VOTED THE WORLD’S BEST INVESTMENT ADVISORY

May 10, 2019 Vol. 51, No. 9. Pages 177-196 $6.00

Aggressive securities demand you invest REAL ESTATE ON RISE EDITOR’S with different trading rules than more stable equities NOTES National Three strategies Bank REIT s of press time, the S&P/TSX outlook gets composite index for high-growth stocks was still hover- hawkish ingA near the all-time high ’ve been in the investment in- for your own trading from our By Matt Kornack and Tal Woolley it set on April 22, up al- dustry since 1990. In my ear- strategies. most 16 per cent year-to- ly years, I was an investment Swing trades (3 days-4 weeks): eal estate equities are date, and the second advisor working with IIROC Swing trades will typically involve tracking the index rela- I(Investment Industry Regulatory very short holding periods –often tively closely year-to-date. quarter has hardly started! Organization of Canada) firms like only days or weeks. As a group, they are up 15 Market euphoria is not Midland Walwyn, Merrill Lynch Buys within the swing trading Rper cent on a total return basis, just confined to Canada. and CIBC Wood Gundy. strategy will be determined by slightly under the TSX composite at The S&P 500 is up more In 2007, I became a discre- concurrently occurring oversold 16 per cent (the underperformance than 17 per cent year-to- tionary portfolio manager and be- signals on a daily chart via: a result of a very weak trading day date; so is the Euro Stoxx gan running a platform that we at • Lower Bollinger Band touch on April 16). The performance of ValueTrend continue to run as an (2 standard deviations from a 20- some rate-sensitive sectors has 50. Japan’s Nikkei 225 has equity model. Prior to becoming a KEITH RICHARDS day Simple Moving Average) been consistent (such as financials, gained more than 13 per portfolio manager and eventually • Lower Zone RSI (Mid-termed up 15 per cent, and utilities at 17 cent as well. Anyone bit- moving to operate my own firm oversold price momentum, lower per cent). Others have been weak- ing their nails over China under OSC (Ontario Securities launch this platform until we were zone below 30) er (such as communication ser- woes may find peace in Commission) regulation, I used to fully confident of the strategy – • Lower Zone Full Stochastics vices, up 11 per cent). trade some very select stocks in a one that would have the potential (Short-termed price momentum, With lower capitalization rates, the fact that Chinese different manner than the “regu- to provide better returns than a lower zone below 20) we have a little more “gas in the stocks have bounced back lar” strategy I used for the majori- conservative strategy, yet still of- Sells are determined by the op- tank” to rethink valuation; conse- too. All of that recovery ty of my clients. These early clients fered ample liquidity within our posite signals from a buy per the quently, we have realigned our tar- has occurred in 2019; the fondly remember my trading now much-larger greater asset above. That is, a touch of the up- get prices. Our base case continues Shanghai composite is up these lower liquidity growth orien- base. And now, at long last, we are per Bollinger Band, and move- to be that rates remain low, but will tated securities during the 1990s. offering this strategy to the appro- ments by RSI above 70, grind slowly higher over time in nearly 30 per cent year- Some have inquired about such an priate clients. Stochastics above 80. We do not tandem with economic growth, to-date. offering at ValueTrend. Today’s article will outline the use stop-loss orders, however a and that the sector will ebb and Tech stocks are clearly The current challenge that Val- three strategies we will be utilizing stop-loss sell signal will be a move flow on this rate volatility. benefiting from the opti- ueTrend faces in providing such within this platform. Rather than below the last significant support Our National Bank Financial mism. Microsoft Corp. an offering is liquidity. Back in the being a “product pitch” – I would level on the daily chart. economics team has reduced their early 1990s, I had a small group of expect that you will gain some in- The top chart on the next page rate expectations over the last year, joined the exclusive “four- clients who had committed a rela- sight on how you can incorporate illustrates the S&P/TSX composite but still remains more hawkish on comma club” on April 25. tively small amount of capital to some trading rules suited to the index from May 7, 2018 to April 1, yields going forward (for example, Microsoft shareholders this more aggressive trading style. more aggressive securities that 2019. On it are marked the estimating a 2.83 per cent 10-year cheered as its latest quar- It was easy to get in and out of you might be exploring. Below is a buy/sell signals for that index us- yield one year out). terly results pushed mar- the positions given the smaller description of our strategies with a ing this system. By legging in and We do see a few themes that amounts of capital I was trading. few examples of how we might uti- ket capitalization above ValueTrend didn’t want to lize them. I hope you gain insight See Richards on page 179 See Kornack and Woolley on page 179 US$1 trillion for the first time, the third company to do so (Apple Inc. and THE SENTIMENT PIE Amazon.com Inc. sur- You sold your business; now what? passed that mark in 2018). By Mark Halpern Bears rewards you wanted. Your family to do with the sale proceeds and 18.4% While many investors needs your help and you’ve been how to move on with life. The may be weighing the ou worked for years to thinking for some time about how more a business owner is tied to hottest stocks’ potential build your business and to pass on your wealth to your his or her company or associated to reach even-higher all- then you sold it when the children and grandchildren in the with its brand, the more difficult it time was right. Daily ritu- most tax-efficient way possible. is to make the transition. time highs, they may alsY have changed irrevocably as Regular readers already know Then there are those who want to consider Canadi- you embark on the next chapter of that choosing to be charitable have sold their business and Bulls your life, no longer unlocking the means the tax department will get stayed on to work for the new 53.4% Unsure an preferred shares, 28.2% which are still smarting doors every morning, chatting less of your money, so it just owners. Coming in to work every The bullpen has shrunk slightly in the from their last market with staff, pumping up your sales makes sense to build a charitable day as an employee could be team and a hundred other things legacy into your plans while tough after years of being the two weeks since we last examined the pummelling despite be- before locking up at the end of the demonstrating philanthropic val- boss, but having the sale pro- Sentiment Pie. At 53.9 per cent last is- ing tied to some of Cana- day. Life has certainly changed, ues to your family. ceeds in your bank account eases sue, the bulls’ share shrinks 50 basis da’s strongest companies and you may feel a bit uncertain OK, but how do you do this? the adjustment (pain) of listening points to 53.4 per cent. Meanwhile, about your financial future. First, be prepared for what to the new person in charge. the bears have also retreated some- (read more in our “best what. The bear cave now makes up Hopefully, the sale of your could be a great adjustment. Rec- Many entrepreneurs and busi- buys” section). – R.P. 18.4 per cent of the pie, down from business garnered the financial ognize your new reality as a re- ness owners build other, parallel 19.2 per cent. The uncertain market tiree and take a deep, long assets like real estate, private equi- watchers’ ranks grew from 26.9 per \ breath. If you had been building ty and investments. If someone in cent to 28.2 per cent. up your business for decades, not the business was looking after Source: Investor’s Intelligence. getting up every morning to go to those assets for you, you may be work can cause major disrup- forced to seek an outside trusted tions and create a void that you professional to help you. hadn’t expected. Experts say a good transition is Indeed, many entrepreneurs a process, not an event, and find the first 12 months after the should take place over a few years sale to be the period of greatest uncertainty, as they consider what See Halpern on page 178 178 / May 10, 2019 INVESTOR’S DIGEST Issue 9 / 19 Translate plans into a dollar figure Halpern from front page • Best Doctors® Insur- surance policy whose proceeds will ance.com/toolkits.html. The 2018 ance Global Medical CareTM. benefit both your estate and the Toolkit now includes: Estate Di- © Copyright 2019 by MPL Communications Inc. to allow entrepreneurs to Comfort is a key con- charitable causes you care about. rectory Estate Planning Checklist All rights reserved. think about what they sideration in any invest- Many options are available to Executor Duties ChecklistBusness want to do and how to go ment plan. The last thing save on taxes now, or later, when Owners Planning Guide . Visit Customer Service about it. According to a re- you need to do is stay your estate is being settled. MarkHalpernBlog.com and sign 416-869-1177 [email protected] cent study, for two-third of awake nights worrying As a society, we are all very for- up for free updates. post-sale entrepreneurs, it about the soundness of tunate to be living longer. But from Editor takes at least two years to your investments. a financial perspective, we need Robin Poon make the transition. Mark Halpern Managing your own much more money to live longer. Associate Editor When it comes to dealing with business was a full-time job at Many financial planners make IN THIS ISSUE Manal Ali the financial aspects of your future, which you excelled. You may not their recommendations based on a Production 3M...... 193 a smart first step is sitting down be quite as astute, or successful, in life expectancy of age 90. What AbbVie...... 194 Rick Bender with an experienced professional your new role as portfolio manag- happens if you live to 100? Where’s Acreage Holdings...... 184 Subscription Services planner to develop financial and er presiding over the proceeds of the money coming from to cover Akumin ...... 190 Manager estate plans. This is the time to get your business sale. Consider en- those unexpected years? Allied Properties REIT ...... 179 Sher Mohammad Altria Group...... 194 personal, determine your needs gaging professional help to man- As we age, our topics of conver- Advertising Sales American Express ...... 194 (416) 869-1177 and set priorities in retirement age that hard-earned money. sation with friends and family also Aphria ...... 195 [email protected] with a new plan to help accom- mature to include health issues, ARC Document Solutions...... 194 plish your goals. A sound plan needs medical appointments, medica- Ascendant Resources ...... 189 AutoCanada...... 186 MPL Communications Inc. A study by RBC Wealth Man- professional help tions and treatments. Naturally, we Axis Auto Finance ...... 184 Stephen D. Pepper, agement reported that just over become concerned about looking Barrick Gold ...... 189 Chairman half the people canvassed had a Many people believe that they after ourselves. BlackBerry ...... 179,184 Barrie Martland, will in place. Meanwhile, one in can sell their current home, espe- There is a 30 per cent chance BP PLC ...... 195 President Brookfield Asset Management Inc. three had done nothing at all to cially in this overheated housing you will need long-term care at age Preference Shares Series 26...... 187 Funded by the prepare for passing their wealth on market, then downsize and use the 65 and a 50 per cent chance by age Brookfield Infrastructure Partners LP .....194 Government to the next generation. difference for investing. But that all 75. Going into a long-term care fa- BRP...... 191 hinges on where you live, your pre- cility easily costs $10,000 per BTB REIT ...... 179 of Canada Calian Group...... 188 What to do with ferred lifestyle and your general fi- month. Investor’s Digest is published Carvana...... 194 the proceeds nancial position. Staying put in your own home Centric Health...... 191 every two weeks, 24 times a year It’s quite possible that your cur- gets very expensive if you require Chartwell Retirement Residences...... 179 by MPL Communications Inc., According to one survey, many rent estate plan, including your will 24-7 care. Many people mistaken- Cogeco Communications...... 189 133 Richmond Street West, Toron- Cohen & Steers Infrastructure Fund ...... 195 entrepreneurs who sold their busi- and insurance arrangements, don’t ly believe that our overworked uni- Cohen & Steers Realty Shares Fund ...... 195 to, M5H 3M8. Subscription rate, nesses invested at least some of the match your new life. The life insur- versal health-care system will cover Cominar REIT ...... 179 Canada and U.S., one year $137. profits from the sale within the first ance you bought in the past may the health costs associated with eye Conifex Timber ...... 187 Single issue: $6. Tel. 416-869- 12 months; others put the money not be appropriate today. Figura- care, drugs, physiotherapy and Corus Entertainment ...... 189,195 Cresco Labs ...... 192 1177, Fax 416-869-0456. in the bank for a year. About 20 per tively speaking, your old financial nursing homes. Crombie REIT ...... 179 Investor’s Digest of Canada cent invested the funds in a new furniture doesn’t fit your current Long-Term Care Insurance is Delta 9 Cannabis...... 187 presents opinions and recommenda- business. architecture. an inexpensive defensive strategy Dow...... 193 After you have set your retire- A proper will puts you in charge to preserve your capital, and some Dream Office REIT...... 179 tions deemed to be of interest to Enbridge ...... 195 Canadian investors. Information pre- ment objectives, evaluated your of what eventually happens to your policies feature a return of premi- Encana ...... 191 sented herein, while obtained from risk tolerance and calculated how assets. You can direct who gets um (ROP) option that pays back all Enterprise Product Partners LP ...... 194 Fortress Global Enterprises ...... 190 sources we believe reliable, is not much income you will require ev- what and when. In many of your premiums if you don’t ery year, the sale proceeds can be provinces, if you die without a will, make a claim. Gibson Energy...... 185 guaranteed. The opinions expressed GlaxoSmithKline PLC...... 194 are strictly those of the writers and invested confidently in a well- the courts alone will decide how to You have gone through a major Goodfood Market ...... 187 planned asset mix with appropri- divide your assets. Your spouse change – you’ve sold the business H&R REIT...... 179 are not necessarily endorsed by In- ate rates of return and tax and children will have no say in that took up a huge part of your life. HEXO ...... 188 vestor’s Digest nor independently considerations. those decisions. Just as you made careful decisions Hilton Worldwide Holdings ...... 194 verified. Correspondents writing for InVitae...... 195 The next step in the process is A recent study of wealthy Cana- while building, growing and then Investor’s Digest may have an in- Jaguar Mining...... 186 to translate your plans into a solid dians revealed that only one in four selling your company, this is the KraneShares CSI China Internet ETF ...... 179 terest in the investments mentioned number – how much you will need had a full strategy in place for time to consult a professional advi- Largo Resources...... 191,194 in their stories. The directors, em- to fund your retirement. transferring their wealth to subse- sor to guide you through the pro- Lightspeed POS...... 190 ployees and contributing editors of MediPharm Labs ...... 191 Much has been written about quent generations. One in three cess of making thoughtful MedMen Enterprises...... 195 MPL Communications Inc. may how much money is needed for re- said they hadn’t done anything in decisions for the rest of your life. Minto Apartment REIT ...... 182 from time to time be beneficial own- tirement. Estimates range from 46 that regard. Give us a call. We would be Mosaic...... 193 ers of the securities referred to in the NEO Lithium ...... 186 per cent to 70 per cent of your pre- Developing an estate plan while more than happy to help. Neo Performance Materials ...... 188 Investor’s Digest of Canada. retirement income. There is no you are alive will preserve and pro- NextEra Energy ...... 194 Investor’s Digest of Canada cookie-cutter solution, because all tect your assets as well as direct Mark Halpern is one of Canada’s Nike ...... 193 welcomes company studies, indus- of it depends on you, what you how they are distributed upon top life insurance advisors, a Cer- Novan...... 194 Onex ...... 188 try surveys and other reports for want to do in retirement and how death. Most importantly, your plan tified Financial Planner (CFP), Paddy Power Betfair PLC ...... 194 possible publication when submit- you want to spend your money. will maximize the size of your es- Trust and Estate Practitioner Park Lawn...... 184 ted by analysts, brokers and indi- When it comes to their financial tate by incorporating strategies to (TEP) and CEO of WEALTHin- PFB ...... 190 plan, people in retirement (includ- minimize the taxes that can quick- surance.com®. He guides suc- PROREIT...... 182 viduals. All material should be RioCan REIT...... 179 submitted to the Editor. Investor’s ing those who didn’t have a busi- ly erode your financial legacy. cessful business owners, who are Roots ...... 185 Digest is not responsible for mate- ness to sell) are sometimes too Former business owners should already challenged for time, Roxgold ...... 186 rial sent for editorial consideration. risk-averse to invest in anything check out products such as pre- through the complex process of Royal Dutch Shell PLC ADR...... 195 other than ultra-conservative, low- scribed rate loans to help in in- ensuring the people and organi- Schlumberger...... 195 Investor’s Digest reports on in- Shaw Communications ...... 195 yield and highly-taxed assets like come splitting to reduce the overall zations they care about are taken vestments — it does not sell them. SNC-Lavalin Group ...... 189 GICs. This approach, they reason, family tax bill. You may want to care of. If you are like his other Neither the Digest nor MPL Com- Standard Life Aberdeen PLC ...... 195 will provide much-needed stabili- consider an alter-ego trust that al- successful business-owner Stornoway Diamond ...... 189 munications Inc. has any connec- ty, limit downside risk and deliver lows you to defer tax of capital clients, you are looking to reduce Summit Industrial Income REIT...... 179,182 Superior Gold...... 184 tion with any bank, brokerage or reasonably consistent rates of re- gains until the assets are sold or your tax obligations, preserve other financial institution. Tandem Diabetes Care ...... 195 turn overall. Unfortunately, the net you pass away. You must be 65 or your wealth and leave a legacy. Terra Firma Capital ...... 188 Reproduction is allowed only on after-tax returns are paltry. older and the sole beneficiary of all Incompletions rob us of energy. Tesla ...... 193 written permission. Information In these days of low interest income or capital of the trust dur- Mark collaborates with your pro- Theratechnologies...... 189 presented herein, while obtained TransCanada Corp. Preferred rates and high taxes, you might ing your lifetime. fessional advisory team to Shares Series 9 ...... 187 from sources we believe reliable, is want to consider alternative in- These trusts also avoid probate achieve your desired outcomes. Tricon Capital Group ...... 179 not guaranteed. vestments in unique financial in- and legal fees on death, provide His approach is simple. He Trulieve Cannabis...... 185 struments that continue to enjoy potential creditor protection and makes sure what is important to UDR...... 195 Business Number 12184 4328 VersaPay ...... 184 RT0001. ISSN 0047-1356. special tax-free treatment under enable the transfer of assets to the you gets done. He gets you orga- Village Farms International...... 188 Investor’s Digest of Canada Canada’s Income Tax Act, namely trust without being taxed on capi- nized, provides a big picture view Wajax...... 192 was voted the World’s Best Invest- Life Insurance products. tal gains. of your financial affairs, deter- Walt Disney ...... 193 These products are worth con- mines your strategy and helps Wasatch-Hoisington U.S. ment Advisory by the Washington- Treasury Fund...... 195 based Newsletter and Electronic sidering: Be charitable you take action. He will simplify WCM Focused International Publishers Foundation in 2006 for • Annuities; the complicated, so you and your Growth Fund Investor Class...... 195 • Insured Annuities; Several opportunities to be family can rest easy. He can be Welltower...... 195 the fifth time. • Segregated Funds; charitable (and tax-savvy) are reached at 416-364-2929, toll- Wingstop...... 193 Return undeliverable Canadian WPT Industrial REIT...... 179 • Permanent Life Insurance; available. The CPP Philanthropy™ free at 1-866-566-2001 or addresses to MPL Communica- • Joint and Last-To-Die Life strategy, explained in my Novem- [email protected]. ❒ From time to time, we make our subscription list tions Inc., 402-133 Richmond St. available to companies and organizations whose Insurance; ber 2017 Investor’s Digest article, Visit WEALTHinsurance.com products and services we believe may interest you. W. Toronto ON M5H 3M8 • Long-Term Care Insurance; allows you to use your monthly and get your FREE Estate Plan- If you do not want your name to be made available, please check here and return with your mailing label. Next issue May 24 and CPP benefits to fund a large life in- ning Toolkit at WEALTHinsur- Issue 9 / 19 INVESTOR’S DIGEST May 10, 2019 / 179 KWEB may be forming typical mid-term setup Richards from front page targets, should they be met, may platforms. If you are interested, pressed or implied by such for- sources; however, no warranty can occur over a few months. please contact either Craig Au- ward-looking statements and you be made as to its accuracy or com- out in two- to three-trade incre- Longer-termed trades coin, our fundamental analyst, or will not unduly rely on such for- pleteness. Before acting on any of ments (i.e. _ to 1/3rd of the allotted (6 months-plus): myself at ValueTrend for a full de- ward-looking statements. Every the above, please consult an ap- capital for this trade deployed/sig- Longer termed trades will typi- scription of the VTAGS and to dis- effort has been made to compile propriate professional regarding nal), it provided good short-termed cally have an equally weighted bias cuss how we can administer your this material from reliable your particular circumstances. entry and exit strategies, had one of technical and fundamental anal- entire portfolio needs. used an ETF that mimicked the in- ysis for entry or exit timing. dex. The manager’s discretion will The strategy will examine tradi- Keith on BNN Bloomberg determine if the trade will be done tional technical basing patterns, or in increments and at what percent- contained trading patterns. A test Keith’s next BNN Bloomberg age allocation. of a mid- to long-termed trend line television appearance is on Mid-termed trades (4 weeks-6 will signal buys. Fundamental Wednesday, May 1 at 6 p.m. Keith months): Technical analysis will analysis will focus on longer-term appears regularly on BNN bias decisions, but fundamentals undervalued stocks or those with Bloomberg’s Market Call to answer will be respected as value or growth mid- to-longer-termed growth po- viewer questions about the techni- catalysts. Buys and sells within the tential. A longer-term track record cal analysis of stock trends, and to mid-termed trading strategy will be of continuous proven growth and provide unique insights on the fac- determined by chart patterns on a stability is not necessary. tors of technical analysis used in weekly and/or daily chart. These We will be looking for the future successful investment manage- patterns include: growth potential which may be un- ment. (Note: Times and dates may • Traditional breakout patterns derappreciated in the current envi- be subject to change.) from a technical base; or ronment. Our intention will be to If you have questions about the • A bounce off the lower support invest in securities that have an in- technical analysis of stock trends zone within a sideways trading pat- trinsic value much higher than cur- for individual stocks, be sure to tern. rent valuation. As with mid-termed phone in with your questions to Equities, ETFs and commodity trades: Sell at technical targets Keith during the show. Call toll-free ETFs will be reviewed for these which could include technical re- at 1-855-326-6266 or email your trades. A fundamental undervalu- sistance or upper trend channel questions ahead of time (specify ation or higher growth potential lines. A sell will also be triggered by they are for Keith) to market- are criteria in the case of an indi- a break in trend. [email protected]. vidual equity (that is, not a com- The stop-loss sell signal will be modity or ETF). a move below the last significant Keith Richards is Chief Portfolio If we believe a catalyst is immi- support level on the chart. Black- Manager & President of Value- nent in the next 30 days to six Berry Ltd. (BB-TSX, $12.04; BB- Trend Wealth Management. He months, we will buy a position in NYSE, US$8.91) (see bottom chart) can be contacted at info@value- the security so long as the technical is a good example of a stock that trend.ca. He may hold positions in profile is bullish. Sell at technical traded between 2012-19 within a the securities mentioned. The in- targets. Stop-loss sell signal will be trend channel. You can see the buy formation provided is general in a move below the last significant and sell points on its chart below. nature and does not represent in- support level on the chart. The swings typically occur over vestment advice. It is subject to The China Internet fund that a one- to two-year time frame. change without notice and is KraneShares offers, the Krane- based on the perspectives and Shares CSI China Internet ETF For those interested opinions of the writer only. It may (KWEB-NYSE/Arca, US$48.50) also contain projections or other looks to be a typical mid-termed Our ValueTrend Aggressive “forward-looking statements”. trading setup (see middle chart). Af- Growth Strategy (VTAGS) official- There is significant risk that for- ter breaking out of a technical base ly goes live on June 1, 2019. The ward-looking statements will not that followed a downward trend VTAGS strategy will not be offered prove to be accurate and actual (lower dashed line), the ETF targets as a standalone product for new results, performance, or achieve- the higher dashed line. clients; you must hold a minimum ments could differ materially from The relatively fast movements of $500,000 in family assets with any future results, performance, or on this chart indicate that future us diversified through our other achievements that may be ex- Crombie, RioCan projects key ‘proofs of concept’

