|
|
||||
|
|
||||
|
|
||||
|
|
WHAT'S ON TAP
HOT OFF THE PRESS
Equity rotation drives $14B capital outflow
On a net basis security flows were down big in May, with $8B of foreign investment more than offset by $22B of Canadian investment abroad…
… driven by $11B of demand for US corporate bonds, which offset the fourth straight outflow in treasuries.
US equity demand contributed to a similar degree, led by $16B of big tech buying…
… while foreign investors dumped Canadian equities at the fastest pace in over a year, with $16B of selling mainly in resource and manufacturing names.
That was offset by continued appetite for Canadian debt, with $15B of buying split between federal and provincial paper.
Bell’s World Cup windfall should be short-lived
Interesting article out of The Globe indicating that Rogers isn’t the only one set to benefit from sports media, with Bell’s exclusive World Cup rights…
… we’re excited about the FIFA World Cup this summer. We have exclusivity on 104 games across our platforms, which presents a significant audience and monetization opportunity for Bell Media.
… setting the company up for a repeat of the growth it saw in 2022 or better, given the last time the tournament was played there was only 64 games.
Like bars and restaurants, the windfall should be short-lived before investors refocus on core earnings - where subscriber and ARPU growth has been challenging…
… and on the balance sheet, where leverage remains above target despite recent non-core divestitures.
Until those two areas of concern are trending in the right direction, a sustained bid for BCE shares is likely a stretch…
… unless it can get some help from BoC cuts, with the last six decisions being to hold.
ON OUR RADAR
GAINERS & LOSERS
|
|
||||
|
|
||||
|
|
Docebo (DCBO) ran 10% Friday after pre-releasing its Q2, which looks to be largely in line with estimates on ~11% growth in subscription revenue…
… so the outperformance is likely driven by the $70M substantial issuer bid paired with results, as management looks to swallow another 14% of shares outstanding at 2x NTM EV/sales.
It’s not the first SIB by the company, with a $100M program in 2023 and a $60M bid earlier this year…
… but the execution is changing, with the credit facility being the primary funding mechanism this time - given Docebo paid cash for its recent $54M tuck in.
While that likely puts a ceiling on DCBO’s future activity, the cash flowing cohort of small cap software is ramping up their buyback programs…
… in an effort to set a valuation floor and avoid opportunistic takeout bids from private capital.
Was this forwarded to you? Join 10,000+ investors reading The Morning Meeting by clicking the button below.
