reflected in share prices, with the transportation & logistics basket losing >10% on average in a strong year for the market.

The cause of the underperformance isn’t equal, as multiple contraction has hit rail and air names more than trucking companies, which have also been driven lower by negative revisions to street estimates.

Makes me think the non-trucking names could be a safer way to play a transportation recovery, though even within trucking there will be winners and losers as we explore in the full note.

If the above link won’t work, try this: https://www.bullpen.finance/content/42

Innergex (INE) continues to run after its earnings results last Thursday, up 16% since reporting a healthy beat. Negative sentiment has dominated trading on this name in recent years, but feels like the tide could be turning. Another catalyst could keep it moving, given it’s cheap versus peers. It could also perform in a “flight to safety” environment, give the long-term, contractual nature of the business.

IAMGOLD (IMG) fell 9% on Friday, reflecting a market reset after earnings failed to meet high expectations (it’s up ~130% over the last year). While the Côté Gold mine remains a cornerstone asset, investors are scrutinizing cost containment and operational stability.

Emera (EMA) reported full-year 2024 revenue of $7.2B, down ~5% Y/Y driven by asset sales and goodwill impairments. Full-year net income fell 50% to $494M, though Q4 adj. EPS rose 33% to $0.84 thanks to higher utility earnings and tax benefits. The company announced a $20B 5-year capital plan to generate 5-7% annual EPS growth, and is awaiting the sale of New Mexico Gas.

Covalon (COV) posted Q1’25 revenue of $8.2M, up 75% Y/Y, with 73% growth in its U.S. Medical Consumables division. Net income swung to $0.04/share from a loss in the prior year, reflecting cost efficiencies. The firm secured a patent for its VALGuard® product and expanded partnerships with major U.S. healthcare networks.

Secure Waste (SES) saw Q4 revenue drop 26% Y/Y to $332M, though strong margins help it hit the top-end of its full-year EBITDA guide. The company announced a $175M acquisition of a metals recycling business and bought back ~57M shares in 2024 (nearly 20% of shares outstanding). It re-upped the program, so don’t be surprised to see them stay active as they find a home for the $510–540M of adj. EBITDA management expects to deliver this year.