Kornack and Woolley from front page view, or even alter sentiment. “Quebec-style” seniors apartment This is mostly a downtown phe- dustrial REIT (WPT.U-TSX, These include Crombie REIT building works in Ontario. nomenon as suburban markets US$13.65) should put up solid fig- may stand out in the first quarter: (CRR.UN-TSX, $14.36), which is We do not expect a material continue to see higher vacancy ures as well, but potentially lag- • Multi-family vs. Old Man building Davie in Vancouver; Ri- departure in 2019 first-quarter op- rates (nationally, not just in these ging its Canadian peers. Winter: The winter weather may oCan REIT (REI.UN-TSX, $25.76) erations relative to 2018’s fourth two regions). While near-term prospects are have put some modest pressure with its Kingly, ePlace and eCen- quarter. Looking at each segment: Allied Properties REIT bright, the prospect of an eco- on operating expenses through- tral projects in Toronto, H&R Retail: Over the past several (AP.UN-TSX, $47.81) should see nomic correction or reduction in out the first three months of the REIT (HR.UN-TSX, $22.64), years, the Canadian retail REITs some slowing in organic growth duplicative space requirements by year, which could create some building Jackson Park in New have had to work through several levels, however, as occupancy retailers rationalizing their supply variance versus consensus, but York City; Tricon Capital Group large, challenging retail bankrupt- gains will be limited going forward chains in an e-commerce domi- this is unlikely to be enough of a Inc. (TCN-TSX, $10.70) with The cies (Sears, Target). While some (the portfolio is essentially full) – nated world could possibly threat- factor that would really change Selby in Toronto; and Chartwell smaller retailers have announced the mission critical portfolio being en the long-term outlook. our views. This risk can also ex- Retirement Residences (CSH- bankruptcies and store closures a wild card. The market will con- Multi-family: While weather tend to Cominar REIT (CUF.UN- TSX, $14.68) with The Sumach in (Payless, Ann Taylor), we note tinue to grapple with pricing de- may muddy the waters when look- TSX, $11.37) and BTB REIT Toronto. that these store closures should velopment deliveries after 2021 ing at multi-family performance in (BTB.UN-TSX. $4.86), since they The Crombie and RioCan devel- generally be more manageable, and how this will impact vacancy 2019’s first three months, we focus still have some gross leasing ex- opments are important as “proofs given smaller footprints and low- and rent appreciation for Allied more on rent growth than margins posure in Quebec. of concept” for their nascent multi- er exposure within the publicly and Dream Office REIT (D.UN- (and our estimates are reflective of • Senior housing vs. the flu: Na- family businesses. traded universe. TSX, $23.24) in particular. this as we aren’t building in signif- tionwide flu outbreaks in long- H&R’s Jackson Park project will Overall, we expect stable or- Industrial: Industrial remains a icant improvement in margins go- term care facilities are down be interesting to follow given its ganic growth from our retail uni- “hot” asset class nationally, not ing forward). Regardless, we significantly this year. As well, size and the euphoria/disappoint- verse, consistent with what we saw just regionally. Availability rates in expect this to again be the seg- dominant flu strains this year im- ment cycle it went through with in the last three months of 2018, multiple Canadian markets are at ment with the best operating per- pact the young more than the el- the Amazon HQ2 saga. namely average same property net historic lows, and rents have been formance given shorter lease derly. This could lead to some Tricon’s Selby is important to operating income (SP-NOI) adjusting faster than we would duration and positive fundamen- operational upside across the establishing credibility for and growth of 2.1 per cent. have previously expected. tals (notwithstanding the slower group and aid in leasing. enhancing the valuation of Office: Fundamentally speak- This gives us some confidence turnover and snowy or generally • Development completions in the balance of its future Canadian ing, downtown Toronto and Van- that 2019 organic growth figures cold weather). 2019: There are a few names where multi-family development couver should remain strong, for Summit Industrial Income we think positive development pipeline. And finally, The Sumach with leasing spreads on renewal REIT (SMU.UN-TSX, $11.57) will Matt Kornack and Tal Woolley completions over the balance of is important, as it is Chartwell’s and turnover in the high-single- accelerate from somewhat disap- are equity research analysts at 2019 could enhance a more bullish first chance to see how a more to low-double-digit percentages. pointing results in 2018. WPT In- National Bank Financial. 180 / May 10, 2019 INVESTOR’S DIGEST Issue 9 / 19 INVESTING 101 EXPANDING YOUR INVESTMENT KNOWLEDGE

high yield, above seven per cent and higher, is too high. These Forget about stocks will either be speculative (offering a high yield to entice in- vestors), or stocks which may be experiencing financial difficulty share price and (the perception of the stock is negative, driving down the price). However, there are still a couple keep your eyes of choices to be made involving yields below seven per cent. Two possible scenarios to con- sider are the following: 1. A stock on income instead with a low dividend yield of 1.5 per cent and less, but with a fairly high Retired Edmonton certified management dividend growth rate of around 10 per cent to 12 per cent per year, or accountant and Investor’s Digest reader 2. A stock with an average divi- dend yield of 2.5 per cent to five Henry Mah reminds us that steady dividends per cent with an average dividend keep paying even when markets are rough growth rate of around five per cent to eight per cent. I recommend that there is a Excerpted with permission of au- hold only quality equities with at place in one’s portfolio for both, thor. All rights reserved. least 10 years of positive growing but my preference would be to earnings and a history of passing hold a majority of stocks with a ven with severe market along a percentage of those earn- starting dividend yield of be- fluctuations, the benefits ings to the shareholder. tween 2.5 to five per cent. Aver- of income growth invest- Why not just buy an ETF? age-dividend yield stocks offer ing are real and substan- ETFs are fast becoming the higher income from the start Etial. Remember, with income in- choice of many investors. They than low-yield stocks, and likely vesting we are not watching the are a way to have a diversified more sustainable dividend price of the stocks, but the income portfolio of stocks or bonds in a growth over time. This is espe- those stocks provide. And this is single investment and can be cially true if the stock has a long what I want you to understand. traded just like a stock. The fees history of growing the dividend at By investing in "income-earn- are low and they offer vast diversi- a reasonable rate, around five per ing" stocks (which I will discuss lat- fication, a way to "cover all the cent to eight per cent. er in this book), you will see your bases", if you will. For example, a stock with an income grow each year regardless Some suggest that if you own initial dividend yield of four per of how much you invest, whether around three to five ETFs you’ll cent which grows its dividend five the market is up or down, even if cover the entire Canadian, U.S., per cent per year would have a you stop adding funds to your Emerging and International mar- like me, you’ve read other invest- loss or lawsuit? The question is, can yield of 7.92 per cent after 15 years, holdings. Of course, your income kets. However, there are now about ing books, you may wonder how the decrease be explained, and is it which I feel is very reasonable. Low will grow faster the more you in- 22 Canadian ETF providers and anyone could simplify the process expected to continue or is it a short- initial dividend yield around 0.62 vest, but the ultimate goal is always 495 ETFs available to choose from, of selecting and evaluating stocks. term adjustment? per cent and growth of 15 per cent income growth. Did I forget to with new ETFs coming out almost Well, you are in for a surprise, be- The lower the yield, the less cur- per year would result in a 4.4 per mention price? No, because our weekly. Considering ETFs can con- cause I found it so simple I wonder rent income, but if the dividend cent dividend yield after 15 years. eyes are on the income. tain hundreds, if not thousands of why everyone does not do it. growth is at a higher rate, then over Not a great yield after 15 years, Once you’ve started saving for individual stocks, it is no longer a the long term, the dividend growth but price growth may be higher. your future, I suggest the next step simple choice, is it? Your Ever Growing Income: will likely drive the price of the Stocks with a low yield and high is to develop an investment strat- Let me say that there is no best The Rising Yield on stock higher. dividend growth usually do offer egy. Here you have lots of choices, method to invest and ETFs may be Investments Payout ratio is the portion of higher capital appreciation (the but where to start and which to a reasonable choice for those who the company’s annual earnings be- price of their shares growing), pro- choose? Do I start buying stocks have set market returns as their ob- By Henry Mah ing paid out as dividends. Let’s vided they can continue to main- and try to sell when they rise 15 jective. But, from an "income" per- Henry Mah consider a company’s payout ratio. tain their high dividend growth per cent? Do I follow BNN Market spective, I do have a few objections Copyright 2018 For most companies 60 per cent to rate (usually over 10 per cent). Call and select their recommend- to them, mainly because: They $17.33, 148 pages 75 per cent is a reasonable maxi- We can’t predict the future ed three picks? Do I buy a group of hold too many stocks, the good, mum, but utility companies usual- growth rate of each stock, but we exchange-traded funds (ETFs) bad and in-between, which must ly go higher, around 80 per cent. do have support for our assump- and hope for market returns, or do result in average or lower income The steps are so simple, that if Because they often have long-term tions every time they pay and raise I try to figure out how to start a and returns, you answer "yes" to the very first agreements and regulated prices, their dividend. If the low-yield, Value or Growth portfolio because You have no control over the question on any stock you’re re- they can afford to pay more of their high-growth company can main- my ultimate goal is to beat the stocks chosen or their weighting searching, then you do not need earnings out as dividends. tain its high growth rate, then the market return? within the ETF (for example, one to proceed further. The stock An example of such a company stock will offer a higher total re- That’s the problem many in- stock may be 3.5 per cent, while would be immediately eliminat- would be Fortis Inc. Their payout turn than the average-yield stocks vestors face and, unfortunately, another .05 per cent). The fund ed as a quality dividend growth ratio has ranged from 65 per cent in the long run. the majority will lose money try- needs to trade (constant buying (DG) stock. to 91 per cent, but the company I feel comfortable with the hand- ing to make guesswork their mar- and selling) to rebalance. The other three questions can has still managed to raise its divi- ful of steps I have provided and my ket strategy. Yes, money can be Most ETFs try to match the per- be considered guidelines and are dend for over 44 years to date. In experience with this method over made, it has been done, but those formance to the market or index not as fixed as the first. my opinion, this makes utilities an the years. that succeed will often be a small they represent. Since the financial The Four Guiding Rules: Has attractive stock purchase. The point I am trying to make is minority. crisis of 2008, the market has gen- the company cut their dividend in that my strategy is about simplifi- Investing for income (divi- erally been on an upswing. But I do the past 10 years, Yes or No? Avoid cyclical stocks cation, but again I must stress that dends) means you will look for wonder how ETFs will do during Has the company paid a divi- your comfort level is the priority, companies that pay you dividends the next major correction or ex- dend for a minimum of 10 years I mentioned avoiding cyclical feel free to research as many forms for buying and holding their tended sideways market. (25 or more is even better)? stocks earlier, now I’d like to ex- of analysis as you wish. I have nar- shares. To achieve a growing in- Personally, I do not think they Has the company had a consis- plain further. Cyclical stocks are rowed a fairly large selection of come, the company should in- will do well. Remember, if our ob- tent record of raising their divi- those affected by the ups and companies to a few key dividend crease the dividend over time, jective is long-term income dend for 10 years (The more often downs in the overall economy, growth stocks using yield and divi- thereby providing you with more growth, you will find that ETFs the increase, the better the stock). such as airlines, autos, technology, dend growth as our key evaluation income for each share you own, don’t provide the income growth Has the dividend grown over most energy, retail, consumer and measurement. and not requiring you to sell shares that individual stocks do. the past 10 years by at least 75 per mining. Dividends are real and rel- I then applied even more tests to receive the higher income. Your As I’ve said before, not all divi- cent? evant markers, meaning the com- for further consideration. It isn’t income will be generated from dend growth stocks are created When there is a sudden or ex- pany either has the cash to pay the a perfect test, but I do believe that holding "individual" stocks, not a equal, and after my own successes tended drop in the dividend growth dividend or it does not. Reported by following the process I’ve out- bundle (i.e., exchange-traded and failures at "stock picking" I be- rate one should try to find out why. earnings, on the other hand, may lined and by adding some com- funds) which will most likely in- gan to direct my research specifi- Have earnings dropped? Has the or may not be actual. mon sense for good measure, you clude mediocre stocks. cally to figure out just how to min- company made some large capital What should the dividend should feel comfortable with My strategy works when you imize risk and maximize results. If, expenditure? Has there been a large yield be when buying? I feel that a your results. INVESTOR’S DIGEST 182 / May 10, 2019 Issue 9 / 19 INCOME TRUST INSIDER

Essential information on the most widely covered income trusts by leading analysts across Canada

REITS will be employed directly by the REIT. ization,” according to the analysts. pertise and an extensive network of indus- “The terms of the REIT’s management They add that the internalization is a bit try relationships. PROREIT agreement stipulates that the fee to dilutive to National Bank’s net asset value “While MI.UN has recently added Bigger and better things ahead terminate the agreement is equal to one (NAV) but neutral to funds from operations greater operating scale in the Calgary rental PROREIT (PRV.UN-TSX/VEN, $2.32) is a times management fees and expenses paid (FFO) per unit. market through recent acquisitions, the commercial properties investor with a lot in the most recent fiscal year ($2.3 million or “We would recommend voting in favour REIT benefits from attractive exposure to going for it. $0.024 per unit in 2018). We note that the of the internalization as it is fair in the con- strong underlying apartment property fun- “In our view, PROREIT is a fast-growing, internalization fee is extremely unitholder text of the contractual terms of the agree- damentals in its largest markets of Ottawa well diversified commercial REIT with a friendly when compared to other ment given the growth profile of the REIT and Toronto.” number of attractive characteristics,” say internalization transactions observed in the and the cost of internalization (as well as the As per the final quarter of last year, Minto BMO Capital Markets analysts Jenny Ma Canadian REIT sector over the past number financial impact of the ongoing fees) would signed 250 new leases at average monthly and Michael Hoang in a March 29, 2019 of years,” Ms. Ma and Mr. Hoang conclude. be greater in the future as SMU.UN contin- rent (AMR) increases of eight per cent com- research note. “We believe that the REIT has ues to increase in size,” say Messrs. Kornack pared to previous AMRs. The REIT projects the team in place to continue its rapid Summit Industrial Income REIT and Maqbool. that the weighted average in-place AMR of its growth into a larger diversified commercial Internalization deal announced They stick with their “sector perform” apartment rental units in Canada are still ap- REIT with a presence across Canada.” Summit Industrial Income REIT recommendation with a $11 target unit price proximately eight per cent south of estimat- They reiterate their “market perform” (SMU.UN-TSX, $11.85) has entered a deal to and a 19 times adjusted funds from opera- ed market AMRs. recommendation and their $2.25 target unit internalize its asset and property manage- tions (AFFO) multiple. “MI.Un’s fourth quarter rental income price. The target, they explain, equates to ment services, according to National Bank was over 7.5 per cent above the REIT’s IPO their net asset value (NAV) projection and Financial analysts Matt Kornack and Hus- Minto Apartment REIT forecast, reflecting over 250 basis points implies a six per cent forecasted total return sam Maqbool in a March 26 research note. 2018 fourth-quarter greater-than-expected average occupancy of that includes a yield of 9.1 per cent. “Summit has entered into an agreement performance strong 98.8 per cent on Dec. 31, 2018. For the fourth quarter of 2018, PROREIT with its external manager (Sigma Asset Man- Minto Apartment REIT (MI.UN-TSX, “MI.UN’s units trade at 22.1 times our reported funds from operations (FFO) per agement) to internalize its property and as- $19.51) reported funds from operations estimated 2019 FFO, approximately three diluted unit of $0.041, which was up 10 per set management functions,” say the ana- (FFO) of $0.28 per unit for the fourth quar- per cent above its estimated NAV of $18.75 cent versus the year-earlier quarter. It was lysts.”The Internalization agreement is ex- ter of 2018. (using a 4.25 per cent annual cash net-op- also in line with Ms. Ma and Mr. Hoang’s pected to cost $95 million ($20 million will be But IA Securities analysts Brad Sturges, erating-income cap rate), and yield 2.1 per estimate of $0.039 and the consensus paid in cash using the REIT’s credit facility Carl Burton and Ian Ho say in a March 20, cent (based on estimated 2019 adjusted projection of $0.041. Same property net while $75 million will be satisfied via an eq- 2019 research note that the property in- FFO payout ratio: approximately 56 per operating income (SP NOI), meanwhile, was uity issuance of 6.7 million units at $11.25 per vestor’s FFO for the quarter, was actually cent),” say the analysts. up 10.6 per cent year-over-year, which unit). The transaction is expected to close by $0.21 per unit after excluding $0.01 per unit “In 2019, MI.UN does not have any prin- marked the second consecutive quarter of May 17, 2019 subject to unitholder approval. in non-recurring gains connected to debt re- cipal debt maturities, while in 2020, approx- internal expansion. “Internalization of the REIT’s external tirement. The tally was still a bit north of the imately 12 million of the REIT’s debt matures “By segment, the strongest SP NOI management structure is on the whole a pos- analysts’ estimate of $0.20 and PROREIT’s at a 3.59 per cent weighted average intereset growth was from retail, showing 9.8 per cent itive event, albeit we note that it doesn’t IPO forecast of $0.19 per unit. rate. Notably about 85 per cent of the REIT’s growth year-over-year, and the industrial come without a cost and while the amount “MI.UN remains well positioned to cap- total principal maturities occur after 2022. segment showed 4.4 per cent growth year- being paid can be supported by historical ture above-average growth in net asset val- “MI.UN may have the capacity to gener- over-year.” precedents it is still a significant figure that ue (NAV) per unit and adjusted FFO per ate above-average organic cash flow growth “PROREIT has exercised the option to would have accrued to shareholders under unit from both internal and external growth over the next few years, partly reflecting the internalize its asset management function, an internal structure. Management could avenues,” say Messrs. Sturges, Burton and REIT’s below-market in-place AMRs. which became effective Apr. 1, 2019,” say have been internalized earlier without hav- Ho. “The REIT also may benefit from its “Our unchanged 12-month price target of the analysts. “Mr. James Beckerleg, ing a negative financial impact on the REIT strong sponsorship from the Minto Group $21 is equal to approximately 28.5 times our president and chief executive officer, and and ultimately equity investors financed the of Companies that provides significant op- estimated 2019 adjusted FFO of $0.74 per Mr. Gordon Lawlor, chief financial officer, growth that led to a higher fee on internal- erating, acquisition and development ex- unit. We maintain our ‘buy’ rating.”

INCOME TRUST LAB

Essential information on the most widely covered income trusts by leading analysts across Canada

Apr. 22 52 - wk Market Distributions $ Yield % 2017 Payout Apr. 22 52 - wk Market Distributions $ Yield % 2017 Payout Income Trust Symbol Price $ Range $ Cap (m) $ 2017A 2018A 2019E 2017A 2018E 2019E Ratio % Income Trust Symbol Price $ Range $ Cap (m) $ 2017A 2018A 2019E 2017A 2018E 2019E Ratio %

