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S&P/TSX Composite Index: Modest Losses As Market Prepares For ‘Big Six’ Earnings

— Benjamin A. Smith

The S&P/TSX Composite Index (INDEXTSI:OSPTX) fell modestly on Tuesday, with cannabis, tech and health-care stocks shoring up a sluggish session. Market volume declined for the fourth consecutive session as the market awaits ‘Big Six’ bank earnings beginning Thursday. The results should set the tone for further activity early next week.

The Index meandered erratically to finish down 13.20 points, settling at 15,439.44. Conflicting weakness in the precious & industrial metals complex weighed on positives in other sectors. Gold (1,332.70/oz, -1.73%), Silver (16.50/oz, -1.76%) and copper $3.2085/lb, -1.84%) paced the group lower. Decliners outpaced advancers 10:6.

On a more positive front, cannabis stocks continued towards a trend of price stabilization. After falling around 35% peak-to-trough from the January highs earlier this month, today’s action is welcome news for the sector. Both large and small cap companies joined the party today.

The group was lead higher by Canopy Growth Corporation (TSE:WEED), up 11.70% to $29.60/share. Canopy launched skyward on news it had received a license to operate British Columbia’s first mega-scale grow-op facility. The rapid licensing of its Aldergrove site is the largest federally licensed cannabis site anywhere in the world.

CanniMed Therapeutics Inc. also made a strong move higher, gaining 8.04% to 36.30/share. No news was released.

Aurora Cannabis Inc. (TSE:ACB), Canopy Growth Corporation (TSE:WEED) and Aphria Inc. (TSE:APH) were the Big Board’s leading volume gainers, only trailing Bombardier Inc. Class B (BBD.B) shares for top honors.

 

Notable Movers

Versabank (TSE:VB): The all-digital bank made another 52-week high today, gaining 2.48% to $8.25/share. The price action continues a recent trend of outperformance versus its larger rivals. Of the other ‘Big Six’ banks, only the Bank of Montreal and Royal Bank of Canada finished positive, with both eking out 0.01c gains. While it isn’t a drastic dichotomy by any means, Versabank’s tendencity to outperform is unmistakable.

Midas Letter recently highlighted Versabank’s strong investment profile.  Our research can be accessed here.

Uni-Select Inc. (TSE:UNS): The automotive distributor finished down 11.80% to $22.94/share. This weakness was attributed to mediocre earnings. Although sales were up 42.6% to $415.0 million in Q4 and up 21.0% to $1,448.3 million for full year 2017, this was mainly due to acquisitions. Organic growth from existing divisions was tepid, thus spooking investors.

The company admitted as much, with President and Chief Executive Officer Henry Buckley saying, “Our fourth quarter performance was mixed… we continued to work through some challenges at FinishMaster US”.

Bombardier Inc. Class B (BBD.B): Canada’s bellweather aerospace giant continued its impressive run, up 5.09% to $3.92/share. Bombardier is now up 26% in the last 8 trading sessions—quite impressive when you consider it has almost 2 billion shares outstanding. Today’s move is a bullish extension propelled by a strong earnings performance registered last week. Bombardier shares are now trading at their highest levels since December 2014.

 

News That Moved Markets

Osisko Gold Royalties Ltd.  Osisko Gold Royalties Reports Fourth Quarter and Full Year 2017 Results

Canopy Growth Corporation  Canopy Growth obtains license for first mega-scale BC facility

Uni-Select Inc. Uni-Select reports growth in sales and EBITDA (1) for its Q4 and full year 2017

Stats

S&P/TSX Composite Index: Dollar Gainers

Name
Symbol
Last Price
Chg
% Chg
Open
Volume
Fairfax Financial Holdings Limited Subordinate Voting Shares FFH 645.43 16.43 2.61% 629.01 71,804
Molson Coors Canada Inc. Class A Exchangeable Shares TPX.A 109.20 9.29 9.30% 109.19 200
Shopify Inc. Class A Subordinate Voting Shares SHOP 180.68 8.08 4.68% 172.49 601,412
Canadian Tire Corporation Limited Class A Non-Voting Shares CTC.A 177.80 3.48 2.00% 173.95 263,102
CNOOC Limited american depositary receipts CNU 183.45 3.29 1.83% 183.46 449
Canopy Growth Corporation WEED 29.60 3.10 11.70% 27.38 8,067,827
CanniMed Therapeutics Inc. CMED 36.30 2.70 8.04% 33.89 300,294
Molson Coors Canada Inc. Class B Exchangeable Shares TPX.B 109.00 2.65 2.49% 110.98 3,155
Constellation Software Inc. CSU 840.00 2.32 0.28% 827.11 34,848
BetaPro S&P 500 VIX Short-Term Futures 2x Daily Bull ETF HVU 27.50 2.21 8.74% 26.88 630,828

S&P/TSX Composite Index: Dollar Losers

Name
Symbol
Last Price
Chg
% Chg
Open
Volume
Morguard Corporation MRC 164.00 -8.99 -5.20% 170.11 4,044
Uni-Select Inc. UNS 22.94 -3.07 -11.80% 23.74 1,025,906
Canadian Pacific Railway Limited CP 230.17 -2.74 -1.18% 231.03 282,728
Dollarama Inc. DOL 157.00 -1.60 -1.01% 157.00 211,635
Agnico Eagle Mines Limited AEM 52.70 -1.42 -2.62% 53.57 1,004,538
Cogeco Inc. Subordinate Voting Shares CGO 71.54 -1.26 -1.73% 72.81 8,449
Element Fleet Management Corp. 6.50% Cumulative 5-Year Rate Reset Preferred Shares Series G EFN.PR.G 19.50 -1.25 -6.02% 20.79 10,125
E-L Financial Corporation Limited ELF 794.80 -1.20 -0.15% 794.80 373
BRP Inc. Subordinate Voting Shares DOO 47.82 -1.18 -2.41% 48.89 163,274
Endeavour Mining Corporation Ordinary Shares EDV 22.61 -1.16 -4.88% 23.16 154,676

S&P/TSX Composite Index: Most Actives

Name
Symbol
Last Price
Chg
% Chg
Open
Volume
Bombardier Inc. Class B Subordinate Voting Shares BBD.B 3.92 0.19 5.09% 3.68 16,291,790
Aurora Cannabis Inc. ACB 10.96 0.83 8.19% 10.16 14,632,982
Canopy Growth Corporation WEED 29.60 3.10 11.70% 27.38 8,067,827
Aphria Inc. APH 14.93 0.87 6.19% 14.05 4,406,676
Cenovus Energy Inc. CVE 9.40 -0.01 -0.11% 9.51 3,803,038
Precision Drilling Corporation PD 4.44 0.14 3.26% 4.35 3,579,886
Element Fleet Management Corp. EFN 4.40 -0.18 -3.93% 4.65 3,317,735
Goldcorp Inc. G 16.60 -0.34 -2.01% 16.69 3,309,236
Manulife Financial Corporation MFC 24.68 -0.26 -1.04% 24.70 3,240,743
Kinross Gold Corporation K 4.79 -0.16 -3.23% 4.91 3,193,620

(Source: TMX Money)

Benjamin A. Smith

Benjamin A. Smith

Ben is a research analyst and capital markets professional with nearly 20 years of experience. His areas of expertise are broad-based, and include extensive knowledge of macro economics, stock/derivative trading, commodity complexes, cryptocurrencies and technical/quant analysis. He also maintains an particular affinity for U.S. politics and the macro-regulatory environment facing...
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bsmith@midasletter.com |

Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

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