◾ Winners and Losers:
Rumours of financial aid have lifted Air Canada, but BlackBerry is now a “sell.”
WINNERS Air Canada (AC)
Yes, their much-ballyhooed takeover of Air Transat ran into trouble because of delays in approval from European regulators and, yes, stricter quarantine measures for international travel are coming into effect. It was still, however, a good week for Air Canada, at least on the markets. The biggest reason? Rumours continue to swirl that the federal government may soon unveil a financial aid package for the airline industry, which has been hammered hard by COVID-related travel restrictions.
Cineplex (CGX)
You wouldn’t think a movie theatre chain that saw revenue plunge and losses balloon amid COVID-related lockdowns could be a winner. But with lockdowns across the country starting to loosen and more Canadians getting vaccinated (albeit not necessarily as quickly as we’d all like), that’s exactly what investors have made Cineplex in the past week. Fourth-quarter revenue plummeted 88 per cent to $52.5 million from $443 million a year ago. The company also reported a quarterly loss of $230.4 million, compared with a $4.7 million profit a year ago.
Teck Resources (TECK)
Even a quarterly loss of almost half a billion dollars can be good news for share prices if the situation isn’t as bad as the markets were expecting. The Vancouver-based mining and energy firm reported a net fourth-quarter loss of $464 million, driven largely by a $597-million writedown in the value of its stake in an Alberta oilsands project operated by Suncor Energy. Still, Teck shares rose, largely because adjusted fourth-quarter profits were 46 cents per share, while analysts had expected 35 cents.
LOSERS BlackBerry (BB)
Ah, remember the glory days earlier this month when BlackBerry was one of the darlings of the Reddit crowd, which sent it shooting rapidly upward? Long gone, now. The once-mighty Canadian tech company took another hit this week with a report from Canaccord Genuity analyst Michael Walkley. After more than three years of having a “hold” rating on BlackBerry stock, Walkley downgraded BlackBerry to a “sell,” saying the recent run-up in share price made it too expensive relative to the modestly optimistic outlook on the company’s fundamentals.
Franco Nevada (FNV)
Maintaining its dividend wasn’t enough to keep this Torontobased mining company’s shares from slumping even further this week. Franco Nevada announced Feb. 10 that it would be paying a quarterly dividend of 26 cents per share in late March. While that’s the same amount Franco Nevada has been paying since last June, some investors have been grumbling that it’s a bit too conservative for the consistently profitable miner. Franco Nevada reports fiscal fourth-quarter earnings March 8.
MTY Food Group (MTY)
Considering the business they’re in, MTY Food Group did pretty well in the fourth quarter, with profits dipping slightly to $20.1 million from $20.8 million in the same period a year ago, the company announced Thursday. MTY is a franchisor specializing in chains typically found in mall food courts, a sector that has been doubly cursed during COVID. Investors applauded the results, giving MTY a bit of lift in trading Friday. It still wasn’t nearly enough to recoup the pounding MTY shares took earlier in the week. (MTY opened the holiday-shortened week Tuesday at $53.50, and closed at $48.36)