Invesque Inc.* ...... IVQ.U . . . . .7.10 . . . . .9.10-6.20 . . . .377 . . . . .0.74 . . . . .0.74 . . . .0.74 . . . .8.40 . . . .10.42 . . .10.42 . .86.00 BUSINESS TRUSTS Killam Apartment REIT ...... KMP.UN . .18.67 . . . .19.60-13.89 . .1706 . . . . .0.62 . . . . .0.64 . . . .0.66 . . . .3.60 . . . . .3.43 . . . .3.54 . .84.00 Finance Melcor REIT ...... MR.UN . . . .7.81 . . . . .8.47-6.76 . . . .103 . . . . .0.68 . . . . .0.68 . . . .0.68 . . . .7.93 . . . . .8.71 . . . .8.71 . .99.00 Minto Apartment REIT ...... MI.UN . . . .19.05 . . . .20.58-15.45 . . .470 ...... - ...... 0.20 . . . .0.41 . . . .- ...... 1.05 . . . .2.15 . .56.25 Brookfield Business Partners L.P. BBU.UN . .51.45 . . . .59.66-40.56 . .3405 . . . . .0.33 . . . . .0.33 . . . .0.33 . . . .0.69 . . . . .0.64 . . . .0.64 . .16.00 Morguard REIT ...... MRT.UN . .12.35 . . . .13.61-10.46 . . .750 . . . . .0.96 . . . . .0.96 . . . .0.96 . . . .7.31 . . . . .7.77 . . . .7.77 . .83.50 Brookfield Infra. Partners L.P. .BIP.UN . . .55.13 . . . .57.06-44.04 . .15413 . . . .2.32 . . . . .2.51 . . . .2.68 . . . .4.34 . . . . .4.55 . . . .4.86 . .94.00 Morguard N.A. Res. REIT . . . .MRG.UN . .17.67 . . . .18.57-13.85 . . .596 . . . . .0.64 . . . . .0.66 . . . .0.68 . . . .4.28 . . . . .3.74 . . . .3.84 . .55.20 Industrial Products Nexus REIT ...... NXR.UN . . .2.02 . . . . .2.08-1.77 . . . .202 . . . . .0.16 . . . . .0.16 . . . .0.16 . . . .7.92 . . . . .7.92 . . . .7.92 . .83.30 Northview Apartment REIT . . .NVU.UN . .27.82 . . . .29.51-23.93 . .1566 . . . . .1.63 . . . . .1.63 . . . .1.63 . . . .6.52 . . . . .5.86 . . . .5.86 . .93.30 Chemtrade Logistics I.F...... CHE.UN . . .9.19 . . . . .16.75-8.75 . . .851 . . . . .1.20 . . . . .1.20 . . . .1.20 . . . .7.78 . . . .13.06 . . .13.06 . . .0.00 Northwest Healthcare Prop. REIT NWH.UN . .11.38 . . . . .11.84-9.27 . . .1334 . . . . .0.80 . . . . .0.80 . . . .0.80 . . . .7.05 . . . . .7.03 . . . .7.03 . .98.00 Plaza Retail REIT ...... PLZ.UN . . . .4.13 . . . . .4.40-3.68 . . . .425 . . . . .0.27 . . . . .0.28 . . . .0.28 . . . .6.50 . . . . .6.78 . . . .6.78 . .95.70 Merchandising PRO REIT ...... PRV.UN . . .2.30 . . . . .2.45-1.80 . . . .198 . . . . .0.21 . . . . .0.21 . . . .0.21 . . . .9.13 . . . . .9.13 . . . .9.13 .115.10 A&W Revenue Royalties . . . . .AW.UN . . .39.96 . . . .39.98-30.26 . . .506 . . . . .1.60 . . . . .1.67 . . . .1.76 . . . .4.54 . . . . .4.19 . . . .4.40 . .90.30 Pure Multi-Family REIT L.P.* .RUF.U . . . . .6.52 . . . . .7.40-5.67 . . . .500 . . . . .0.38 . . . . .0.38 . . . .0.38 . . . .4.97 . . . . .5.83 . . . .5.83 .116.50 Boston Pizza Royalties I.F. . . .BPF.UN . .17.30 . . . .20.68-13.82 . . .379 . . . . .1.38 . . . . .1.38 . . . .1.39 . . . .6.30 . . . . .7.98 . . . .8.03 .103.30 Riocan REIT ...... REI.UN . . .25.80 . . . .26.75-22.97 . .7859 . . . . .1.41 . . . . .1.44 . . . .1.44 . . . .5.79 . . . . .5.58 . . . .5.58 . .85.70 Boyd Group I.F...... BYD.UN .146.77 . . .153.06-102.59 .2916 . . . . .0.52 . . . . .0.53 . . . .0.54 . . . .0.51 . . . . .0.36 . . . .0.37 . .10.02 Slate Office REIT ...... SOT.UN . . .5.83 . . . . .8.08-5.65 . . . .404 . . . . .0.75 . . . . .0.75 . . . .0.40 . . . .9.21 . . . .12.86 . . . .6.86 .116.90 Slate Retail REIT ...... SRT.UN . .12.50 . . . .13.10-11.20 . . .528 . . . . .0.82 . . . . .0.85 . . . .0.85 . . . .6.26 . . . . .6.80 . . . .6.80 . .99.50 REAL ESTATE INVESTMENT TRUSTS (REITS) SmartCentres REIT ...... SRU.UN . .33.90 . . . .35.23-28.14 . .4821 . . . . .1.71 . . . . .1.80 . . . .1.80 . . . .5.54 . . . . .5.31 . . . .5.31 . .83.30 Summit Industrial Income REIT SMU.UN . .11.55 . . . . .12.28-8.27 . . .1113 . . . . .0.51 . . . . .0.57 . . . .0.52 . . . .6.97 . . . . .4.94 . . . .4.50 . .81.80 Real Estate True North Commercial REIT .TNT.UN . . .6.61 . . . . .6.90-5.30 . . . .380 . . . . .0.59 . . . . .0.59 . . . .0.59 . . . .8.85 . . . . .8.93 . . . .8.93 .104.00 Allied Properties REIT ...... AP.UN . . .47.86 . . . .49.64-40.50 . .5221 . . . . .1.53 . . . . .1.56 . .160.00 . . . .3.64 . . . . .3.26 . .334.31 . .87.60 WPT Industrial REIT * ...... WIR.U . . . .13.66 . . . .14.69-12.10 . . .778 . . . . .0.76 . . . . .0.76 . . . .0.76 . . . .5.97 . . . . .5.56 . . . .5.56 . .91.10 American Hotel Income Prop. REIT * HOT.U . . . .5.19 . . . . .7.17-4.30 . . . .405 . . . . .0.65 . . . . .0.65 . . . .0.65 . . . .8.96 . . . .12.52 . . .12.49 . .99.70 Artis REIT ...... AX.UN . . . .10.53 . . . . .13.75-8.75 . . .1565 . . . . .1.08 . . . . .0.54 . . . .0.54 . . . .7.66 . . . . .5.13 . . . .5.13 .102.10 RESOURCE TRUSTS Automotive Properties REIT . .APR.UN . .10.71 . . . . .11.47-8.45 . . .233 . . . . .0.80 . . . . .0.80 . . . .0.80 . . . .7.37 . . . . .7.47 . . . .7.47 . .88.50 Oil & Gas - Producers Boardwalk REIT ...... BEI.UN . . .38.91 . . . .52.43-36.47 . .1798 . . . . .2.15 . . . . .1.00 . . . .1.00 . . . .4.80 . . . . .2.57 . . . .2.57 . .45.40 BSR REIT * ...... HOM.U . . . .9.67 . . . . .9.90-7.12 . . . .160 ...... - ...... 0.50 . . . .0.52 . . . .- ...... 5.17 . . . .5.38 . .78.50 Crius Energy Trust ...... KWH.UN . . .8.66 . . . . .8.98-4.01 . . . .491 . . . . .0.81 . . . . .0.82 . . . .0.84 . . .11.45 . . . . .9.47 . . . .9.70 . .90.80 BTB REIT ...... BTB.UN . . .4.81 . . . . .4.94-4.03 . . . .267 . . . . .0.43 . . . . .0.42 . . . .0.42 . . . .9.15 . . . . .8.73 . . . .8.73 .102.00 Cdn Apt. Properties REIT . . . .CAR.UN . .47.84 . . . .52.10-36.86 . .7286 . . . . .1.27 . . . . .1.31 . . . .1.38 . . . .3.42 . . . . .2.74 . . . .2.88 . .65.70 UTILITY TRUSTS Cdn. Tire REIT ...... CRT.UN . .14.00 . . . .14.48-11.26 . .1357 . . . . .0.70 . . . . .0.73 . . . .0.76 . . . .4.84 . . . . .5.20 . . . .5.41 . .76.00 Chartwell Retirement Residences CSH.UN . .14.75 . . . .15.70-13.42 . .3137 . . . . .0.55 . . . . .0.59 . . . .0.60 . . . .3.53 . . . . .3.99 . . . .4.07 . .65.11 Utilities Choice Properties REIT . . . . .CHP.UN . .13.70 . . . .14.37-11.19 . .3807 . . . . .0.73 . . . . .0.74 . . . .0.76 . . . .5.47 . . . . .5.40 . . . .5.55 . .89.50 Brookfield Ren. Energy Partners L.P.* BEP.UN . .31.48 . . . .31.86-24.99 . .5630 . . . . .1.87 . . . . .1.96 . . . .2.06 . . . .5.48 . . . . .6.23 . . . .6.54 . .95.00 Cominar REIT ...... CUF.UN . .11.35 . . . .12.95-10.41 . .2066 . . . . .1.33 . . . . .0.74 . . . .0.72 . . . .9.25 . . . . .6.52 . . . .6.34 . .87.80 Crombie REIT ...... CRR.UN . .14.38 . . . .14.63-12.14 . .1289 . . . . .0.89 . . . . .0.89 . . . .0.89 . . . .6.45 . . . . .6.19 . . . .6.19 . .86.50 Dream Hard Asset Alt. Trust . .DRA.UN . . .7.70 . . . . .7.79-5.90 . . . .556 . . . . .0.33 . . . . .0.37 . . . .0.40 . . . .4.78 . . . . .4.81 . . . .5.19 .111.10 Dream Industrial REIT ...... DIR.UN . . .11.48 . . . . .12.09-9.25 . . .1225 . . . . .0.70 . . . . .0.70 . . . .0.70 . . . .6.70 . . . . .6.10 . . . .6.10 . .81.70 Explanation of Terms Dream Office REIT ...... D.UN . . . . .23.17 . . . .26.01-21.56 . .1368 . . . . .1.25 . . . . .1.00 . . . .1.00 . . . .4.20 . . . . .4.32 . . . .4.32 . .32.00 Market Capitalization is calculated by multiplying the current unit price by the number of units outstanding as of April 2019. Dream Global Int'l REIT . . . . .DRG.UN . .13.80 . . . .15.43-11.58 . .2668 . . . . .0.80 . . . . .0.80 . . . .0.80 . . . .6.55 . . . . .5.80 . . . .5.80 . .27.80 Distribution is the amount of cash the income trust pays or is expected to pay annually. Yield is the annual distribution expressed as Granite REIT ...... GRT.UN . .62.00 . . . .64.66-49.51 . .2832 . . . . .2.60 . . . . .2.72 . . . .2.80 . . . .5.30 . . . . .4.39 . . . .4.52 . .91.00 H&R REIT ...... HR.UN . . .22.70 . . . .23.66-18.94 . .6490 . . . . .1.38 . . . . .1.38 . . . .1.38 . . . .6.46 . . . . .6.08 . . . .6.08 . .79.40 a percentage of the latest unit price. Payout ratio is the proportion of earnings paid out as dividends to shareholders. Inovalis REIT ...... INO.UN . . .10.18 . . . . .10.60-9.12 . . .239 . . . . .0.82 . . . . .0.83 . . . .0.83 . . . .8.27 . . . . .8.15 . . . .8.15 . .95.70 *Distribution and unit price listed in U.S. dollars. InterRent REIT ...... IIP.UN . . . .13.44 . . . . .14.79-9.93 . . .1428 . . . . .0.25 . . . . .0.27 . . . .0.29 . . . .2.72 . . . . .2.01 . . . .2.16 . .58.70 INVESTOR’S DIGEST

184 / May 10, 2019 WHAT THE BROKERS SAY ABOUT CANADIAN STOCKS Issue 9 / 19

THREE-MONTH FOLLOWUP How November research has fared Updated recommendations from our Jan. 4, 2019 edition

BlackBerry Ltd. They add that the company’s the bleeding reasonably well de- terests in 18 states, giving it the The Botanist-branded dispensaries BB-TSX, $13.47 ($11.82*); operations were adversely im- spite the weak quarter and ended broadest footprint – in terms of opened in March in New York and BB-NYSE, US$10.13 (US$8.97*) pacted in a number of ways dur- the year with $17.3 million in cash scale and reach – of any publicly- North Dakota,” say the analysts. BlackBerry announced an ac- ing the final quarter of last year after a net cash loss of $4.6 million. traded multi-state operator (MSO). The New York dispensary is locat- quisition late last year that and these factors led to an anemic “The current cash balance “While cannabis itself is still il- ed on Long Island in Farmingdale, promised to strengthen its pres- quarter as well as a $4.6-million leaves Superior in a solid position legal at the federal level in the Unit- and is the company’s fourth loca- ence in the cybersecurity space, net cash burn. to continue improving operations ed States, we believe that contin- tion in the state (the maximum al- said CIBC World Markets analysts The company reported earn- while maintaining its focus on ex- ued improvement in voter support lowed by current regulations). The Todd Coupland and Amy Dyck in a ings per share (EPS) of -$0.07 per ploration to increase its resource for legalization, and President Fargo location is the first opera- Nov. 18, 2018 research note. share or -$6.7 million, which was in and reserve base.” Donald Trump’s April 2018 com- tional dispensary in North Dakota. The company acquired Cy- line with the analysts’ estimate and Messrs. Ker and Akinwale reit- mitment to back congressional ef- “With the addition of these lo- lance, an artificial intelligence- the consensus projection. erate their “buy” recommendation forts to protect states that have le- cations, Acreage now owns or has based cybersecurity company for “Previously, Superior noted and $1.50 target share price. galized cannabis, will continue to management services agreements US$1.4 billion. While the price was that several factors impacted pro- de-risk cannabis companies with in place (including pending acqui- 10.8 times fiscal 2018 revenue at a duction during the quarter includ- Acreage Holdings Inc. an operational focus on the United sitions) for 25 open dispensaries time when cyber rivals traded at ing: repairs to the crusher, equip- ACRG.U-CSE, US$20.43 (US$20.50*) States,” they say. across 12 states – including nine of about nine times fiscal 2019, the ment availability (mechanical and The macroeconomic picture for Mr. Stanley and Ms. Xu kicked which are The Botanist-branded. analysts said that the deal fit Black- contractor), and weather-related U.S. cannabis operators “has nev- things off with a “buy” recom- We view these openings positively Berry’s strategic goal of securing power interruptions to the bore- er been stronger” for businesses mendation and a US$40 target as they reflect the continued build- any end point. fields,” say the analysts. like Acreage Holdings, said Beacon share price. out of the retail network, which we Mr. Coupland and Ms. Dyck “All controllable factors have Securities analysts Russell Stanley In an April 2, 2019 research expect to translate into strong rev- added that the deal was expected now been rectified and manage- and Susan Xu in a Nov. 20, 2018 re- note, Mr. Stanley and Ms. Xu say enue and earnings improvement.” to be earnings per share (EPS) ac- ment maintains its goal of deliver- search note that initiated coverage that Acreage’s buildout is building The analysts stick with their cretive later in fiscal 2020. They up- ing and achieving maximum cash of the company. speed - and they refer to its new “buy” recommendation and graded their stock recommenda- generation during 2019. They added that the company openings in March as evidence. US$40 target share price. tion to “outperform” and issued a “Superior managed to mitigate was on track to exit 2018 with in- “Acreage announced that two * Price three months ago US$14 target share price then. In a followup research note on March 29, 2019, Mr. Coupland and Ms. Dyck say that BlackBerry re- ANNUAL FOLLOWUP ported better-than-expected re- sults for the fourth quarter of its 2019 fiscal year (period ended Feb. 28). They add, moreover, that the What was said 12 months ago company’s guidance for fiscal 2020 matches expectations. BlackBerry’s revenue for the Updated recommendations from our May 11, 2018 edition quarter was US$99 million while its adjusted sales were US$257 mil- VersaPay Corp. “Meanwhile total ARC ARR hit places the existing senior debt fa- boosting operational improvement lion, compared to the analysts’ es- VPY-TSX/VEN, $1.45 ($2.19*) $3.3 million (up 86 per cent year- cility priced at prime rate plus 7.5 in 2018 with the integration of re- timate of US$232 million and the When PI Financial analyst over-year and 30 per cent quarter- per cent. Management noted the cent acquisitions. Street’s estimate of US$51 million. David Kwan covered VersaPay in over-quarter) while total ARR was 525-basis point reduction in bor- Mr. Pow reiterated his “buy” Its adjusted EPS was US$0.11, an April 13, 2018 report, he said that $5.3 million (up 55 per cent year- rowing costs would result in over recommendation and boosted his compared to the analysts’ predic- the company’s revenue growth over-year and 19 per cent quarter- $5 million in interest cost savings 12-month target share price to tion of US$0.08. continued to accelerate. over-quarter. annually on a fully drawn facility. $29.50 from $29. “The outlook for fiscal 2020 Its total revenue grew 126 per “The ARR backlog jumped 46 Presently, that facility is $30 mil- In a March 27, 2019 research called for 23 per cent to 27 per cent cent year-over year and 36 per cent per cent quarter-over-quarter to a lion, so we estimate it will add $2.4 note, Mr. Pow and Nick Corcoran revenue growth, or about $1.15 bil- quarter-over-quarter to $1.1 mil- record $1.8 million, which when million in savings in fiscal 2020. cover Park Lawn’s results for the fi- lion in revenue at the mid-point,” lion in its fourth fiscal quarter of combined with the aforemen- “Management is very prudent nal quarter of 2018. On the whole, say the analysts. “The outlook for 2017. The tally exceeded Mr. tioned strong revenue metrics, in- when providing loans, so we the company’s performance was in Enterprise Solutions, Licensing Kwan’s earlier estimate of dicates that growth is poised to re- would not expect an overnight in- line with their projections. and Cylance met our expectations. $900,000 and the consensus esti- accelerate going forward.” crease in receivables and therefore “Total revenue was $50.6 mil- QNX operating system growth mate of $1 million. The company’s adjusted EBIT- debt, as evidenced by the fact the lion versus $25.9 million for 2017’s should be approximately 16 per Revenue from VersaPay ARC, a DA was in line with projections, legacy facility was only three-quar- fourth quarter, up 95.2 per cent cent, slightly lower than our prior cloud-based accounts receivable adjusting for about $1.2 million ters drawn.” year-over-year. Management esti- forecast of 20 per cent.” automation platform, remained worth of one-time expenses, say Mr. Gibson says that PI Finan- mates fourth-quarter 2018 revenue Mr. Coupland and Ms. Dyck re- solid, climbing 72 per cent year- the analysts. cial had been expecting the com- from comparable business units iterate their “outperformer” rec- over-year and 24 per cent quarter- They reiterate their “buy” rec- pany to make an announcement was up 10.8 per cent year-over- ommendation but lower their tar- over-quarter. ommendation, $2.30 target share about a new bank line for quite a year. Year-over-year changes were get share price by a loonie to $13. The analyst, who said he re- price and “speculative” risk rating. while. The development, he adds, driven by an increase in pre-need mained bullish on the stock and is of the game-changer variety sales, revenue associated with var- Superior Gold Inc. expected revenue growth to con- Axis Auto Finance Inc. since interest costs will decrease ious aspects of the cemetery busi- SGI-TSX/VEN, $0.79 ($0.87*) tinue to accelerate, reiterated his AXIS-TSX/VEN, $0.48 ($0.70*) and the extra leverage will permit ness and higher revenue from low- PI Financial analyst Philip Ker’s “buy” recommendation, $3.50 tar- Axis Auto Finance’s move to ac- receivables to ramp up. er contributions to trust funds. Nov. 28, 2018 research note focus- get share price and “speculative” quire Trend Financial Corp. for “Fiscal 2020, (period ending “Management noted that there ing on Superior Gold, marked the risk rating. $29.3 million was the topic up for June 2020) should be a year of dra- was a large bulk cemetery property resumption of coverage. In an April 4, 2019 research discussion in an April 3, 2018 re- matic growth,” says the analyst. sale in Lafayette, N.Y. which con- Assigning a “buy” recommen- note, Mr. Kwan and Neehal Upad- search note by PI Financial analyst “With all the new hires, the bank tributed approximately five per dation and a target share price of hyaya say VersaPay reported strong Bob Gibson. line was the last remaining piece.” cent of the quarterly growth.” $1.95, the analyst said he expected results for the fourth quarter 2018, According to the analyst, the The analyst reiterates his “buy” The company’s adjusted earn- to see a growing production profile which suggests that growth is on deal equated to 1.9 times the price recommendation and “above aver- ings before interest, taxes depreci- (110,000 more ounces of gold in the verge of re-accelerating. to book ratio. Trend’s owners re- age” risk rating. He also boosts his ation and amortization (EBITDA) 2019) as SGI targeted higher-grade The company’s revenues were ceived $20.9 million in cash, $5.4 target share price by a dime to for the quarter was $11.3 million ore zones and as management up 37 per cent year-over-year and million in equity and $3 million in $1.35 per share. compared to $5.6 million a year aimed to fill its mill with the best 28 per cent quarter-over-quarter to convertible debentures. ago, and its adjusted earnings per available grade of ore. $1.5 million, which was north of Mr. Gibson increased his target Park Lawn Corp. share (EPS) was $0.21 compared to He added, however, that suc- the analysts’ projection and the share price to $1.70 from $1.40, PLC-TSX, $25.53 ($24.69*) $0.183 for the year-ago period. cessful growth hinged on some cat- consensus estimate of $1.3 million and reiterated his “buy” recom- While Park Lawn’s results for “The fourth-quarter 2018 re- alysts. These include positive oper- “In addition to record revenue, mendation. the last quarter of 2017 were mixed sults were in line with expecta- ations and sustained cash flow; VersaPay achieved its strongest Fast-forwarding about a year compared to consensus estimates, tions,” say Messrs. Pow and Corco- and positive exploration support- single sales quarter with approxi- later, Mr. Gibson says in a March Acumen Capital analyst Brian Pow ran. “We maintain our ‘buy’ rating ing mine-life longevity. mately $1.5 million in new ARC an- 26, 2019 research note that Axis re- said the long-term outlook for the and with a revised target price of Meanwhile, Superior’s results nual recurring revenue (ARR), driv- cently announced the closing of its owner and operator of cemeteries, $29 (from $28). Risks to our outlook for the fourth quarter of 2018 lined en by strong contribution from the new $100 million senior secured crematoriums and funeral homes include the timing of at-need ser- up with projections, say Mr. Ker electronic channel, particularly revolving debt facility. remained positive. vices and the ability to drive accre- and Akin Akinwale in a March 13, Royal Bank of Canada,” say Messrs. “The credit facility has a four- He added that Park Lawn was tion from recent acquisitions.” 2019 research note. Kwan and Upadhyaya. year term,” says the analyst.”It re- capable of driving margins up and * Price one year ago Issue 9 / 19 INVESTOR’S DIGEST May 10, 2019 / 185 VIEWS OF LEADING CANADIAN ANALYSTS

Every issue of Investor’s Digest contains upwards and three dispensaries in Mas- “A key topic of this year’s in- Trulieve sachusetts. During the month pri- vestor day was the increased atten- of 50 digested research reports from Canada’s or, TRUL acquired 80 per cent of tion of the U.S. strategy, with guid- Cannabis Leef Industries for $4 million. Ac- ance of $50 million-$100 million top analysts. The reports listed below can be cording to Mr. Stanley, this added per annum of capital deployment found on pages 184 to 193. BEACON SECURITIES an operating adult-use dispensary (versus $25 million-$50 million Growing faster than most license in Palm Springs, Calif. previously). While we believe the COMPANIES Regarding the number of dis- U.S. strategy remains a ‘show me’ had anticipated pensaries opened, the analyst component of the story, the guid- IN THIS ISSUE states, “We previously assumed ing vision appears to be centered Digested from a April 11 report that Trulieve would exit 2019 with on replicating some version of the by analyst Russell Stanley 35 dispensaries operating, and Hardisty business model at the 3M Lightspeed POS Credit Suisse ...... Outperform CIBC World Markets . . .Outperform 2020 with 40 dispensaries open. Wink hub.” Mr. Stanley says Trulieve We have increased those assump- Gibson Energy is a Calgary- Acreage Holdings MediPharm Labs Cannabis Corp. (TRUL-CSE, $19.30) tions to 36 and 45, respectively. We based midstream oilfield service Beacon Securities ...... Buy Mackie Research ...... Buy is growing quicker than he (and believe there is more upside to company in the oil and gas industry. Akumin Mosaic TRUL’s management guidance) had these estimates, given that the PI Financial ...... Buy CIBC World Markets ...... Neutral anticipated. In fact, the Florida- company’s license now allows it to Ascendant Resources NEO Lithium based marijuana company reported open up to 49 dispensaries.” Roots Beacon Securities ...... Buy Beacon Securities ...... Buy better-than-expected fourth-quar- Trulieve Cannabis is the first AutoCanada Neo Performance Materials ter 2018 revenue and earnings, lead- and largest fully-licensed cannabis CIBC WORLD MARKETS AltaCorp Capital ...... Neutral Raymond James ing Mr. Stanley to boost his esti- company in the State of Florida. Stable quarter but ques- Axis Auto Finance Financial ...... Outperform mates for 2020 (but leaving 2019 es- PI Financial ...... Buy Nike timates unchanged). tions remain Barrick Gold Goldman Sachs ...... Neutral The bump in his earnings fore- Gibson Energy Deutsche Bank ...... Buy Onex cast results in the analyst’s target Digested from an April 3 by BlackBerry Odlum Brown ...... Buy price rising to $32 per share from RAYMOND JAMES analyst Matt Bank CIBC World Markets . . .Outperform Park Lawn $28. The company also has plans to FINANCIAL Brookfield Asset Management Acumen Capital ...... Buy open up more dispensaries in Flori- Storyline playing out as Roots Corp. (ROOT-TSX, $4.20) da than he had previously forecast. returned to comparable sales Preference Shares Series 26 PFB Purpose Investments ...... Buy Florida is the third-most popu- expected growth, but the broader backdrop Acumen Capital ...... Buy lated state in the U.S. where man- makes it difficult to get overly ex- BRP Roots Desjardins Capital Markets . . . .Buy agement estimates to have 60-to- Digested from an April 3 report cited. Analyst Matt Banks says the CIBC World Markets ...... Neutral by analyst Chris Cox Calian Group 70 per cent market share . company still has work to do after Roxgold Acumen Capital ...... Buy Furthermore, Trulieve is ex- a malaise in brand resonance, and Raymond James panding into California and Mas- Investor day for Gibson Energy needs to demonstrate its ability to Centric Health Financial ...... Outperform sachusetts via acquisitions, thus in- Inc. (GEI-TSX, $23.43) showed that release relevant, seasonally-robust Beacon Securities ...... Buy SNC-Lavalin Group creasing its geographic and market the company’s underlying story is product through a full year, all Cogeco Communications AltaCorp Capital ...... Outperform range. So Mr. Stanley leaves his still playing out as expected. while navigating a macro environ- CIBC World Markets . . .Outperform Stornoway Diamond “buy” recommendation as it is. Mr. Cox says that Raymond ment at risk of turning. He remains Conifex Timber BMO Capital “Driven by an increase in our James’ thesis on the company, at the low end of guidance ranges, CIBC World Markets ...... Neutral Markets ...... Underperform fiscal 2020 earnings before interest, which operates a diverse portfolio although his share price target Corus Entertainment Superior Gold taxes, depreciation and amortiza- of assets in many North American moves to $5 (from $4.50 formerly), BMO Capital PI Financial ...... Buy tion (EBITDA) estimate from basins, is still more or less the and his rating stays “neutral”. Markets ...... Market perform Terra Firma Capital US$124 million to US$142 million, same post-investor day. He adds The financial results are as fol- Cresco Labs Acumen Capital ...... Buy in turn driven by upward revisions that he left feeling confident in the lows, “Comparable sales growth of PI Financial ...... Buy to our revenue drivers, the compa- company’s financial strength and three per cent with positive gross Tesla Delta 9 Cannabis ny reported better-than-expected its ability to deliver strong per margin percentages is a welcome, Goldman Sachs ...... Sell Mackie Research ...... Buy fourth-quarter revenue/EBITDA, share growth. stable fourth quarter for Roots in a Dow Theratechnologies and reiterated its 2019 guidance for “In particular, the U.S. strategy tough market, though staying pos- Credit Suisse ...... Outperform Mackie Research ...... Hold revenue of US$214 million and ad- really seems to be gaining promi- itive will be a quarterly challenge. Encana TransCanada Corp. Preferred justed EBITDA of US$92 million. nence; while this remains some- Store traffic was negative in the AltaCorp Capital ...... Outperform Shares Series 9 “However, we stress that man- what of a ‘show me’ aspect to the fourth quarter and has stayed so in Purpose Investments ...... Buy Fortress Global Enterprises agement’s current guidance does story, the potential upside if Gib- the first quarter of 2019, with no in- Raymond James Trulieve Cannabis not reflect the additional 14 dis- son can replicate its terminal suc- dications of this trend improving. Financial ...... Outperform Beacon Securities ...... Buy pensaries TRUL can open under a cess south of the border could be a We are optimistic that price/mix, Gibson Energy VersaPay recently announced settlement, compelling source of upside for conversion, and online growth can Raymond James PI Financial ...... Buy nor the recent legalization of the shares longer-term,” says Mr. overcome negative retail traffic, Financial ...... Outperform Village Farms International smokable cannabis products, Cox, who sticks with his “outper- but consistent product and brand Goodfood Market Beacon Securities ...... Buy which should significantly increase form” recommendation but execution is somewhat unproven. Acumen Capital ...... Buy Wajax the addressable market and sup- boosts his 12-month target share We are forecasting 3.6 per cent HEXO Raymond James port an upward revision to our rev- price to $25 from $23. 2019 comparable sales growth (af- AltaCorp Capital ...... Outperform Financial ...... Market perform enue/dispensary assumptions,” “Offsetting our fundamental ter a 1.3 per cent decline in 2018). the analyst states. enthusiasm for the story, we be- “Roots closed more stores in Jaguar Mining Walt Disney PI Financial ...... Buy Goldman Sachs ...... Buy As an investment thesis, Mr. lieve near-term upside could be Canada than it opened in 2018. Stanley claims U.S. operators trade capped with the stock outperform- While it is positive that the compa- Wingstop Largo Resources at significant discounts to Canadi- ing peers by 5.4 per cent year-to- ny is willing to close underper- CIBC World Markets . . .Outperform BMO Capital Markets . .Outperform an peers, despite improving feder- date, despite the significant con- forming stores, square footage al environment down south. He traction in heavy oil differentials.” growth will be less of a boost to adds that the first half of 2019 The analyst says that Gibson sales, and the optimal store count FREE service for Digest subscribers only! should be catalyst rich, with the le- announced a deal to divest its in Canada remains a question. Investor’s Digest E-mail Hotline galization of smokable products Canadian truck transportation “Roots is guiding towards sell- likely to drive patient growth. business for $100 million during its ing, general and administrative The exclusive Investor’s Digest E-mail Hotline brings you Trulieve is now trading at 12 investor day. Now that the compa- growing slightly slower than sales late-breaking developments that affects your investments. A times his 2020 EBITDA estimate. ny’s asset sale strategy has in 2019, overcoming higher ad- $75.00 value, the e-mail hotline is FREE for subscribers. This represents a 37 per cent dis- wrapped up and with the solid sup- vertising expenses (target is four COMPLETE BELOW AND RETURN TODAY! count to the 20-time average for port of its marketing segment last per cent of sales). For the first half the broad peer group, and a 67 per year, DBRS issued a BBB (low) rat- of the year gross margins will be Name: cent discount to the 37-time aver- ing for Gibson. challenged as the company clears age for companies with over $1 bil- “In addition to an improved out seasonal inventory and shifts E-mail: lion in market capitalization. cost of capital, the new rating to its new distribution centre. For As for Trulieve’s push into Mas- should allow Gibson to lengthen the year we expect modestly bet- Postal Code: sachusetts and California, Mr. Stan- the tenor of its debt maturities to ter margins, driving 10 per cent ley reports that the TRUL acquired reflect the duration of its contracts EBITDA (earnings before interest, For fastest service call toll free: 1-800-804-8846. Or fax your order. Life Essence for $4.4 million in cash in the terminals business, as well as taxes, depreciation and amortiza- Investor’s Digest of Canada, 133 Richmond St. W., Toronto, M5H 3M8 during Dec. 2018. Life Essence has opening up the preferred market as tion) growth. Tel: 416-869-1177 Fax: 416-869-0456 state-approvals required to develop an alternative source of capital,” a cultivation/processing operation, says Mr. Cox. Continued on next page INVESTOR’S DIGEST

186 / May 10, 2019 WHAT THE BROKERS SAY ABOUT CANADIAN STOCKS Issue 9 / 19

Continued from preceding page Mr. Murray comments, “Over- 2019 and 2020 adjusted fully-dilut- consensus estimate of US$0.19. penditure continues to be related all, while we continue to see im- ed EPS revise to $1.63 and $2.01 “Roxgold’s 2018 production of to development efforts to achieve a “2018 was a volatile year where provement in Canadian operations from $1.71 and $2.04 previously. 133,000 ounces at all-in-sustain- full turnaround at Turmalina.” the company saw some slippage in driven by the ‘Go Forward’ plan “Management noted that its ing-costs (AISC) of US$740 ounce, The company wrapped up 2018 its brand momentum and product (which focuses on retailing used near-term focus will be on the topped the company’s increased with $6.3 million in cash versus assortment as it had many initia- cars over new), the cost structure of company’s Go Forward Plan and guidance of 120,000 to 130,000 $6.7 million at the previous quarter tives on the go. After the 2018 re- the U.S. business is weighing on that there are no plans for mergers ounces (up from original guidance conclusion. set, the company is back on a path our forecasts. or acquisitions until later in 2019. of 110,000 to 120,000 ounces) at “Considering the recent bridge for double-digit growth, but limit- “Although the U.S. auto envi- They cite a renewed interest in pur- AISC of US$740 to US$790 per facility completed in first quarter ed visibility on company initiatives. ronment remains uncertain (espe- chasing collision repair shops in ounce,” says the analyst, who adds of 2019, we continue to be wary of “We continue to use six times cially for new cars because many addition to traditional dealerships. that production numbers should the capital layouts at Turmalina enterprise value-to-EBITDA to customers cannot afford financing Management also expects to dis- rise this year. and gradual increase in produc- value Roots, in the range of slow- at the higher federal interest rates), pose of non-core real estate assets “While processed grade de- tion and cash flow,” says the ana- er-growth apparel peers given management sees an approximate sometime during the first half of clined in 2018, the company re- lyst. “At year-end, Jaguar had a Roots’ difficult 2018 and limited $10-million loss in 2018 in the U.S. 2019,” Mr. Murray concludes. duced per tonne costs by 12 per negative working capital position visibility on 2019. and is looking to drive that to $0 by AutoCanada operates car deal- cent. Fourth quarter 2018 produc- of $2.4 million. “Guidance has been cut and the end of 2019. ACQ is imple- erships in Canada. The company tion of 26,000 ounces was pre-re- “No annual guidance has been growth has been pushed out. menting its plan to create opera- offers new and used vehicles, spare leased and in-line with our esti- provided by Jaguar at this time. Though there are multiple drivers tional efficiencies and grow rev- parts, maintenance services, and mate. Record throughput topped Our outlook projects consolidated of potential upside, we balance enues, with a particular focus on customer financing. our expectations and offset lower gold production of 87,600 ounces these against a challenging and creating a sustainable platform than expected head grade. Fourth at cash costs of $710 per ounce and rapidly changing industry, and with U.S. assets that can weather a quarter 2018 AISC of US$836 per AISC of $1,150 per ounce for 2019. conclude that risks and reward are challenging economic climate. Roxgold ounce was just above our estimate “Our $0.40 per share target is appropriately priced in today’s val- “Material profit share is expect- of US$815 per ounce.” generated using a 0.6 times NAVPS uation. We see limited upside until ed from AutoCanada’s new offer- RAYMOND JAMES As far as the company’s finan- multiple ($1,300 per ounce gold at there is better visibility on growth ings in finance and insurance for FINANCIAL cial health is concerned, Ms. Has- five per cent on under a DCF anal- materializing.” used vehicles at its dealerships. The Company wraps 2018 on san says that Roxgold’s balance ysis of Jaguar’s operations.” Roots is a Canadian lifestyle company also recently created a sheet not only is solid, but also is Jaguar Mining is a Canadian- brand that sells direct-to-consumer new special finance division, which high note – and tune could set to get even better. The compa- listed junior gold mining, develop- through 117 stores in North Ameri- will arrange loans for customers be even better this year ny, in fact, concluded last year with ment, and exploration company ca and through 139 partner-oper- who cannot qualify for traditional US$59.8 million in balance sheet operating in Brazil. ated stores in Asia. loans offered by banks and affili- Digested from a March 27 report cash and US$24.2 million in long- ates of vehicle manufacturers. It in- by analyst Tara Hassan term debt, which is down 13 per cludes a new wholesale division, cent quarter-over-quarter. NEO Lithium AutoCanada with which ACQ expects to capital- Roxgold Inc. (ROXG-TSX, $0.90) “Subsequent to quarter end, ize on arbitrage opportunities in wrapped up 2018 on a high note, Roxgold announced it completed BEACON SECURITIES ALTACORP CAPITAL the sale of used vehicles between according to Ms. Hassan. the purchase of 4.9 million shares Company’s wholly-owned U.S. auto sector weighing different geographies.” In fact, the analyst says Ray- for cancelation under its previous- Overall, AutoCanada’s fourth- mond James updated its model to ly announced NCIB program,” says brine project in Argentina down expectations quarter 2018 results were mixed reflect the junior gold producer’s the analyst. “We expect Roxgold to on right track compared to analyst estimates, performance in 2018, which was in continue to improve its balance Digested from a March 18 report showing consolidated revenue, ad- line with their projections. sheet during 2019 as free cash flow Digested from an April 1 report by analyst Chris Murray justed earnings before interest, tax, “With Roxgold forecasting in- increases over 2018.” by analyst Ahmad Shaath depreciation and amortization creased production in 2019 with Ms. Hassan reiterates her “out- The performance of the U.S. (EBITDA) and adjusted fully-dilut- the completion of Bagassi South, perform” recommendation and NEO Lithium Corp. (NLC- auto sector is weighing down on ed earnings per share (EPS) of we expect free cash flow to in- $2.15 target share price. TSX/VEN, $0.86) is advancing what market expectations for Auto- $782.8 million (up 6.8 per cent crease materially,” she says. “We Roxgold is a Canadian-based promises to be the next major Canada Inc. (ACQ-TSX, $11.74) year-over-year), $22.6 million and reiterate our view that Roxgold’s gold mining company with assets brine project. forcing management to reduce its -$0.34, as compared to analyst ex- current valuation does not accu- located in West Africa. Mr. Shaath says that Beacon re- earnings expectations, Mr. Murray pectations for $776.1 million, $25.1 rately reflect its superior free cash cently attended a two-day visit to claims. While the company may million and $0.40, respectively. flow profile relative to its junior see the site of the company’s 3Q achieve its goals in Canada, a less ACQ also declared a quarterly divi- producing peers.” Jaguar Mining project in Catamarca, Argentina. favourable cost structure in the dend of $0.10 per common share The company, whose flagship “We visited NLC’s newly com- U.S. business is proving to be a payable on March 15. holding is its 90 per cent-owned PI FINANCIAL menced pilot plant in Fiambalá, drag on operations, according to “Our 2019 and 2020 adjusted Yaramoko project in Burkina Faso, Company announces which is currently testing the entire management. EBITDA estimates revise to $100.2 reported adjusted earnings per flowsheet from a four per cent brine The analyst keeps his “neutral” million and $111.6 million as com- share (EPS) last year of US$0.10 results for fourth quarter feed concentrated at 3Q’s pilot recommendation as is. But buoyed pared to $103.3 million and $110.9 versus the analyst’s estimate of of 2018 ponds,” says the analyst. “The plant by management’s recent initiatives million, previously (after manage- US$0.09. Its adjusted cash flow per will be producing lithium carbon- to control growth and grow rev- ment hedged its own $100-million share (CFPS) was US$0.24. This Digested from a March 28 report ate samples from the 3Q deposit in enues, he bumps his target price or greater EBITDA forecasts). Cor- was in line with Ms. Hassan’s esti- by analyst Philip Ker approximately two months’ time. up by 50 cents to $18 per share, respondingly, our estimates for mate of US$0.24 and north of the “We view this as a critical turn- Jaguar Mining Inc. (JAG-TSX, ing point for the project as it will $0.15) reported a production miss firstly give the company samples for the final quarter of last year on to prove the project’s credentials Keith Richards speaks about the heels of a pre-release saying as a viable source of battery-grade pretty much the same thing. lithium carbonate on its efforts to Technical Analysis and the Current Market Outlook Mr. Ker, who reiterates his secure strategic partners. This in “buy” recommendation and his turn will increase confidence in $0.40 12-month target share price, management’s technical creden- says PI Financial continues to wait tials, and help the team further en- Speaking Engagements with Keith Richards, CMT, CIM, FCSI, Portfolio Manager and Technical for things to get better at the com- hance their understanding of the Analyst: ValueTrend Wealth Management, Worldsource Securities Inc., member Canadian Investor pany’s Turmalina operations. process flow sheet.” Protection Fund and sponsoring investment dealer of Keith Richards. The company announced a net The analyst says that Beacon loss of -$15.1 million, or -$0.05 per was duly impressed with what the share, for the final quarter of 2018 technical team has achieved as far compared to the analyst’s estimate as the development level at the 3Q of a net loss of $600,000, or $0.00 Salar as well as how knowledgeable BNN “MarketCall Tonight” Appearances with Keith Richards per share. they were about the reserves and Phone in with your questions on technical analysis for Keith during the show. “Consolidated cash costs of the resources. $795 per ounce for the fourth quar- “The company’s work includes CALL TOLL-FREE: 1-855-326-6266. Or email your questions ahead of time ter of 2018 were pre-released while analysis of optimal well locations, (specify they are for Keith) to: [email protected] annual cash costs of $732 per ounce sizes, production rates and the var- were a 12.5 per cent improvement ious evaporation conditions (rain, year-over-year,” says Mr. Ker. “This snow, wind, solar radiation) across Next show: was led by Pilar where cash costs different seasons,” says Mr. Shaath. April 30, 2019 @ 6:00pm declined 34 per cent year-over-year “We believe NLC’s technical team, June 14, 2019 @ 6:00pm to $702 per ounce. led by CEO Mr. Waldo Perez, has July 16, 2019 @ 6:00pm “Reported AISC (all-in sustain- the right technical expertise to ing costs) for the fourth quarter of progress the 3Q project and realize 2018 and fiscal 2018 not previously its economic value. The next cata- reported were: $1,279 per ounce, lyst from this front should be re- Keith Richards, Portfolio Manager, can be contacted at [email protected]. He may hold positions in the securities mentioned. Worldsource Securities Inc. - Member: Canadian Investor Protection Fund, and sponsoring investment dealer of Keith Richards. The opinions and $1,244 per ounce compared to sults from the recently-completed expressed are solely those of Keith Richards and may not necessarily reflect that of Worldsource Securities, its employees or affiliates. The our estimate of $1,118 per ounce 20-day pump test.” contents are for information purposes only and do not represent investment advice. and $1,193 per ounce, respectively. NEO recognizes that communi- Increased sustaining capital ex- ty engagement is important, says INVESTOR’S DIGEST

Issue 9 / 19 WHAT THE BROKERS SAY ABOUT CANADIAN STOCKS May 10, 2019 / 187 the analyst, who adds the compa- lows the company to utilize that stores in Manitoba. On Oct. 17, ny is taking care of the locals. Dur- working capital for investments in 2018 the company opened up its ing the pilot plant tour, a govern- adding new subscribers. first retail store. During the first ment official discussed the impor- “In the second quarter of fiscal week following legalization, Delta 9 ‘Best Buys’ from tance of the project to the province 2019 the company used $400,000 reported almost 9,600 transactions as well as to future employment from cash flow from operations. and $736,124 in revenue at this re- options in nearby towns. For the last four quarters the com- tail location. The analyst sticks with his pany has generated about $4.2 mil- On March 21, the company an- leading analysts “buy” recommendation and $2.20 lion in cash flow from operations. nounced the opening of a second target share price. Given the anticipated weakness in retail location in the Osborne Vil- NEO Lithium has become a the fourth quarter of fiscal 2019 we lage area of Winnipeg; a densely Analysts follow as many as 20 stocks, most of which are rated prominent new name in lithium forecast slightly negative operating populated area that sees significant “buys”. Of those buys, an analyst has one or two special favourites brine exploration by virtue of its 3Q cash flows for the fiscal year. daily foot traffic and over 50,000 ve- seen as most suitable for new buying. This column is devoted to those project and experienced team. “We anticipate moderate hicles per day. one or two favourite “best buys”. growth of subscribers and net rev- Additionally, on April 2, the enue in third quarter of fiscal 2019. company announced the grand ontrary to their name and unlike other parts of the market, Goodfood For the fourth quarter we antici- opening of its 4,500 square-foot which have raced to new highs since correcting last year, pate subscribers will remain rela- Delta 9 Cannabis Superstore in Canadian preferred shares remain unjustly neglected, ar- Market tively flat while net revenues will Brandon. Through the balance of gues portfolio manager Sandy Liang. “It’s kind of perverse. drop slightly given the lower order 2019 the company will be open CSome of the highest-quality shares from the highest-quality issuers ACUMEN CAPITAL rate in the summer time. one additional retail store in were hit the hardest,” he says, citing Royal Bank of Canada and Opportunity abounds in “Goodfood offers investors an Thompson. Once these stores are Toronto-Dominion Bank as examples. opportunity at a relatively attrac- fully operational, the analysts be- Mr. Liang is head of fixed income at Purpose Investments, as well early-stage growth tive valuation.” lieve that they will generate rev- as a portfolio manager and a chartered financial analyst (CFA). business Goodfood Market is the leading enue of approximately $30 million Starting out in the financial industry in 1991, he has specialized in home meal solutions company in or more per year. fixed-income investments since the mid-’90s. Digested from an April 4 report by Canada. The company delivers in- Furthermore, management be- To illustrate the scale of the decline since September, Mr. Liang analyst Jim Byrne gredients to its subscribers weekly to lieves that international expansion notes that the S&P/TSX Preferred Share Index, which he stresses is prepare meals at home. The Com- is fundamental to its long-term based on share prices rather than returns, was steady throughout Goodfood Market Corp.’s pany has its main production and growth and in March 2018, the 2018, ranging between 700 and 720 points. As of September 2018’s (FOOD-TSX, $3.72) strategy has head offices in Montreal with a sec- company signed a letter of intent end, it stood at about 710 points. “When the market volatility been to invest in incentives and ond production facility in Calgary. with German pharmacy compa- hit…the index went straight down for the fourth quarter,” says the marketing It began operations in 2014 in Que- nies CanPharma GMBH and Glob- portfolio manager. “Right now it’s sitting at about 630,” which has in order to drive subscriber bec as Culiniste and began trading al Group Kalapa S.L. for the export not been the case since mid-2016, he told Investor’s Digest in an growth at the expense of profitabil- on the TSX in June 2017. of medical cannabis. April 22 interview. “This year-to-date, it hasn’t done much.” ity in the near term. The compa- Established in 2012, Delta 9 A Purpose report prepared by Mr. Liang and fellow analyst Jere- ny’s subscriber count at the end of Cannabis is one of Canada’s only my Lin notes, “As a result of the sell-off in...an investor can gener- the second quarter of fiscal 2019 Delta 9 vertically integrated cannabis com- ate a pre-tax equivalent income stream of six per cent to eight per were 159,000, up from 126,000 panies with licensed production, cent from the most credit-worthy corporations in Canada.” at the end of first quarter of fis- Cannabis processing, distribution and retail Blue chips such as Manulife Financial Corp. and the major cal 2019. In addition, Mr. Byrne operations. Canadian banks were “hit pretty disproportionately” in the sell-off, maintains that investments in au- MACKIE RESEARCH Mr. Liang says. The portfolio manager attributes the beating they tomation this year will pay off over Grow Pod technology offers have taken to the influence of passive, index-based ETFs. Given the time with higher margins and low- Conifex Timber highest-quality companies (based on market capitalization) have er labour costs in the future. The low costs to pot growers the highest weighting on the preferred share index, when it began analyst continues to give the stock CIBC WORLD MARKETS to drop, passive fund managers indiscriminately sold those shares a “buy” recommendation and Digested from a April 4 report Dawn of an all-American to match the index, leading to a vicious cycle, he argues. “The whole $4.80 target share price. by analysts Greg McLeish market is about $80 billion, which is not that big,” the analyst notes. With regards to financial report- and Nicola McFadden lumber producer On a long-term basis, he says the outlook for preferred shares is ing, the analysts say, “Reported net healthy because of the high likelihood of interest rates rising. Cen- revenue of $36.6 M compared with The analysts initiate coverage of Digested from a March 29 report tral banks have backed away from the quantitative easing that drove our estimate of $37.9 million and Delta 9 Cannabis Inc. (NINE- by analysts Hamir Patel up bond prices before the shift to a bond bear market in mid-2016. consensus of $38.3 million. Rev- TSX/VEN, $1.56) with a “buy” rec- and Roshni Luthra While many still adhere to negative interest rate policies, again to enue growth was very strong, up ommendation and $4 per-share drive up bonds, those rates are unsustainable in the long run and approximately 133 per cent year- target price, saying its growing The analysts question whether make bond prices unrealistic, he asserts. “The fixed-income bubble over-year and approximately 24 per methods provides low-cost stable or not Conifex Timber Inc. (CFF- has gotten out of hand.” Even if interest rates do not improve in the cent quarter-over-quarter. production. TSX, $1.55) will source all its lum- short term, preferred shares will continue to pay out coupons (pe- “Gross profit margins in the Delta 9’s proprietary production ber south of the border. They say riodic interest payments on the principal investment) like clock- second quarter of fiscal 2019 were methodology involves the use of a its earnings from its legacy Canadi- work, says Mr. Liang. “The instances where high-quality companies 20.9 per cent, slightly below our es- modular, scalable, and stackable an operations will be challenged in miss interest payments are almost non-existent. There are no bet- timate of 23 per cent and analysts’ production unit called a Grow Pod. the near term, adding that its prof- ter companies in this country than the ones that issue prefs.” consensus of 23.2 per cent. Adjust- Grow Pod technology is a propri- itability is going to be constrained Buying preferred shares is also more appealing than buying ed gross margins, adding back etary system developed with scala- throughout 2019 as its U.S. mills bonds because most preferred shares are “rate-reset”, meaning the credits, and incentives, were 37.8 bility and cost efficiency in mind. are still in the midst of ramping up. rate paid out on coupons changes periodically in line with Canadi- per cent, in-line with our estimate The systems are modular for ease of Shipments of Conifex-pro- an government bond yields. Thus, their investors can benefit from of 37.9 per cent. assembly, and stackable up to three duced products from the U.S. grew higher rates and inflation, Mr. Liang explains. “Goodfood reported an adjust- units high, allowing for more effi- 25 per cent, thus offsetting an 11 The analyst names the Brookfield Asset Management Inc. Pref- ed EBITDA loss of $5.5 million, cient use of available floor space. In per cent reduction in shipments erence Shares Series 26 (BAM.PR.T-TSX, $16.58) and TransCana- compared with our estimate for a some cases, Grow Pods can more from mills in British Columbia. da Corp. Preferred Shares Series 9 (TRP.PR.E-TSX, $16.82) as his loss of $4.5 million. EBITDA mar- than double production capacity. Plus, with lumber markets overall “best buy” recommendations. gins were impacted by some The company currently oper- remaining challenged, Mr. Patel “It’s one of our top picks among the issuers,” he says of Brook- weather impacts in the quarter that ates an 85,000 square-foot produc- and Ms. Luthra maintain their field. “Brookfield is bar-none one of the strongest credit profiles in increased costs. tion facility in Winnipeg, Manitoba “neutral” recommendation on Canada.” The Series 26 shares’ par value is $25 each and it has an “Management indicated that that is capable of producing more Conifex. They also reduce their internal rate of return of 6.0 per cent, translating to a taxable equiv- automation in their Montreal facil- than 4,000 kilograms of cannabis price target to $1.75 per share from alent of 7.8 per cent. “This is a preferred share that trades at a deep ity has reached 50 per cent. The ex- per year. Through the balance of $2 due to their significantly lower discount to par,” says the analyst. pansion in Montreal is ahead of 2019 the company plans to add earnings forecast for 2019 along- At present, the company has only about $10 billion in preferred schedule and under budget with more than more than 450 grow side a bleak downside scenario. shares and debt on a market capitalization of more than $60 billion. completion expected before the pods and this will increase annual Earnings from its legacy Cana- “There’s a lot of value cushion in these preferreds but on top of that, end of the third quarter of fiscal production capacity to over 16,000 dian operations will be challenged Brookfield has been creating shareholder value for decades,” Mr. 2019 (May). Capital expenditures kilograms per year. by elevated log costs and weak Liang says. In addition to direct asset management (namely real es- were $2.8 million in the second Each pod costs $25,000 to Western Spruce-Pine-Fir prices, tate, renewable power, infrastructure, and private equity), Brook- quarter. The company will expand retrofit and is capable of producing the analysts state. The latter is cur- field owns asset managers and makes fees from them, incurring rel- their Calgary facility to increase over 32 kilograms dried cannabis rently US$350 per thousand board atively little cost to themselves. sales capacity to $200 million, up per year. First cultivation is expect- feet (mfbm) or only US$290 per TransCanada’s Series 9 shares offer an internal rate of return of from current levels of $100 million. ed by management in the third mfbm after 20 per cent tariffs. 6.1 per cent, translating to a taxable equivalent of 7.9 per cent. Automation investments have be- quarter of 2019 and full-opera- “With fiber scarcity leading to “The pipeline business is actually very favourable right now be- gun in Calgary. tional capacity is projected for the unsustainable operating losses for cause the return on pipeline investments is very strong,” says Mr. “One of the most attractive as- first quarter of 2020. The total cost many smaller operators in British Liang. Low oil prices in Canada have forced producers to pump it pects of Goodfood’s business mod- of Phase 2 is approximately $25.5 Columbia, we suspect Conifex’s to other markets, raising pipeline demand. el is the built-in negative working million and will likely be complete Annual Allowable Cut (is the annu- TransCanada’s market capitalization is also around $60 billion. capital. Subscribers pay the com- by the end of 2019. al amount of timber that can be Mr. Liang admits that it has slightly more debt than Brookfield, but pany up front for a delivery that ar- As for its retail history, it is quite harvested on a sustainable basis adds that most of its business is regulated and under long-term con- rives a few days later. The compa- short. Delta 9 was also one of four within a defined forest area) in the tracts, so earnings are not volatile. ny does not pay their suppliers for legal producers to be awarded li- about 10 days to 90 days, which al- censes to operate retail cannabis Continued on next page 188 / May 10, 2019 WHAT THE BROKERS SAY ABOUT CANADIAN STOCKS Issue 9 / 19

Continued from preceding page my and global auto sector, but also He adds that HEXO has devel- experienced declining rare earth oped award-winning products and province would have greater value prices and lagging pass-through continues to focus on developing to larger producers in the compa- pricing agreements.” innovative products in anticipation Briefly Noted ny’s operating regions with lower Neo Performance Materials is a of the cannabis derivative market manufacturing costs. Extracting leading global manufacturer of that management expects to come value from its legacy Canadian op- functional materials derived from online later this year. The company ACUMEN CAPITAL erations would allow the company rare earth elements. has also invested in their 579,000 to accelerate high-return capital square foot Belleville, Quebec facil- projects across its three-mill plat- ity which will provide the company While Terra Firma Capital Corp. (TII-TSX/VEN, $0.55) still faces form in the U.S. South,” Mr. Patel HEXO and their future Fortune 500 part- headwinds, the long-term outlook for the real estate financier re- and Ms. Luthra say. ners with a fully licensed, state-of- mains positive to analysts Nick Corcoran and Brian Pow. Those Conifex Timber is a North Amer- ALTACORP CAPITAL the-art facility to conduct product headwinds were ever-present in its fourth-quarter 2018 results, ican lumber producer with five Cannabis revolution in- research and development. which showed capital deployment of only $7 million – much softer sawmills. The company also pro- HEXO also has strong retail than the $34 million they expected. They have revised their gross cap- duces renewable power. cludes branding, bever- distribution across Canada, and ital deployment estimate for 2019 downward to $60 million. ages and more has secured the single largest for- Even though one of their few positive takeaways from the quarter ward-supply contract among the was greater-than-expected foreign exchange gains from U.S. opera- Neo Digested from a April 4 report Canadian licensed producers with tions, the analysts say Terra Firma continues to build long-term by analyst David Kideckel Quebec’s Société québécoise du shareholder value by growing its book value. They note the compa- Performance cannabis (SQDC). Add in the re- ny also repurchased about three million shares in the quarter (about Mr. Kideckel adds HEXO Corp. cent acquisition of Newstrike 58 million shares are outstanding as of mid-April). Materials (HEXO-TSX, $8.76) to his coverage Brands Ltd., the company will The analysts keep their “speculative buy” recommendation for universe because he likes its focus have established distribution the company. They say the next catalyst for its share price will be the RAYMOND JAMES on strategic partnerships. This in- agreements in nine provinces. release of its first-quarter 2019 results in May. Meanwhile, they re- FINANCIAL cludes partnerships for distribu- With this acquisition, HEXO will duce their target price by a dime to $0.70 per share. Neo shares deal dead tion and specialized products such add 470,000 square feet in pro- as cannabis-infused beverages duction space when completed, Digested from a March 12 report made in collaboration with the additional public and private re- ODLUM BROWN by analyst Frederic Bastien beer giant Molson Coors Canada. tail channels, and a branding rela- Add in brick-and-mortar sales tionship with members of The Mr. Bastien asserts that the as legalization hits full swing, and Tragically Hip - one of Canada’s Onex Corp. (ONEX-TSX, $76.12) will purchase investment man- Street overreacted to the termina- he expects revenues to really blos- most revered musical acts. ager Gluskin Sheff + Associates Inc. for $445 million, or $14.25 per tion of Neo Performance Materials som by more than fifteen-fold HEXO generated $13.4 million share. Gluskin Sheff closed at $11.17 per share on March 22, shortly Inc.’s (NEO-TSX, $10.16) acquisi- year-over-year. The analyst gives in net revenue for the second quar- before the companies announced the takeover. tion agreement with Luxfer Hold- an initial recommendation of “out- ter of fiscal 2019 (period ending Gluskin manages roughly $8.2 billion, 89 per cent of which is on ings PLC, as well as its disappoint- perform” with a 12-month target Jan. 2019), which management ex- behalf of high net worth clients. The firm has struggled in recent years ing fourth-quarter 2018 results. Mr. price of $10.50 per share. pects to stay relatively flat in the – since the beginning of 2017, net outflows have totalled about Bastien plunges his target price to “The company’s trend-setting following quarter. For the fourth US$750 million. Accordingly, the acquisition hurts Onex’s revenue $15 per share from $19.25 to ac- partnership with Molson Coors is fiscal quarter, the analyst provides mix, but analyst Benjamin Sinclair lays out several reasons to sup- knowledge its poor performance of a major step in HEXO’s quest to- a substantial lift in his net-rev- port the deal. Firstly, Onex paid a reasonable price, he says. Second- late, but keeps his “outperform” wards enhanced market leader- enues forecast, growing to $29.4 ly, it will pay for Gluskin with cash on hand, so the transaction will recommendation. ship... HEXO sees opportunities million, which reflects the contri- immediately add to earnings and cash flow. Thirdly, Onex and NEO and Luxfer agreed to cancel for major additional partnerships bution from the Newstrike acquisi- Gluskin together can offer more of a one-stop-shop solution to in- the previously announced transac- across various industries (e.g. tion, coupled with a significant in- stitutional investors. Finally, there is little chance of integration hic- tion under which Luxfer would have pharmaceuticals, tobacco and crease in supply as the new 1-mil- cups because Gluskin will stay largely independent after the merger. acquired NEO for US$612 million in beverages). lion square-feet facility known as Mr. Sinclair recommends investors “buy” Onex and reiterates a cash and stock. No specific reasons “However, unlike the cannabis B9 scales up. $100 per-share target price. for the split-up were given, but since sector, these are mature industries He also anticipates some rev- the deal had received the blessing of with well-established players, and enue uplift for the Canadian both board of directors and NEO’s as a result, the barriers to entry are cannabis sector as a whole as ACUMEN CAPITAL majority shareholder, Oaktree Cap- significantly high in comparison. brick-and-mortar retailers come ital, the analyst was left to speculate By pursuing partnership opportu- online in Ontario. He estimates on why it ran into a sea of regulato- nities with leaders in these respec- that the company will generate Calian Group Ltd. (CGY-TSX, $32.76) has taken over German- ry red tape. tive industries to develop products $62.6 million in net revenue for fis- based satellite communications company, SatService GmbH as of “Overall, we acknowledge that derived from cannabis supplied by cal 2019, up from gross sales of $4.9 April 1 for 6.5 million euros (or $9.7 million) in cash, plus a potential the macro backdrop for NEO has HEXO, the company effectively million in 2018. $5-million earnout on the table. Analysts Brian Pow and Nick Cor- weakened in recent months, and penetrates multi-billion dollar HEXO creates and distributes in- coran applaud the acquisition, Calian’s first international takeover. that the stock may remain under markets, creating a top cannabi- novative, easy-to-use and easy-to- SatService annual revenues are about $10 million with a margin pressure until it rotates from arbi- noid-derived product with the understand products to serve the profile that’s stronger than Calian’s Systems Engineering Division trage funds back into the hands of ‘Powered by HEXO’ brand,” Mr. Canadian cannabis market. segment, according to Calian. SatService has grown around 15 per fundamental investors, but our job Kideckel states. cent annually with some variability from year to year, the analysts is to call out asymmetric return op- note. Its primary markets are Germany, Switzerland and Austria, with portunities when we see them,” secondary markets in the United Kingdom and France. says Mr. Bastien. The SatService business has a smaller backlog than Calian, name- The March 11 one-day 37 per ly around six months’ visibility on orders, and revenue is more vari- cent price plunge (versus the over- able. On the bright side, 80 per cent of SatService’s customers are new all TSX rising one per cent) has no- to Calian, providing opportunities for cross-selling. tably pushed NEO’s valuation to Arguing that SatService creates a platform for future growth in Eu- 3.5 times forward operating profits, ropean markets, the analysts maintain their “buy” stance and raise versus an average of 7.8 times for a their target share price for Calian to $37.50 from $36. group of advanced material and chemical firms. “That’s overly punitive (the BEACON SECURITIES stock price fall), in our view, for a firm that continuously drives prod- uct innovation, generates healthy Village Farms International Inc. (VFF-TSX, $19.36) could double and growing free cash flow, and your returns since it is doubling the capacity of its marijuana-grow- makes the electrification of the ing joint venture, analysts Doug Cooper and Susan Xu argue. They US$2 trillion auto industry possi- increase their target price to $60 per share from $32 and reiterate that ble. Accordingly we encourage pa- investors should “buy” the stock. tient, value investors to buy NEO In late March, Village Farms announced that its 50 per cent- today,” Mr. Bastien adds. owned joint venture, Pure Sunfarms, had exercised its option on the The analyst goes on to com- existing 1.1-million-square-foot Delta 2 greenhouse facility in Delta, ment about the poor fourth-quar- B.C., which Village Farms owns, doubling Pure’s footprint to 2.2 mil- ter results. “Adjusted operating lion square feet. “We believe this catapults Pure to top-3 status in profits of US$13 million for the terms of scale of all of the Canadian licensed producers in domestic quarter compared unfavourably to capacity...and could ultimately have 30 per cent to 40 per cent mar- both our target and the consensus ket share in Canada,” say Mr. Cooper and Ms. Xu. “In terms of total forecast of US$17 million. Of the production, our recent site visit confirmed that Pure is currently on negative variance to our forecast, a 50,000-kilogram to 55,000-kilogram run-rate (up to 75,000 kilo- US$3 million was attributable to grams in the third quarter of 2019) making it one of, if not the largest Magnequench (magnetic-pow- Canadian licensed producers right now,” the analysts exclaim. ders) division. The segment not only suffered more than expected from the slowing Chinese econo- INVESTOR’S DIGEST

Issue 9 / 19 WHAT THE BROKERS SAY ABOUT CANADIAN STOCKS May 10, 2019 / 189

Corus a recession) and/or fund organic that owns and operates the zinc- growth initiatives. lead-silver El Mochito Mine in Entertainment “We forecast relatively flat Honduras. EBITDA growth through fiscal BMO CAPITAL MARKETS 2020. The EPS profile reflects high- Briefly Noted Television advertising re- er (non-cash) depreciation and Barrick Gold amortization charges for television bounds in second fiscal licenses going forward as the DEUTSCHE BANK CIBC WORLD MARKETS quarter, but will it last? amortization period has been reset Favourable catalysts could from an indefinite period to be- Digested from an April 5 report tween three and twenty years.” shine on gold behemoth Following fiscal 2019 second-quarter (period ended February by analyst Tim Casey Corus Entertainment is the 2019) revenue, operating profits and subscription numbers that beat largest non-vertically integrated Digested from a April 9 report their forecasts at Cogeco Communications Inc. (CCA-TSX, $91.57), While many might think the tra- television broadcaster in Canada. by analyst Chris Terry analysts Robert Bek and Kulveer Grewal predict the cable company’s ditional television advertising plat- Corus owns a portfolio of radio sta- recent recovery momentum will continue. form is withering away, Corus En- tions across most of the country, in- Based on a more favourable Underpinned by solid subscription momentum for its phone, In- tertainment Inc. (CJR.B-TSX, cluding station clusters in Toronto, gold pricing outlook on the hori- ternet and cable television packages (particularly in Canada) – earn- $6.44) reported a second consecu- Ottawa, and several major western zon, as well as synergies from its re- ings before interest, taxes, depreciation and amortization (EBITDA) tive quarter of growth in television markets. Corus’ entertainment cent mergers, along with strategic of $280.6 million for the quarter were 3.4 per cent ahead of the ana- advertising. Furthermore, Mr. brands include kids, family, and divestments in hand, Mr. Terry up- lysts’ $271.2-million forecast, buoyed by much better-than-expect- Casey predicts this growth will women’s brands such as YTV, Tree- grades his view on Barrick Gold ed margins at its Canadian cable division (at 53.5 per cent compared continue into the third quarter of house, and W Network. Corp. (ABX-TSX, $17.29; GOLD- to the analysts’ forecast of 51.6 per cent). fiscal 2019, albeit at a more sub- NYSE, US$12.97) from “hold” to Cogeco reiterated its fiscal 2019 (period ending August 2019) year- dued rate versus the 11 per cent it “buy”, and raises his target share over-year growth guidance of six per cent to eight per cent for rev- posted in the second quarter of fis- Ascendant price from US$12.75 to US$15. He enue and eight per cent to 10 per cent for EBITDA, while increasing cal 2019. The key question Mr. adds that he has a preference for its free cash flow guidance on the back of lower capital expenses. The Casey poses for investors is Resources Barrick amongst the large-cap pre- analysts boost their target price to $98 per share from $94 and keep whether this is sustainable. As he cious equities miners. their “outperformer” recommendation. continues to be cautious and sees BEACON SECURITIES “Since our last update, Barrick longer-term growth challenges for Coverage initiated has also announced the Nevada the company, Mr. Casey gives the joint venture with Newmont Min- MACKIE RESEARCH stock a “market perform” rating Digested from an April 2 report by ing Corp. (in February). Our new and $7 target share price. analyst Jacob Willoughby gold price forecast is an improve- Mr. Casey further highlights ment to US$1,350 per ounce in the Theratechnologies Inc. (TH-TSX, $8.74) could not remedy poor structural headwinds such as cord- Mr. Willoughby initiates cover- fourth quarter of this year with an sales, leading to fiscal 2019 first-quarter (period ended February cutting/shaving, online platforms age of Ascendant Resources Inc. average price of US$1,319 per 2019) revenue and earnings that missed Mackie Research’s mark. An- gaining share of advertising bud- (ASND-TSX, $0.52) with a “buy” ounce in 2019 and US$1,375 per alysts André Uddin and Yue Toby Ma have reduced their U.S. sales gets, and Hollywood launching di- recommendation and a target ounce in 2020 - both up seven per estimate for Trogarzo, an entry inhibitor HIV medication from the rect-to-consumers streaming ser- share price of $1.80. cent from our previous estimates,” company, in turn prompting a lower target price for Theratechnolo- vices. That being said he notes that The analyst says that the com- the analyst says. gies, $9.25 compared to $9.65 previously. the dividend cut in fiscal 2019 and pany has boosted production at its He notes that year-to-date, gold In the quarter, Trogarzo’s U.S. sales were US$6.1 million, signifi- disciplined debt repayments pro- wholly owned El Mochito mine lo- is up slightly at about two per cent cantly weaker than the analysts’ estimate of US$13.3 million. A slow- vide margin and free cash flow sup- cated in Honduras and is present- to land at approximately US$1,308 er-than-expected drug launch “would be very difficult to be turned port and reduce balance sheet risk. ly concentrating on profitably ex- per ounce, as of the date of his re- around,” they add. In response, for the second time this year, they With regards to financial re- panding production and slashing port. He claims it has shown signs of lower their U.S. sales estimates of Trogarzo between fiscal 2019 and porting the analyst notes,”Corus’ expenses. moving higher with a mid-February fiscal 2023 and reduce their U.S. peak sales outlook from US$248 mil- second-quarter fiscal 2019 results He adds that the possible ex- price reaching US$1,341 per ounce. lion to US$180 million. (period ended Feb. 28) were above pansion at the project has a pre- Regarding synergies and divest- Revenues in the first quarter totalled US$15.1 million, much low- expectations. Television advertis- liminary economic assessment ments, Mr. Terry states that since er than the analysts’ estimate of US$21.7 million. A net income loss ing revenues (a key metric) was the (PEA) demonstrating a 58 per cent the merger with Randgold Re- per share of -US$0.02 also missed their expectation of US$0.02 a bright spot in the quarter (11 per internal rate of return (IRR) that sources Ltd. in early January, Bar- share in earnings. The analysts keep their “hold” recommendation. cent growth versus a loss of three may be accomplished without re- rick management has now had per cent last year). Management sorting to equity dilution. some time to focus on integrating attributes the outperformance to “Ascendant is a well-managed, all assets while reviewing opportu- BMO CAPITAL MARKETS roughly a third from a weak comp base metals producer with 2018 nities to divest non-core assets - last year (Winter Olympics), anoth- output of roughly 63 million pounds one of which could be Lagunas er third from pricing, and the re- of zinc, 22 million pounds of lead Norte in South America where it Stornoway Diamond Corp. (SWY-TSX, $0.10) delivered relative- mainder from advertisers recali- along with 1 million ounces of Ag has incurred losses due to opera- ly weak production sales, and revenue due to weather-related plant brating media mix budgets (i.e., (or roughly 91 million pounds of tional problems. issues, and poor (albeit rising) diamond prices during the first quar- digital versus television). zinc equivalent),” says the analyst. The company is also putting ter of 2019, analysts Edward Sterck and Kodees Waran say. “Looking ahead, management “The company expects 2019 pro- further energy into cost reductions, Stornoway reported first-quarter production of 445,000 carats, expects TV advertising growth to duction of approximately 70 million optimizing existing assets and to eight per cent less than the BMO forecast of 482,000 carats. The an- remain positive in the third quarter pounds of zinc, 23 million pounds work with Newmont on the recent- alysts say throughput was six per cent less than they predicted, while of fiscal 2019, but visibility beyond of lead and one million ounces of ly announced joint venture in an average grade of 76 carats per hundred tonnes of ore was two per that remains limited. Subscriber silver (roughly 100 million pounds Nevada, which should close by mid cent lower. However, with operations now running at or above ca- revenues, and merchandising, dis- of zinc equivalent). This increased year. In early March, Barrick and pacity levels, Stornoway plans to catch up on production during the tribution and other revenues were production will further lower the Newmont agreed to form a joint remainder of 2019, the analysts say. They keep their “underperform” both down on a year-over-year ba- unit cost of production. venture to combine their assets in recommendation but offer no target price. sis. Radio remains soft. “Later this year, we expect the gold-rich Nevada. Barrick will own The company reported quarterly gross revenue of $47 million, “Consolidated revenue in- companywill close on a project 61.5 per cent and be the sole oper- falling short of the analysts’ forecast by 15 per cent. The realized di- creased four per cent to $384 mil- debt package of $35 million to ator, and will also control three amond price of US$83 per carat in the first quarter missed their fore- lion (consensus of $374 million), fund an expansion at El Mochito seats of the board of directors (on a cast by four per cent, although it was eight per cent higher than the and adjusted EBITDA (earnings be- that should allow it to produce pro-rata basis), while Newmont fourth-quarter 2018 price - and within the company’s 2019 guidance fore interest, taxes, depreciation over 90 million pounds of zinc, 22 will own 38.5 per cent and will have range of US$80 per carat to US$105 a carat. and amortization) was flat at $113 million pounds of lead and two seats. million (consensus $109 million). 740,000 ounces of silver annually Estimates for synergies have “Adjusted EPS were $0.07 versus at a capital expenditure of $32.8 been announced by management ALTACORP CAPITAL $0.05 consensus and $0.20 last year. million for at least 10 years after a at about US$4.7 billion at a net pre- All in, reported free cash flow was two-year construction and com- sent value over the next 20 years, $84 million versus $82 million last missioning period. which in theory would imply an SNC-Lavalin Group Inc. (SNC-TSX, $34) will sell a 10.01 per cent year. Television revenue was up five “We have not yet made these approximate US$2.9 billion and a interest in the Highway 407 Express Toll Route concession to the On- per cent to $353 million (consensus assumptions in our model, but will US $1.65 per share uplift for Bar- tario Municipal Employees Retirement System (OMERS), one of $341 million) and adjusted EBITDA once a formal announcement is rick. Newmont could benefit by Canada’s largest defined benefit pension plans with $97 billion in as- grew 10 per cent to $114 million made to proceed with the project. US$2.90 per share, according to sets. It will receive gross proceeds of up to $3.25 billion, $3 billion to (consensus $108 million). The expansion would add roughly Mr. Terry. be paid on closing, and retain a 6.76 per cent interest in the highway. “As a reminder, with third-quar- $55 million in net present value to The analyst also believes further Analysts Chris Murray and Marko Tesanovic say the cash will pro- ter fiscal 2018 results, Corus an- our NAV, or approximately $0.55 upside could come from Barrick’s tect SNC’s credit rating and give it a chance to create shareholder val- nounced the dividend will be cut 79 per share to our target price. Addi- copper business, which he sug- ue by buying back shares. They estimate the transaction will net the per cent to $0.24 per share annual- tionally, the company is earning gests is likely under appreciated company about $27 per SNC share on a 100 per cent basis assuming ized in fiscal 2019 (to be paid quar- into an 80 per cent interest in the with copper now moving up close a tax rate of 13.3 per cent (the Quebec provincial capital gains rate). terly instead of monthly), which im- highly prospective Lagoa Salgada to US$3 per pound (from US$2.63 This was above their last published estimate of $25.24 per share plies annualized cash savings of ap- zinc-copper-lead-silver deposit in at the turn of the year). reinforcing the value contained in the Highway 407 asset, they note. proximately $187 million that could southern Portugal that could be- Barrick Gold is one of the world’s Messrs. Murray and Tesanovic reiterate that SNC will ‘outper- help de-lever the balance sheet (the come its second mine.” largest gold producers. form’ peers and raise their target share price for it to $50 from $48. changes imply about 0.35-times in Ascendant Resources is a net debt to EBITDA per year, absent Toronto-based mining company Continued on next page INVESTOR’S DIGEST

190 / May 10, 2019 WHAT THE BROKERS SAY ABOUT CANADIAN STOCKS Issue 9 / 19

Continued from preceding page cent of sales, versus 37.7 per cent the 47 million SMBs in the retail total customer locations, respec- and-bottom line performance, last quarter. Management noted and restaurant industries have mi- tively, are using Payments. This as- earnings per share of $0.31 beat that Rose employees their own ra- grated to a cloud-based POS soft- sumes an average of 1,225 mer- their estimate of $0.15 and con- Akumin diologists. Management is work- ware system. The benefits and fi- chant locations in fiscal 2020 and sensus of $0.20. ing to integrate the operations of nancial returns reaped by access to 5,500 merchant locations in fiscal Furthermore, Styrene costs in PI FINANCIAL the Rose and Broward County ac- the easy-to-use technology at a 2021. For context, Lightspeed’s the fourth quarter softened due to Strong growth trajectory quisitions.” compelling price are encouraging customer location count grew by higher global inventories, lower PI Financial updates its esti- market adoption. approximately 7,300 and 6,400 in global demand related to the ongo- makes year-over-year mates for 2019 with revenue ex- “Competitive market reviews fiscal 2017 and 2018, respectively. ing U.S./China trade dispute; and comparisons unnecessary pected to come in at US$200.9 mil- and our own due diligence sup- “We forecast growth of approx- no unplanned production disrup- lion – compared to US$224.9 mil- port the general view within the imately 8,100, 11,350, and 13,900 in tions. Styrene prices in the first Digested from a March 29 report lion previously – adjusted EBITDA industry that Lightspeed’s cloud- fiscal 2019, 2020 and 2021, respec- quarter are below levels of first- by analyst Robert Gibson to come in at US$49.7 million – based POS software system is a re- tively. We forecast revenue of $103 quarter 2018 and appear relatively compared to US$56.7 million – liable choice for retailers and million in fiscal 2020 and $155 mil- stable to Acumen’s analysts, and Akumin Inc. (AKU-TSX, 2020 revenue expected to come in restaurateurs with complex needs lion in fiscal 2021. We expect Pay- expecting it to have a positive effect US$3.28) reported revenue of at US$243.4 million and 2020 ad- and a desire to leverage its omni- ments revenues to be US$5.8 mil- on gross margin for its near-term US$45.45 million, adjusted earnings justed EBITDA expected to come in channel capabilities (for in-store lion in fiscal 2020 and $32.5 million results. before interest, taxes, depreciation at US$62.4 million. and e-commerce). Lightspeed is in fiscal 2021. We estimate EPS of PFB is a vertically-integrated and amortization (EBITDA) of Akumin is a leading provider of consistently ranked among the -US$0.13 in fiscal 2020 and -$0.09 manufacturer of high-quality in- US$9.2 million and net income at- freestanding, fixed-site outpatient top three platforms. Its strong in fiscal 2021.” sulation products across North tributable to shareholders of US$2.2 diagnostic imaging services in the market share positions in retail Lightspeed provides an easy-to- America. million, or US$0.05 per share, for U.S. verticals such as biking, pets, ap- use, omni-channel commerce-en- the fourth quarter of 2018. parel and jewelry support our abling SaaS platform. Its software The analyst, who reiterates his conclusion. provides customers with the func- Fortress Global “buy” recommendation and Lightspeed POS “We expect approximately 50 tionality to engage with customers, US$7.50 target share price, says per cent annual revenue growth manage operations, accept pay- Enterprises that the company’s substantial CIBC WORLD MARKETS over the next two years. Light- ments and grow their businesses. growth renders year-over-year Let there be light speed’s strong cloud offering sup- Lightspeed’s platform is currently RAYMOND JAMES comparisons unimportant. That ports the achievement of our fore- used at 47,000 customer locations FINANCIAL said, the revenue, EBITDA and net Digested from an April 2 report cast, and a valuation of 10-times and processes over $13 billion in Near-term headwinds income totals were south of the by analysts Todd Coupland forward revenue. gross transaction value. consensus estimates of US$47 mil- and Amy Dyck “The valuation is attractive, dissolve target price lion for sales, US$11.3 million for with upside on payments adop- adjusted EBITDA and US$0.07 for Founded in 2005, Lightspeed tion. Lightspeed trades at eight PFB Digested from a March 28 report adjusted EPS. POS Inc. (LSPD-TSX, $21.38) has a times our conservative fiscal 2021 by analyst Daryl Swetlishoff “As a measure of growth, competitive, cloud-based, point- revenue. Peers trade at 10-times. ACUMEN CAPITAL management is reporting the vol- of-sale (POS) software system for Our forecast assumes only seven Strong results from top to Fortress Global Enterprises ume of procedures performed in small to medium-sized (SMB) re- per cent of customer locations Inc. (FGE-TSX, $1.20) misses Mr. its diagnostic imaging centers tailers or restauranteurs. On aver- adopt payments. We expect full po- bottom Swetlishoff’s expectations for the based on relative value units age, SMBs on Lightspeed’s POS tential of 50 per cent to be reached fourth quarter of 2018, saying that (RVUs),” says Mr. Gibson. “Aku- add 20 per cent, or approximately in a few years. Digested from a March 11 report it is facing headwinds in the dis- min volume was 1,020,000 RVUs $100,000 in annual sales. Recently, “Holding all other assumptions by analysts Nick Corcoran solving pulp market (DP). As such in the quarter versus 850,000 the company added fully integrat- constant, at 20 per cent adoption and Brian Pow he reduces his DP forecast result- RVUs in the third quarter of 2018, ed payments to its offering. To- the share price could be $33 and at ing in a $1 decrease to his target a 20 per cent increase. They not- gether, according to Mr. Coupland 50 per cent adoption up to $55 us- PFB Corp. (PFB-TSX/VEN, price to $2 per share. Note, DP is ed that some of this growth was and Ms. Dyck, POS and Payments ing a straight nine times enterprise $10.65) released strong fourth- bleached wood pulp or cotton lin- because the operations were bro- strengthen Lightspeed’s platform value to sales multiple. quarter 2018 results which were ters, which can be spun into textile ken when acquired, so were com- and position it for strong financial “Lightspeed’s founder-led man- well above Messrs. Pow and Corco- or plastic-like fibers or films. ing off a low base. results over our forecast period. agement team and board has a high ran’s estimates, as well as the con- His “outperform” recommen- “However, excluding acquisi- The analysts initiate coverage of pedigree and a strong track record, sensus. They cite rising demand dation for Fortress Global Enter- tions made in 2018, revenue fell 3.4 the company with an “outper- with a competitive product offering south of the Canadian border for prises, however, is a function of per cent, due to the lower contri- former” recommendation and $26 and compelling opportunities that the beat. strong leverage to DP prices with bution from the Texas operations target share price. can be leveraged with the compa- This is also the third consecu- additional upside from the ac- after Akumin acquired the non- As per the analysts given that ny’s business plan. Lightspeed is tive quarter that PFB has beaten quired Xylitol venture (under the controlling interest. We are lower- presently the SMB market for POS led by its founder and CEO, Dax the analysts’ estimates. They main- subsidiary of Fortress Xylitol Inc.). ing our projected revenue per cen- innovation is large with a low cloud Dasilva, who owns 17.9 per cent of tain their “speculative buy” rating Xylitol is an organic sweetener. ter in Texas and in Florida.” adoption rate. The total available the shares and 46.6 per cent of the with an increased $13 per-share FGE entered into a Technology Li- “EBITDA margin fell to 20.2 market for Lightspeed’s POS sys- votes on a fully diluted basis and in- target price (from $11.25). cense and Collaboration Agree- per cent from 21.2 per cent. With tem is 47 million SMBs. Lightspeed cluding the full over-allotment. Believing the good quarterly re- ment with Mondel_z International a full quarter of the Rose acquisi- has only 47,000 customer locations “Our baseline forecasts for fiscal sults “have set the stage for a strong Inc. of Illinois, one of the world’s tion, employee compensation today. The analysts further high- 2020 and 2021 assume an average 2019”, the analysts list organic largest snacking companies. jumped 30.8 per cent or 42.4 per light that, “Less than 20 per cent of of two per cent and 7.4 per cent of growth and price increases having The analyst notes that DP mar- been the main driving force for kets have come under pressure re- top-line revenue growth in the past cently leading to his tempered and moving forward. Meanwhile near-term outlook. DP prices strategic initiatives and styrene pulled back throughout the fourth Do you have “Never Spend Money”? prices have driven margin im- quarter averaging roughly US$915 provement, helping to maximize per metric tonne (down by about A 65-year-old couple had all the money they will ever need, and a its bottom line too, the analysts two per cent quarter-over-quarter) lot more they will never spend. As custodians of “never spend money”, proclaim. while the slightly lower Canadian they asked us to help preserve family wealth for future generations. Importantly to them, manage- dollar value resulted in relatively With guaranteed returns, zero market risk and no interest rate risk. ment is on track to reach its target flat prices. of $200 million in revenues. For the Pressure on dissolving pulp has Mission accomplished fourth quarter, revenue of $35.3 been apparent, however, with flex We arranged a secure compounded million (up 25.8 per cent year-over- mills in China producing more DP after-tax return of 6.5%, the equivalent of 13% before tax. year) beat the Acumen’s estimate and increased imports from In- of $29.1 million and consensus of donesia to China. This has resulted $29.4 million. in downward pressure on hard- Our team of expert advisors across Canada can help you too. The various in estimates was wood DP, with selling in the Contact us today for your free and no-obligation consultation. due to geography, Messrs. Pow and US$870-to-US$880 per metric It will be a great investment of your time. Corcoran state, pointing to the U.S. tonne range of late. segment increasing 42 per cent (ex- For the fourth quarter, Fortress Mark Halpern, CFP, TEP cluding foreign exchange) year- reported operating profits of $4.2 Certified Financial Planner, Trust & Estate Practitioner over-year, while the Canadian seg- million (from continuing opera- ment rose 12 per cent. The Ameri- tions), lower than the analyst’s es- Call us at 416-364-2929 or toll free 1-866-566-2001 can segment came in well above timate of $5.5 million. Relative to Email: [email protected] their estimates of $10.3 million at the third quarter mark of $7.5 mil- $16 million. lion, results were down 44 per cent As a percent of revenue general quarter-over-quarter due to lower and administrative costs related to sales and higher costs. sales were 14.4 per cent this year, Fortress Global Enterprises is a down from 16.2 per cent last year. growth oriented pulp manufactur- This, according to the analysts, er focusing on the production of Read Mark’s articles in The TaxLetter® “reflects the operational leverage specialty cellulose for sale in world Get your free Estate Planning Toolkit at wealthinsurance.com/toolkits.html in the business with increased markets. scale”. As a result of better top- INVESTOR’S DIGEST

Issue 9 / 19 WHAT THE BROKERS SAY ABOUT CANADIAN STOCKS May 10, 2019 / 191

formulation, processing, packag- from $3.61) and $3.81 in fiscal 2021 lyst. “In addition, Encana’s FCF materially de-lever. MediPharm ing, and distribution to its part- (versus $4.08 initially). For fiscal yield and growth rate is in line with Mr. Cooper gives the stock a ners, fulfilling growing consumer 2020, he expects revenue and nor- some of the consensus ‘top pick’ “buy” rating and $0.75 target share Labs demand for branded products, the malized operating profits to in- US/Permian names but is trading price, down from $0.90. analysts state. crease seven per cent and 19 per at a significant consensus Mr. Cooper provides further de- MACKIE RESEARCH The White Label platform will cent, respectively. EV/EBITDA discount of 4.9 times.” tails on the financial results, “While Solid results for cannabis be of greater use when the federal BRP designs, develops, manu- Mr. Matthews reiterates his the fourth-quarter fiscal 2018 re- government legalizes cannabis factures, distributes, and markets “outperform” recommendation sults were down on a year-over- oil extractor edibles and concentrates in Cana- snowmobiles, all-terrain vehicles, but boosts his target share price by year basis (as expected given the da (set for October 2019). Accord- and personal watercraft vessels. a loonie to $11. regulatory changes earlier in 2018), Digested from a April 4 report ing to market data, cannabis flow- Encana is a Calgary-based nat- the results were much improved by analysts Greg McLeish er sales in Colorado and Oregan ural gas company engaged in hy- versus the third quarter of fiscal and Nicola McFadden dominated market share upon le- Encana drocarbon exploration. 2018. In particular, fourth quarter galization, but saw a rapid decline revenue was $30.9 million versus The analysts keep their thesis and a subsequent increase in con- ALTACORP CAPITAL $29.7 million in the third quarter for MediPharm Labs Corp. (LABS- centrated oils market share Coverage transferred after Centric Health (four per cent growth) driven by a TSX/VEN, $3.62) intact, saying the through 2018. If this trend for 2.2 per cent sequential growth in cannabis oil extraction company cannabis oils happens in Canada deal completion BEACON SECURITIES the bed count (29,761 as of Dec 31). delivered solid fourth-quarter 2018 as well post legalization of The turnaround we have “Segment EBITDA (earnings results. They keep their “buy” rec- cannabis edibles, the analysts sug- Digested from an April 8 report before interest, taxes, depreciation ommendation and $6 per-share gest MediPharm is very capable of by analyst Thomas Matthews been waiting for is upon us and amortization) margin (before target price. profiting from it. corporate overhead) also improved On April 3, MediPharm Labs re- A first mover in extraction ser- AltaCorp transferred coverage Digested from a March 29 report by 210 basis points to 6.9 per cent. ported its fourth-quarter results for vices, MediPharm Labs received its of Encana Corp. (ECA-TSX, $7.16; by analyst Doug Cooper The company indicated that first the period ended Nov. 30, 2018. oil production license in March ECA-NYSE, US$7.27) to Mr. quarter of fiscal 2019’s margin was The results for quarter and the year 2018 and was the first exclusively li- Matthews after the Calgary-based Centric Health Corp. (CHH- nine per cent (on anticipated high- are outlined with quarterly revenue censed for cannabis oil extraction in company, firstly, completed the TSX, $0.30) is looking to discon- er revenue as first quarter ended of $10.2 million - which was in line Canada. Newfield Exploration deal and, tinue its surgical segment, which bed count was approximately with the analysts’ estimate. secondly, issued a formal capital analyst Doug Cooper sees as the 31,000) and that it expects margins Operating profit for the quarter deployment guidance. next key catalyst for the stock. Mr. thereafter to be ‘double-digit’. was $2.1 million (21 per cent mar- BRP “With the acquisition of New- Cooper believes Centric will ob- “Historically, this segment en- gin) and this was significantly high- field, Encana is now firmly in the tain a material price for the surgi- joyed annualized EBITDA margins er than their $1.4 million (14 per DESJARDINS cross-border resource play cover- cal assets of $50 million to $60 cent margin) forecast. This beat CAPITAL MARKETS age group (rather than Canadian million, which will enable it to Continued on next page was primarily attributable to low- Sentiment and fundamen- Oil Sands and Integrated names),” er-than-forecast general and ad- says the analyst. ministrative expenses, as well as tals disconnected: analyst “Although it is the largest of the sales and marketing expenses. cross-border names under cover- Of Special Interest Net loss for the quarter was - Digested from a March 25 report age, it will still be important to $3.5 million (or -$0.04 per fully-di- by analyst Benoit Poirier monitor changes to productivity, luted share). It is normal for mari- completion styles, cost trends, Largo Resources juana companies today to show a The analyst headlines his area specific infrastructure chal- loss, they add. However, this figure fourth-quarter fiscal 2019 (period lenges and most importantly cube CIBC WORLD MARKETS included a $4.2 million expense re- ended Jan. 31) recap of BRP Inc. development results in order to Compelling risk-to-reward scenario lated to the company’s qualifying (DOO-TSX, $35.61) by stating there answer the ultimate question: transaction that occurred in Octo- is a disconnect between market does Encana create value for Digested from a April 1 report by analysts Bryce Adams ber 2018. After removing expense sentiment and fundamentals. He shareholders?” and Eve Hurowitz from the company’s earnings the suggests its lower share price (was According to the analyst, Alta- analysts estimate that the compa- over $70 in Sept. 2018) is unde- Corp doesn’t really believe in ex- The analysts’ initiate coverage of Largo Resources Ltd. (LGO-TSX, ny would have reported net in- served, and provides a buying op- pansion for the sake of expan- $2.10) by declaring it one of the few pure plays on the vanadium mar- come of approximately $500,000, portunity for investors. sion, and has backed this up by kets, offering a “compelling risk-reward scenario”. They give Largo an which breaks even at $0 per share. While he remains bullish on showing that past production ex- “outperformer” rating and a 12- to 18-month price target of $4 per The company also reported a the recreational-vehicle maker, pansion does not always trans- share. Their upside-case outlook assumes that the new stricter stan- net cash position of $7.9 million. with a “buy” recommendation - late to value creation. While this dards in China are implemented quickly and firmly, leading to higher Subsequent to the quarter a especially after it posted strong is particularly evident in Canada, demand for vanadium in rebar and a more significant supply deficit. number of options and share fourth-fiscal quarter (period end- it is more and more becoming China accounts for 45 per cent of total consumption. purchase warrants were exer- ing Jan. 2019) results - he reduces the case in the lower 48 south of Largo is a high-purity vanadium producer. The high-purity market cised which increased the cash his earnings per share forecast for the border. comprises roughly 10 per cent of the total vanadium market, and Largo position of the company by ap- the coming years. The downward For investors looking to invest in can supply about 60 per cent of this specialized demand. High-purity proximately $3.2 million. Fur- estimates forced him to reduce Encana, Mr. Matthews focuses on vanadium yields a price premium over and above standard vanadium, thermore, like many marijuana his target price to $65 per share what they are actually paying for. and Mr. Adams and Ms. Hurowitz explain that it can benefit from Chi- companies, MediPharm is signif- from $74. “Most energy companies trade na opting for purer vanadium. They see demand for vanadium exceed- icantly increasing its production “We remain bullish on the at a value higher than the blow ing supply until 2023. levels and offering more exposure name in light of its unmatched re- down cash flow of the current as- With Largo being low-cost in an elevated pricing market, the ana- for its retail branding. tail sales momentum, potential sets, implying that the market is lysts model a 2019 free cash flow yield of 20 per cent (and even greater MediPharm produces pharma- growth opportunity associated giving credit for future inventory, for the next five years). With that cash, they expect Largo to focus on ceutical-grade cannabis concen- with the Can-Am Ryker (three- land value or drilling upside,” says shareholder returns, buybacks or special dividends. trates using proprietary supercrit- wheeled side-by-side vehicles), the analyst. “We estimate Largo will be debt free and still be able to pay out a $0.30 ical carbon dioxide and ethanol proven track record of market “Based on our PDP methodol- dividend by 2019 year-end. This represents a dividend yield of over 10 extraction processes. The compa- share gains through innovation, ogy, we attempt to quantify which per cent, greater than the industry average of 2.5 per cent,” they say. ny’s five primary extraction lines and attractive valuation. We also assets are fully baked into the As of Dec. 31, 2018, Largo held $206 million in cash and cash equiv- operate in 10,000 square feet of its expect that management will be stock and which assets can be had alents, total working capital of $135 million, and debt of $117 million. facility and produce 10-to-15 kilo- active with (share buybacks) to cre- for ‘free’. Based on our assump- The company has since reduced its debt significantly by repurchasing grams of resin per day, with an av- ate value for long-term sharehold- tions for Newfield’s base PDP and and retiring amounts during this first quarter - with the plan to retire erage active cannabinoid content ers,” Mr. Poirier states. a five-year development program the remainder of the outstanding debt by the second quarter. of 75 per cent. Revenue of $1.506 billion (up 23 at the current pace in the Permian, “We forecast a steadily increasing cash balance going forward, with Construction of the facility’s per cent year-over-year) during the Eagle Ford, Williston Basin and the company generating cash flows from operations (before working Phase 2 is underway and fully- fourth quarter beat the analyst’s Duvernay, we calculate that the capital) of about $230 million in 2019 and about $430 million in 2020 funded. Management expects it to forecast of $1.359 billion and con- Anadarko, Montney and Uinta and no further debt repayments following the second quarter, when be operational in the second half sensus of $1.417 billion. Normal- can be had for ‘free’ with an in- the senior notes are fully retired,” they remark. of 2019. The addition of 100,000 ized fully-diluted earnings per vestment in Encana at today’s Another highlight for the analysts is Largo’s 100 per cent offtake kilograms annual capacity with share (EPS) of $0.88 also beat his share price.” agreement with Glencore PLC (the Swiss-British commodity trading this phase will bring the compa- estimate of $0.77 and the consen- The company is projected to company). As per the agreement, Largo does not control the end-mar- ny’s total production capacity to sus mark of $0.83. All segments achieve an average of about five ket distribution of its products - for now. The offtake expires in May 2020. 250,000 kilograms per year, posi- contributed to the year-over-year per cent free cash flow (FCF) as Thereafter its expiration, the analysts say they conservatively expect tioning MediPharm as one of the revenue increase, with strong well as a dividend yield over the Largo to receive a US$1.50 per pound premium price for its high-purity largest extraction service providers growth in seasonal products (up 32 coming 24 months while also ex- product compared to management’s expectation of US$3-to-US$4 per in the industry. per cent year-over-year) and year- panding production per share by pound - when they expect prices to rise in their aforementioned upside- MediPharm also recently round products (up 17 per cent approximately 15 per cent. case scenario until 2023 when vanadium supply meets demand. launched its White Label Solu- year-over-year). “Encana’s FCF yield is below Their downside-case outlook assumes new stricter standards are tions platform. On April 1st, the For fiscal 2020, BRP guided to that of the integrated Canadian not implemented in China, a global economic slowdown, and in- company launched a new pro- seven-to-11 per cent year-over- names, however Encana is forecast creased niobium substitution (with deposits being dug in Nebraska by gram as a strategy to capture the year revenue growth and normal- to deliver significantly larger NioCorp Developments Ltd.), resulting in excess supply by 2021. expected demand for derivative ized EPS of $3.50 to $3.70. Mr. growth rates (PPS and PDP) than Largo Resources is a mineral company focused on the production of products this year. MediPharm’s Poirier expects adjusted fully-dilut- the largest Canadian names while high-purity vanadium products at the Maracás Menchen mine in Brazil. White Label program will provide ed EPS of $3.59 in fiscal 2020 (down trading at 4.8 times,” says the ana- INVESTOR’S DIGEST

192 / May 10, 2019 WHAT THE BROKERS SAY ABOUT CANADIAN STOCKS Issue 9 / 19

Continued from preceding page (or about 60 per cent of the market engaged in the cultivation and dis- 13.3 per cent, with interest expenses Cresco Labs share) - “where a professional distri- tribution of cannabis. was $700,000 above his expectation. of 12 per cent to 14 per cent. A re- PI FINANCIAL bution company is essential for long- On top of the major earnings turn to such double digit margins Building a cannabis em- term success,” the analysts state. miss, Wajax noted non-cash ac- would be a return to levels last seen They add, “Origin House has Wajax counting errors that resulted in in the third quarter of fiscal 2017. pire in the U.S. consolidated two successful dis- overstated earnings for prior years! We are now modeling segment tributors (RVR and Alta Supply) RAYMOND JAMES Management revised its 2017 and margin of 11 per cent in fiscal 2019 Digested from an April 4 report and quickly became the industry FINANCIAL nine-month 2018 unadjusted EPS and 14 per cent in fiscal 2020. by analysts Jason Zandberg, leader. This distribution arm has Quarterly results are a down to $1.50 from $1.35, and “Concentrating our forecast Devin Schilling and been built by Ted Simpkins, who from $1.60 to $1.47, respectively. therefore on the specialty phar- Fayassir Haqna had been successful as an alcohol grinding setback Furthermore, net debt closed the macy segment, we are now mod- distributor building Southern Wine year at $236 million, up 20 per cent eling period ended beds of 32,500 Being a multi-state operator and Spirits into California largest Digested from a March 25 report quarter-over-quarter. The increase (31,250 average for year) and (MSO) with cannabis operations wine and spirit distributor. by analyst Ben Cherniavsky was primarily driven by the $52- 36,000 (34,350 average) for fiscal in eleven U.S. states, the analysts “We expect dispensary counts million acquisition of the Quebec- 2019 and fiscal 2020 respectively. claim Cresco Labs Inc. (CL-CSE, to grow considerably in the next The analyst says he saw so many based electromechanic company, Using the fourth quarter fiscal $16.70) is building an empire. few years and we believe that the problems with Wajax Corp.’s (WJX- Groupe Delom Inc. last fall. 2018 annualized revenue per bed They initiate coverage with a company’s exposure will maintain TSX, $16.26) fourth-quarter 2018 “We expressed concerns about ($4,150), we arrive at revenue of “buy” recommendation and $23 or increase from its current 60 per results that he claims he doesn’t the company’s (One Wajax) efforts $130 million and $142.6 million per-share target price. cent market penetration level.” know where to start. He lowers his to gain market share through ag- respectively. At an 11 per cent and Cresco operates, or will soon op- Revenue growth is driven by target price to $17 per share from gressive pricing, a tactic that effect- 14 per cent segment margin and erate, in states with a combined pop- both dispensary sales as well as its $26.50, but keeps his “market per- ed gross margin erosion last quar- four per cent corporate overhead, ulation of 151 million or 68 per cent wholesale revenue for branded form” recommendation. ter. We also warned about the com- we arrive at EBITDA of $9.1 mil- of the total population of 220 million product sold in third-party dispen- “The stock’s (recent one-day) plexities of managing conflicting lion in fiscal 2019 and $14.3 mil- people in medical/recreational saries. The analysts believe this ap- 17 per cent decline says it all. This brands in the same product cate- lion in fiscal 2020. This would states. Cresco also has licences in proach will drive superior growth quarter marked a major setback to gories, which has since manifested mark a dramatic improvement seven limited licensed states. Ac- relative to some other MSOs. the ‘One Wajax’ strategy,” Mr. itself into some related supply prob- from the third quarter of fiscal cording to the analysts, this allows Cresco’s reported operating Cherniavsky says. lems in forestry (i.e. falling lumber 2018 annualized nadir level of $5.6 Cresco to establish a market pres- profit margins of 44 per cent in its For the fourth quarter, results prices leading to declining produc- million thanks to the operational ence early in these state’s cannabis recent quarterly financial disclo- missed Mr. Cherniavsky’s forecast tion),” Mr. Cherniavsky says. improvements the company has evolution before full recreational use sure (third quarter of 2018). This by nearly every measure. Wajax re- “Add slowing growth in end made over the past six months.” is implemented (Illinois and New margin is the second highest of any ported adjusted earnings per share markets, increased leverage and an Centic Health primarily focuses York are two prime examples). of the U.S. multi-state operators re- (EPS) of $0.41, well below consensus over-statement of past earnings to on two core health-care businesses: Cresco manufactures and packages ported to date. The analysts fore- of $0.62, and the analyst’s forecast of the equation and we see no reason Specialty Pharmacy services a a wide spectrum of over 500 cast sales of US$42.9 million, $0.69. It also came in below last to alter our cautionary thesis or growing network of fulfilment cen- cannabis products. Furthermore, US$335.4 million and US$774.9 year’s fourth-quarter EPS of $0.45. change our recommendation on tres that deliver high-volume solu- Origin House, a recent acquisition, million for fiscal 2018, 2019 and Revenues of $390 million were 11 this stock,” he concludes. tions to seniors’ residences and the has over 50 brand relationships. 2020, respectively. Net earnings per cent below his forecast; gross Wajax is a distributor engaged Surgical and Medical division is The Origin House includes the forecasts for the same period are profit margin ratio of 17.2 per cent in the sale and after-sales parts and Canada’s largest independent sur- largest California distributor net- US$10.2 million, US$77.3 million was 100 basis points as well. Gener- service support of mobile equip- gical provider operating six facili- work. In total, Cresco has distribu- and US$227.2 million. al, sales and administrative costs as ment, industrial components and ties across four provinces. tion in over 725 dispensaries in the Cresco Labs (formerly Rands- a percent of revenue was 14.1 per power systems. U.S. including 500 in California alone burg International Gold Corp.) is cent, compared to their estimate of

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Issue 9 / 19 WHAT THE BROKERS SAY ABOUT U.S. STOCKS May 10, 2019 / 193

ividends are a big part of The analyst highlights that sales levels and worse utilization than he suggests restaurant margins with demand growing by about any corporation’s re- in the critical North America seg- anticipated.” should improve thanks to better one per cent, or 800,000 tonnes. sponsibility to its share- ment fell short of expectations. labour and operating costs. holders. When a com- This, combined with weaker re- WINGSTOP 3M Dpany has a good year, its profit sults at subsidiary Converse, was must be paid out to its sharehold- only partially offset by stronger rev- WING-NASDAQ, $71.76 MOSAIC MMM-NYSE, $215.41 ers to reflect their importance enue delivery across Europe, the BMO Capital Markets MOS-NYSE, $27.14 Credit Suisse within the company. Middle East, Africa, China, Asia Pa- Andrew Strelzik CIBC World Markets John Walsh cific and Latin America. “Looking Jacob Bout and Rahul Malhotra DOW forward, Nike’s fourth-quarter Analyst Mr. Strelzik compares In March, 3M Co.’s CEO guide is weaker than expectations. Wingstop Inc. to a unicorn, saying Messrs. Bout and Malhotra at- Michael Roman confirmed first- DOW-NYSE, $53.50 On balance, we remain optimistic the nostalgic, aviation-themed tended the Mosaic Co.’s 2019 Ana- quarter 2019 organic growth was Credit Suisse on Nike’s revenue growth opportu- restaurant has unique characteris- lyst Day in Florida on March 28, flat-to-slightly negative through Christopher Parkinson nities and believe the company is tics as a stock investment. Though where management spoke to its February due to continued weak- showing healthy growth as a result expensive at over $70 per share, he 2021 operational targets. It also ness in automotive and electronics The analyst initiates coverage of of several innovation initiatives still feels it is undervalued. He ini- provided an outlook for phosphate in the Asia-Pacific region. The Dow Inc. with an “outperform” across key product families. That tiates coverage of Wingstop with an and potash markets, which the an- company has dropped its calendar stance and $62 target share price. said, our conversations with in- “outperform” rating and $85 per alysts describe as “balanced” sup- 2019 growth estimates for its auto- Mr. Parkinson’s favourable thesis is vestors suggest this top-line story is share target, offering 15-to-20 per ply-and-demand-wise. motive sector, normally highly based on his belief that cash flow well-understood. cent potential upside. All in all, they are assuming flat profitable. Analyst John Walsh pre- generation will improve to about “Selling, general and adminis- So what makes WING so pricing and about eight per cent dicts “mixed pressure” for the 90 per cent of EBITDA (earnings trative as a percent of sales was unique to Mr. Strelzik? Well he says compounded annual growth rate company overall in the very near before interest, taxes, depreciation heavy relative to expectations at it offers the “desirable combina- (CAGR) over Mosaic’s 2019 mid- term with a recovery soon after. and amortization), up from a 77 32.2 per cent versus analyst and tion of long-tailed unit growth and point guidance. The company The analyst keeps his “outperform” per cent average between 2015 and consensus estimate of 31.6 and superior operating/growth met- made no changes to its 2019 guid- recommendation and target price 2017, representing $1 billion in ad- 31.7 per cent, with Nike highlight- rics, but in an asset-light model ance, but expects weakness in the of $220 per share. ditional free cash flow. ing elevated spend in technology that enables cash returns to share- early part of 2019 due to the late “We see risk to the high end of The analyst goes into further and direct-to-consumer to fuel holders at levels usually reserved start in spring activities. fiscal 2019 earnings per share details noting positives such as growth. Other income related to for slower growth mature peers”. Even the wildcard of Chinese (EPS) guidance based on lower “Dow’s diversified portfolio across foreign exchange losses also was a According to him, these charac- phosphate export levels in 2019 organic sales growth (current its three segments, Performance critical tailwind in the quarter, teristics make Wingstop “among does not change their model for guidance is one-to-four per cent). Materials & Coatings, Industrial driving the majority of the EBIT the most attractive long-term Mosaic, so the analysts maintain In aggregate, we see 70-to-90 ba- Intermediates & Infrastructure (earnings before interest and taxes) growth investment opportunities” their “neutral” recommendation sis points of earning downside and Packaging & Specialty Plastics beat.” The analyst gives the stock a in the restaurant sector. He expects and $34 share price target. risk at the mid-point of 2019,” should mitigate downside risk “neutral” recommendation and WING to modestly exceed consen- Overall, Mosaic expects reason- says Mr. Walsh. versus peers, while offering ample $84 target share price. sus 2019 and 2020 earnings esti- able earnings before interest, taxes, The analyst modestly reduces opportunity to outperform over mates, with strong comparables depreciation and amortization his first-quarter EPS forecast to the cycle, all while improving cash TESLA momentum starting in late 2019. (EBITDA) growth, in the form of a $2.50, which results in a 2019 EPS conversion. This supports a valu- “We expect WING to realize at $600 million EBITDA increase in forecast drop of a dime to $10.65. ation level at the high end of the TSLA-NASDAQ, $291.81 least mid-teen system sales growth 2021 versus the midpoint of 2019. He decreases his 2020 and 2021 comp group, equating to approxi- Goldman Sachs and 15 per cent or greater in oper- The EBITDA guidance lists $2.3 bil- forecast to $11.50 and $12.55 per mately seven times our 2020 EBIT- David Tamberrino ating-profits growth for the fore- lion for 2021. share, respectively. DA estimate and a 4.5 per cent seeable future, with strong cash re- But about $200 million of this The $220 target price equates to dividend yield. Tesla Inc.’s vehicles, the Model turns to shareholders on top. $600-million EBITDA increase is a 10 per cent peer premium, large- “Our expectation that plastics S/X and Model 3 first-quarter 2019 “Our discounted cash flow price driven. Assuming flat pricing, ly based on 3M’s ability to “accel- margins will steadily improve on deliveries came in well below the model implies upside to our price this implies an overall $400-million erate organic sales growth driven stable global demand and ‘bal- analyst’s estimates and consensus target as we derive current value of EBITDA - or about eight-to-nine by product differentiation, easier anced’ new supply. There should expectations, and both declined $100 and estimate WING could per cent CAGR over a two-year pe- second-half 2019 comparables, also be steady improvement in the from fourth-quarter 2018 levels. achieve our price target by reaching riod. About half of the EBITDA and cyclical-versus-secular pres- II&I segment during second half of Mr. Tamberrino believes that de- only 5,000 units. Proprietary real es- growth will come from MOS’ inter- sures in the automotive and elec- 2019 (off of a low second half of mand will likely be hindered by the tate analysis provides confidence in nal operational and strategic im- tronics segments,” says the analyst. 2018 base). We anticipate in the phasing-out of the U.S. federal the U.S. target of 3,000 units/loca- provements while about a $100- The company’s 2019 free cash flow first half of 2019 ‘headline’ risk due electric vehicle tax credit. More tions (about 1,125 currently)” million increase is driven by high- yield will be 4.9 per cent, according to trade noise and Euro macro negative news includes production He adds that profit margins will er volumes, according to manage- to his estimates. stagnation, but believe DOW’s levels that disappointed in the improve dramatically starting in ment’s expectations. The company has also an- $2.81 per share dividend and $3 quarter. The Model 3 weekly pro- the fourth quarter of this year due Lastly, Mosaic forecasts 2019 nounced it will realign from five billion buy-back should limit duction achieved an average of ap- to the expected expansion of the potash markets to be in a slight segments to four segments (in the downside risk until second half proximately 4,800, only slightly U.S. chicken industry. Thereafter, deficit by about 300,000 tonnes, second quarter). conditions improve. In the long- higher than the 4,700 in fourth term, we anticipate improving ex- quarter of 2018 and below the ana- ecution (versus historical prece- lyst’s estimate of 5,500 per week for dent), refined disclosure, and dis- the first quarter of 2019. ciplined capital deployment are The analyst gives the stock a A market darling once again cause for enthusiasm.” “sell” recommendation and a $210 target share price. A new era has been dawning at WALT DISNEY brand strength and robust NIKE He notes, “Despite the delivery Walt Disney Co. since the company DIS-NYSE, $112.52 portfolio of content to create results falling sequentially, the closed its $70-billion acquisition of Goldman Sachs a mass market streaming NKE-NYSE, $88.01 company said that they continue 21st Century Fox in March and the Drew Borst bundle with Disney+ (for fam- Goldman Sachs to see Model 3 orders in the U.S. approaching debut of its streaming ilies as well as science-fiction Alexandra Walvis outpacing what they can deliver service in late 2019. The company continues to pack and super hero superfans), Hulu (with edgier pro- (although we think this was likely a punch in the analyst’s eyes as he reinstates the gramming for adults) and ESPN+ (sports), all for a Nike Inc. played reasonably helped by price reductions and the stock’s “buy” recommendation and sets a $142 tar- competitive retail price. well, reporting fiscal third-quarter introduction of the $35,000 Model get share price, a potential upside of 28 per cent. “With so much attention on Fox and direct-to- 2019 earnings per share of $0.68, 3) and reaffirmed their 2019 deliv- The analyst notes, “We see the Fox acquisition consumer, we think the market may be underap- above the analyst’s estimate of ery guidance of 360,000 to 400,000. resulting in economies of scale, increased bargain- preciating growth in Disney’s core Parks and Film $0.66. The analyst does point out The company also noted that first ing power with distributors, content diversification businesses. The domestic parks (still 25 per cent of that this quarter’s beat was largely quarter 2019 net income would be (i.e., Fox’s edgy adult programming), and increased pro-forma operating income) are poised for accel- driven by taxes, other income (for- negatively impacted by these low- international reach. We estimate $2 billion in cost erating growth in fiscal 2019 and 2020 driven by a eign exchange gains and losses), er delivery results. However, we synergies by the two-year anniversary, or 11 per 10 per cent ticket price increase - which is nearly and a timing shift on supply chain think the disappointing results cent of fiscal 2019 pro-forma operating income.” two times the trailing run-rate. Major new theme investments within gross margins. likely put pressure on consensus With regards to the streaming platform the ana- park attractions are a boost, both the recently estimates for the full year especial- lyst sees this as the mark of a momentous shift in launched (Pandora: World of Avatar in 2017, Toy ly for Model S/X deliveries. the company’s norm of content monetization from Story Land in 2018) and soon-to-launch Star Wars NOTA BENE “Altogether, the delivery results third-party licensing to direct-to-consumer stream- Land in 2019. History shows that major new attrac- will put pressure on Tesla’s shares, ing. They go on to note, “Despite our expectation tions drive a meaningful and sustained improve- PL’s Investment Planning and corroborates our belief volume for near-term investment headwinds, we view Dis- ment in park attendance. The park price increase is MCommittee recommends expectations for its products in ney+ streaming as a positive long-term strategy giv- obfuscated by the implementation of seasonal pric- that around 25 per cent of a 2019 are too high with consumer en the rising importance of developing direct-to- ing for Walt Disney World multi-day tickets and ap- Canadian investor’s stock demand likely lower as subsidies consumer relationships, with higher long-run mar- pears underappreciated by the consensus. Our fis- portfolio be in U.S. equities. phase out,” says Mr. Tamberrino. gins (from absorbing third-party distributor profits) cal 2019 and 2020 domestic parks operating income This allows greater diversifica- “Further, this likely puts down- and better customer data about consumption. is seven per cent above consensus estimates. tion. But when investing in the ward pressure on our EBITDA “Although there are inherent risks in entering “The calendar 2019 film slate is especially ro- U.S., the focus should be on (earnings before interest, taxes, de- the competitive U.S. subscription video on demand bust, with franchise films with ample consumer companies that Canada lacks preciation and amortization) and (SVOD) market, DIS should be able to leverage its products opportunities.” or has in short supply. free cash flow estimates, as well as consensus, given the lower volume 194 / May 10, 2019 INVESTOR’S DIGEST Issue 9 / 19

WHAT THE MARKET LETTERS SAY Infrastructure attracts market buzz

ver the past two weeks, a from its Phase 2 clinical trial to eval- (EPD-NYSE, US$28.87) which he graphic market, accounting for 77 recurring theme has uate SB206 - a test treatment for claims are all fantastic companies per cent of sales last year, up from Cabot Emerging Markets Investor, repeatedly come up molluscum demonstrated a clear that offer deep discounts, high 65 per cent in 2014. In 2018, Hilton c/o Cabot Heritage Corporation, among the letters and treatment effect on the complete yields and downside protection. grew per-share profits 55 per cent, 176 North Street, Salem, MA Oanalysts we follow: infrastructure clearance of all molluscum skin He provides two other nice oppor- sales 10 per cent, and operating 01970 U.S.A., (978)-745-5532. spending. The world needs to lesions after 12 weeks, with signs of tunities in the portfolio right now. cash flow 36 per cent. Free cash Introductory one-year rate: revamp its infrastructure, accord- efficacy evident within a fortnight. American Express Co. (AXP-NYSE, flow jumped 49 per cent to US$1 US$397. ing to various studies. In the next This is encouraging to the advisory. US$111.76) which operates in an billion. Seeking to press its advan- couple of decades, the cost of Looking at the financial numbers, it obscenely profitable business with tage, Hilton’s pace of expansion The joint Global Infrastructure bringing the world’s infrastructure reports that for the first nine months strong tailwinds over the interme- ranks among the fastest in the Hub and Oxford Economics report up to code will easily add up to tril- of 2018, the company had a net loss diate and longer term. It also sells hotel industry. Hilton opened estimates that total spending on lions of dollars. One can invest in of -US$0.77 earnings per share (EPS) at a cheap valuation and has fan- more than 450 hotels last year and infrastructure will be US$94 trillion those companies that lay down the versus -US$1.79 for the same period tastic momentum. NextEra Energy has another 2,400 in its develop- in the next two decades. That’s a foundations of infrastructure, or prior. Cash and cash equivalents Inc. (NEE-NYSE, US$189.65), ment pipeline. More than half of staggering figure. To put it in per- the brokerage houses that finance amounted to US$12.2 million. The which offers both steady, reliable those forthcoming hotels will be spective, this number is consider- these initiatives. Below, there is stock declined from its October high income and growth from its lead- outside the U.S., with about one- ably more than total world GDP in also analysis for the burgeoning of US$3.24 to a December low of ership in clean energy “might be fifth in Europe, the Middle East, or 2018. And in just the next five years, U.S. cannabis market, as well as a US$0.65. The advisory is holding for the best utility stock of all time,” Africa. The company has a 20 per some experts expect the amount of few medical innovations hitting a target of US$3.50, and will buy into according to Mr. Hutchinson. cent global market share of rooms cash injected into global infras- the market. - E.A. it when breaks above US$1.25. It under construction. Hilton gener- tructure to reach US$26 trillion, or expects an ultimate target of US$7- ates most of its business from more than the annual GDP of the to-US$8, as it expands into the Dow Theory Forecasts, 7412 licensing its name to franchises, U.S., Canada and Mexico com- The KonLin Letter, 5 Water Road, Japanese market for the treatment of Calumet Ave., Hammond, IN which requires a low asset base bined. Analyst Carl Delfeld says, Rocky Point, NY 11778 U.S.A., acne vulgaris - a long-term skin dis- 46324-2692, U.S.A., and capital investment. Hilton is “And that’s why our new recom- (631)-744-8536, US$95 a year. ease that occurs when hair follicles (800)-233-5922, US$289 a year. expected to report per-share prof- mendation is Largo Resources Ltd. www.konlin.com are clogged with dead skin cells and www.dowtheory.com its of US$0.76, up 38 per cent, on (LGO-TSX, $1.76; LGORF-OTC, oil from the skin - via Sato Pharma- revenue of US$2.2 billion, up six US$1.33), which produces an Using its focus on the pharma- ceuticals Co. Ltd. Hilton Worldwide Holdings per cent. Average estimated growth ingredient that turns ordinary steel ceutical industry, The KonLin Letter Inc. (HLT-NYSE, US$87.24) has for hotel, resort, and cruise stocks into ‘super steel’ and is playing an points to Novan Inc. (NOVN-NAS- built its company around selling its in the S&P 1500 Index is five per increasingly important role in elec- DAQ, US$0.90) as its Featured Stock Cabot Dividend Investor, c/o founder’s name and other brands cent for earnings per share and 14 trifying the grid.” Largo is a strate- of the Month. NOVN is a clinical- Cabot Heritage Corporation, that have come under its control, per cent for sales. gic mineral company focused on stage biotechnology company aim- 176 North Street, Salem, MA 01970 such as Hampton, DoubleTree, the production of vanadium flake ing to leverage nitric oxide’s natural U.S.A., (978)-745-5532. Introduc- Embassy Suites, and Waldorf Asto- hort takes, pro, con, at the Maracás Menchen Mine antiviral and immunomodulatory tory one-year rate: US$297. ria. Under an umbrella of about 15 maybe: “Buy a half” posi- located in Bahia State, Brazil. mechanisms of action to treat der- brands, Hilton now operates tion of Carvana Co. Headquartered in Toronto, Largo’s matological and oncovirus-mediat- Chief analyst Tom Hutchinson roughly 5,700 hotels and resorts in (CVNA-NYSE, US$62.98), stock has been on a bit of a roller- ed diseases (i.e. a virus that can suggests investors profit from the 113 countries. Hilton owns about Ssays Cabot Growth Investor. Car- coaster lately. Just a dollop of vana- cause cancer). Nitric oxide has “Great Global Infrastructure Cri- one per cent of these properties vana is revolutionizing the used dium added to steel doubles its become one of the most studied sis”. The American Society of Civil and manages about 12 per cent of car buying process, making it as strength and reduces its weight by molecules in human physiology. In Engineers reviews 15 infrastructure them; the rest are franchised easy, quick and low risk as possi- 30 per cent. About 80,000 tons of fact, the 1998 Nobel Prize-winning categories every four years and hotels. However, Hilton shares ble to buy a vehicle online. vanadium are produced per year, discovery triggered an eruption of issues an overall grade. The last aren’t cheap. At 31 times trailing Throw in relatively quick deliver- with China accounting for about research that now confirms its natu- was in 2017. The grade was a D+. earnings, the stock trades below its ies (next day in some markets) half of production followed by Rus- ral ability to prevent clotting, regu- The G-20’s Global Infrastructure five-year median of 38, yet carries a and it’s proven to be a hit - Car- sia, South Africa and then Brazil (all late inflammation, revitalize tissue, Hub estimates that a global invest- lofty premium to its industry medi- vana’s revenues have been kiting emerging markets). As vanadium kill invading microorganisms, and ment of US$94 trillion will need to an of 14. Still, Hilton is a “Buy” and higher at triple-digit rates for prices have gone up, so has Largo’s even eradicate cancer cells - making be invested over the next several a “Long-Term Buy” for the adviso- many quarters as it stampedes share price. During the past year, it an ideal form of dermatological decades. That’s trillion with a T. ry. Hilton focuses on the midscale, into a ton of new U.S. markets LGORF went from US$1.09 to a therapy. For example, molluscum Governments don’t have all those upscale, and luxury travel markets. (85 markets last December, up to high of US$3.39 on Nov. 5, 2018. contagiosum is a common, highly trillions of dollars lying around. The U.S. is Hilton’s biggest geo- 140 by year-end 2019). Since then it has come crashing contagious skin infection affecting The only way to possibly answer back to earth, trading at a mere roughly 6 million Americans annu- the need is with private money. DOCUMENTING PROGRESS AND GROWTH US$1.39 per share, or about 5.3 ally, with the greatest incidence in Governments will have to do some times trailing earnings. As the children between the ages of 1-to-14 investing of course but are also The Bowser Report, P.O. Box 5156, Williamsburg, VA, 23188, world’s lowest-cost producer of years old. There are no approved partnering with private companies U.S.A., (757)-877-5979, US$59 a year. www.thebowserreport.com vanadium, Largo seems underval- therapies for molluscum yet, with on certain projects as well. “Infras- ued right now at less than six times patients requiring painful physical tructure is becoming a hot invest- he advisory’s Company of the Month is ARC Document Solu- trailing earnings. Mr. Delfeld rec- procedures or over-the-counter ment for private funds to the extent tions Inc. (ARC-NYSE, US$2.45) which is given a nine-out-of- ommends buying only a small products and prescriptions. NOVN that it is almost becoming its own 10 score. ARC is a leading document-solutions company serv- position right now while he waits recently announced that results asset class. Limited partnerships, ing businesses of all types, with an emphasis on the nonresi- for first-quarter 2019 numbers to giant sovereign-wealth funds, mul- Tdential segment of the architecture, engineering and construction roll in. “I will become more aggres- tilateral and development-finance industries. The company helps customers reduce costs and increase sive as the stock develops an institutions are raising by some efficiency in the use of their documents. uptrend, or at prices below measurements trillions of dollars a ARC Document Solutions’ sales slowly grew year-over-year. US$1.30 a share. Either way, our HOTLINE year for infrastructure investments. Although revenue isn’t growing at a rapid rate, 2018 showed an target price is US$2 a share or 60 Amidst this great opportunity the upturn from the poor guidance initiated in 2015. Management noted per cent higher than its current question is where to invest,” Mr. pressure from implementation delays in key managed print services price,” the analyst concludes. The hotline number for Hutchinson states. In our last issue, contracts and lower demand for large-format printing. Since then, Investor’s Digest is 416- we included his top pick of the share price has dropped 77 per cent, while revenue per share has 869-2777 ext. 800. The hot- month, which he says proved itself slightly increased to US$8.91 per share. Global Investing, 1040 First Ave, line is intended to keep to be among the most worthy play- According to the advisory, the company’s high revenue per share suite 318, New York, NY 10022 readers abreast of informa- ers in the space - Brookfield Infras- and recent decrease in price per share show a clear undervaluation U.S.A., US$495 for one year, $888 tructure Partners LP (BIP.UN-TSX, relative to its competitors. Additionally, ARC dominates the docu- for two years. www.global-invest- tion in Investor’s Digest. It $55.39; BIP-NYSE, US$41.59). That ment solutions industry and has consistently high sales. Comparing ing.com will be updated regularly on said however, many of the divi- ARC’s revenue and net income to its competitors’ exemplifies just Fridays by 6 p.m. eastern dend paying defensive studs are how effective the company is in its niche. Its $400 million in revenue To editor, Vivian Lewis’ amaze- time. The hotline will inform trading at high historical valua- represents eight per cent of the total sales for the industry. ment, the local Irish-based bookie readers about the forth- tions. So it’s tough to buy a defen- ARC is beating the industry average for three main valuation met- chain Paddy Power Betfair PLC sive stock after a great year and rics (price-to-earnings, price-to-sales and price-to-cash flow) by a (PPB-LSE, £6,646; PDYPY-OTC, coming issue and, when near the 52-week high. The analyst long shot (by 35, 50 and 70 per cent respectively). Its price/cash flow US$44.05) has crashed by over five necessary, provide updates has been able to pluck rare value ratio is most impressive and rare for a company within the industry. per cent in one day. Apparently it on information in the Digest stocks that rise above the current With the drop in share price over the past four years, ARC sits near took the counterpart side of bets that might have been conundrum, such as Altria Group its all-time low and offers a great buying opportunity. As long as that Britain would leave the EU superseded by events. Inc. (MO-NYSE, US$56.18), AbbVie management continues to focus on new accounts and a strong bot- (during mid April) and now faces Inc. (ABBV-NYSE, US$77.98) and tom line, expect ARC to be trading back over US$3 per share. huge payouts. In other British Isles Enterprise Product Partners LP news, she reports that Glaxo- Issue 9 / 19 INVESTOR’S DIGEST May 10, 2019 / 195

WHAT THE MARKET LETTERS SAY

cludes. Meanwhile, the Aphria INFRASTRUCTURE MUTUAL FUND HIGHLIGHTED stock got torpedoed in Dec. 2018, in the wake of a devastating short- Bob Carlson’s Retirement Watch, P.O. Box 9009, Waldorf, MD 20604-9009, seller report from Quintessential LETTER (800)-552-1152, US$99 a year. www.retirementwatch.com Capital Management founder Gabriel Grego. He called the stock a “black hole”. Aphria reported OF THE ditor Bob Carlson notes that REITs are out- (WCMRX-MUTF, US$16.28). The managers of operating results that reveal a pacing the stock indexes, after introducing this fund own only a few stocks that they consider growing sea of red ink too. For the them to his portfolio in early 2017 through to be great companies with high and sustainable third quarter ending Feb. 28, 2019, WEEK Cohen & Steers Realty Shares Fund growth. They start by looking for companies with the company posted revenue of E(CSRSX-MUTF, US$66.99). It has returned 12.77 little or no debt, with high returns on capital. US$73.6 million, an increase of 240 Dow Theory Forecasts, 7412 per cent year-to-date (writing as of late March). He also likes global infrastructure stocks. He per cent from the previous quarter Calumet Ave., Hammond, IN Over 12 months, it returned 17.45 per cent. The top owns these stocks through the closed-end fund, and 617 per cent from 2018. 46324-2692, U.S.A., (800)- sectors in the fund were apartments (15 per cent), Cohen & Steers Infrastructure Fund Inc. (UTF- Sounds impressive, right? Well, the 233-5922, US$289 a year. health care (12 per cent), data centres (11 per cent), NYSE, US $23.98). It is up 20.37 per cent since the company still reported a net loss of www.dowtheory.com offices (10 per cent), and industrial buildings (eight turn of the year (till late March). US$108 million versus last year’s per cent). Top holdings were Welltower Inc. The discount to net asset value is down to 5.67 net income of US$12 million for andem Diabetes (WELL-NYSE, US$73.24) and UDR Inc. (UDR- per cent, while the six-month average is 7.01 per the same time period. The compa- Care Inc. (TNDM- NYSE, US$44.23), among others (45 in total). cent. The top-two sectors of this fund are electric ny’s profit margin in the quarter NASDAQ, US$54.41) Mr. Carlson adds that the year-to-date stock utilities (28 per cent) and midstream pipeline stood at -30.9 per cent. Mr. Persi- looks like it has the rally is global, and as such, he has benefitted from companies (12 per cent), with Enbridge Inc. nos calls it a “toxic investment” - Tbest insulin pump on the owning another mutual fund in WCM Focused (ENB-TSX, $49.79; ENB-NYSE, US$37.18) being one you should avoid. market, and that market International Growth Fund Investor Class one of his top picks. has begun a major growth wave as technological Investment Executive Newspaper, advancements are attract- 37 Front St. E. Suite 200, Toronto, ing many diabetics who SmithKline PLC (GSK-NYSE, accept this risk, he says to “buy” also doesn’t believe there’s a high ON M5E 1B3, 416-847-5100. are tired of sticking them- US$39.85; GSK-LSE, £1,540.80), as Shaw for gains and attractive divi- risk of a lasting rise in interest www.investmentexecutive.com selves with multiple injec- expected, won U.S. FDA approval dends. Calgary-based Shaw Com- rates. The fund declined 0.49 per tions per day. of its ViiV sub’s Dovato, a once- munications did much better in cent between January and March A pair of ETFs focused on U.S.- Tandem thinks just 28 daily two-drug tablet for HIV in first six months to Feb. 28. It earned so now may be a good time to based cannabis companies — one per cent of Type 1 diabetics adults. It contains dolutegravir and net income of $341 million, or jump in. fund actively managed, the other in the U.S. currently use any lamivudine. Ms. Lewis is also 66 cents a share. This was a passive — is set to begin trading on pump, but that could grow keeping tabs on Standard Life turnaround from a net loss of $64 NEO Exchange during mid April. to 50 per cent over time Aberdeen PLC (SLA-LSE, £277; million, or 13 cents a share, a year Mind Over Markets, C/O Investing Evolve Funds Group Inc. (about half of Tandem’s SLFPY-OTC, US$14.57) after Jef- earlier. Much higher cash flow con- Daily, 7600A Leesburg Pike, West announced it had filed its final users are new to the pump feries Financial chopped its target firmed Shaw’s higher profits. In the Building, Suite 300, Falls Church, prospectus to launch the Evolve market, with the others price from £488 to £361. Another first half of fiscal 2019, the compa- VA 22043 U.S.A., (800) 832-2330. U.S. Marijuana ETF, an actively coming from competing fan is Goldman Sachs which has a ny generated cash flow of $883 mil- www.investingdaily.com/mind- managed fund investing in the U.S. pumps). The company has “buy” rating too, but a lower target lion. This was up sharply from cash over-markets cannabis industry. Horizons ETFs penetrated just a fraction of price of only £244. “Given that the flow of $318 million, a year earlier. Management (Canada) Inc. issued its potential market, but closed-end fund group gives busi- Both Shaw’s Wireless and Wireline Analyst John Persinos takes a a release announcing it had filed a even that has caused rev- ness to banks, you can take all segments grew in the second quar- look at two pot stocks, telling final prospectus for the Horizons enues to explode (growth of these tips with a grain of salt,” she ter of fiscal 2019. The Wireless seg- readers whether or not they U.S. Marijuana Index ETF. Evolve’s 60 per cent, 71 per cent and concludes. Looking into the oil ment added a net 65,000 postpaid should invest in MedMen Enter- ETF will trade under the ticker 89 per cent over the past patches, BP PLC (BP-LSE, £572; subscribers. This brought the Free- prises Inc. (MMEN-CSE, $4.03; USMJ and invest in equity securi- three quarters). Tandem BP-NYSE, US$44.39) was given a dom Mobile customer base to MMNFF-OTC, US$3.02) or Aphria ties of companies with business has pulled back sharply, but new target price of £615 by more than 1.5 million by the end of Inc. (APHA-TSX, $10.25; APHA- activities in the U.S. recreational held its 50-day line. Deutsche Bank and one of £610 by February. Another positive devel- NYSE, US$7.65). Exemplifying the and/or medical cannabis industry. Another little-known Jefferies Financial. The latter also opment was higher revenue from mainstreaming of Mary Jane is In its release, Evolve said “active name that the advisory is lowered its target price for Royal customers. Shaw’s average rev- cannabis dispensary operator management is essential in the enthused about is InVitae Dutch Shell PLC ADR (RDSA-LSE, enue (billing) per unit advanced by MedMen. The company has great- burgeoning cannabis space given Corp. (NVTA-NYSE, £2,481.50; RDS.A-NYSE, US$64.20) 7.5 per cent to $41.34 a month. At ly expanded beyond its initial the ongoing regulatory environ- US$22.86). Thanks to years to £2950 from £3360 but kept it at the same time, Mr. Johnson says markets of California, Nevada, ment and the significant volatility of heavy investments that “buy”. Dutch Antillean Schlum- going up against the Big Three and New York. Upon the close of of the cannabis sector.” Horizons’ put all available genetic berger Ltd. (SCL-LSE, £46.30; SLB- would prove costly as it needs to various pending transactions and ETF will trade under the ticker information onto one plat- NYSE, US$45.56) at under US$46 invest in its business (i.e. market- acquisitions, MedMen will have HMUS (and HMUS.U in U.S. dollar form, the firm is now bring- yields 4.38 per cent. It expects 2019 ing and infrastructure). On Feb. 28, 32 operational dispensaries, and units) and provide unitholders ing genetic testing to the capital expenses to fall in North Shaw held cash of $1.288 billion. licenses for 19 factories across 12 with exposure to an index of U.S.- masses by driving down American upstream by about 10 Subtract total debt of $5.346 billion states. MedMen has 16 new loca- based companies that serve as pro- costs (down 24 per cent last per cent hurting its production and its net debt stands at $4.058 tions scheduled to open in 2019. ducers, developers or suppliers of year alone). The days of arm. But SLB says exploration and billion. This was 2.2 times the cash All the while normalization of cannabis or hemp-based products. genetic tests done on a production will grow in the North flow of $1.804 billion over the three marijuana continues apace. In Unlike Canada, the U.S. hasn’t case-by-case basis and cost- Sea, the Middle East, Russia, previous quarters. This, he says, is March 2019, the U.S. House legalized recreational or medical ing thousands are being Africa, and Latin America. “As oil acceptable as the company gener- Financial Services Committee vot- cannabis, although a number of replaced by more common- prices rise, this will boost drilling. ates utility-like predictable and sta- ed to pass legislation that would individual states have. Both Evolve place testing (much of it in Also it does plenty of share buy- ble cash flow. It expects free cash make it easier for marijuana busi- and Horizons expressed optimism oncology, but the firm is backs. I have owned SLB forever flow to hit $500 million this year. In nesses to access banking services that the U.S. cannabis industry will moving into reproductive and if the rating improves, I will addition, Shaw can sell its sub- - though it is still federally illegal in continue to grow. “We believe health in a big way) for just buy more,” Ms. Lewis claims. sidiary asset, Corus Entertainment the U.S. Admittedly, operating there are significant near-term cat- hundreds of dollars. Inc. (CJR.B-TSX, $7.70) if the right results for the first and second alysts that will cause the U.S. mar- Three years ago, Invi- offer comes along. In fiscal 2019, quarters of fiscal 2019 have shown ket to expand rapidly,” Raj Lala, tae’s platform processed The Investment Reporter, MPL Shaw expects that its consolidated huge revenue growth, also with president and CEO of Evolve, said 59,000 tests, but that grew Communications, 133 Richmond income before restructuring costs net losses of -US$2.77 per share. in a statement. “There are several to 149,000 in 2017, 303,000 St. W., Toronto, ON M5H 3M8, and amortization will grow by However, as it reaps synergies laws currently making their way last year, and management (800) 804-8846, $337 a year. between four and six per cent. from vertical integration, the com- through Congress that would is looking for 500,000 tests www.investmentreporter.com pany should soon start posting expand legalization of recreational (likely conservative) this hort takes, pro, con, profits. MedMen posted prelimi- cannabis and give those compa- year, with revenue growth One of editor Marc Johnson’s maybe: Bob Carlson’s nary results for its fiscal 2019 third nies better access to banking and around 50 per cent both this Key Stock is Shaw Communica- Retirement Watch has a quarter that are encouraging. capital.” In a statement, Steve year and in 2020. tions Inc. (SJR.B-TSX, $27.29; SJR- recommendation that is Across the company’s operations Hawkins, president and CEO of Both stocks are very NYSE, US$20.40) - which did better Stied to U.S. infrastructure spend- in California, Nevada, New York, Horizons ETFs, said “As the U.S. volatile and NVTA is a bit in the first half of fiscal 2019 (peri- ing. It is the Wasatch-Hoisington Arizona and Illinois, revenue continues to further liberalize its thinly traded, too. But od ending Feb. 2019). But he says it U.S. Treasury Fund (WHOSX- reached US$36.6 million, repre- marijuana regulations, we antici- chief analyst Michael Cin- may look to battle the entrenched MUTF, US$16.10). The fund owns senting a 22 per cent quarter- pate that more investors will be tolo loves the potential of Big Three wireless service primarily long-term U.S. Treasury over-quarter increase over its fis- looking to invest in companies each—they’re on his watch providers in Telus Corp., Rogers bonds. The fund managers there cal 2019 second quarter. “Med- with significant business opera- list, and you could start Communications Inc. and BCE believe the economy is weaker Men just might realize its dream tions in the U.S. market, and with a half-sized position Inc. A good strong fight with the big than many realize. The fund will of becoming the Whole Foods of HMUS will provide a diversified until you see a good setup telecom players provides opportu- lose value if interest rates pot-buying. It’s a compelling and liquid way to gain that expo- for more. nity but also raises risk. If you can increase. Mr. Carlson agrees, and growth story,” Mr. Persinos con- sure in one ETF.” Issue 9 / 19 INVESTOR’S DIGEST May 10, 2019 / INDX1

12 - MONTH COMPANIES INDEX (MAY 2018 - APRIL 2019)

Canada Goose Holdings 124, 298, 519 Five Below 281 InfuSystem Holdings 306 .R. Horton 131, 218, 326, 483 This index covers the previous 12-month period to the Canadian Apartment Properties REIT 446 D Flex 306 ING Groep NV 281 Dalradian Resources 302 Canadian Imperial Bank of Commerce 3, Flexible Solutions International 43, 106 Innergex Renewable Energy 126 current date. Darden Restaurants 325, 457 65, 154, 276, 283, 287 Flower One Holdings 55 Inovalis REIT 270 Bold-faced page numbers refer to 2019 issues, while all David’s Tea 305 32 81 84 Fluor 175 InPlay Oil 76, 168, 430 Canadian National Railway , , , Deere 41 other page numbers refer to issues published in 2018. 101 Foot Locker 149, 502 Insignia Systems 150 , 347, 503 Deere & Co. 261 63 Ford Motor 219, 458 Intact Financial 103 Canadian Natural Resources , 114, 131, Delek Drilling 439 Axion Ventures 101, 232, 272, 320 Fortescue Metals Group 243 Integra Resources 168 3M 105, 483 158, 202, 334, 378, 466 Delek US Holdings 150, 262, 306 Axis Auto Finance 190, 417 106 Fortis 121, 174, 360, 476, 495 Intel 18, 86, 130, 175, 415 Canadian Pacific Railway , 158, 290, Delphi Energy 170, 212, 319 Axon Enterprise 174, 211, 263 340, 455, 466, 479, 495 Fortuna Silver Mines 147, 198, 344 Interfor 128, 133, 475, 493 Azure Power Global 239, 282, 482 Delphi Technologies 130 58.com 218 Canadian REIT 175 Delta 9 Cannabis 286 Fossil Group 223 Interpace Diagnostics Group 395 138 Canadian Tire 121, 127, 229 Delta Air Lines 19, 483, 502 Founders Advantage Capital 210, 384, 448 InterRent REIT , 490 97 Canadian Utilities 215, 343 Denison Mines 411, 453 Franco-Nevada 495 Intertape Polymer Group B.O.S. Better Online Solutions 86, 106, 174 Canadian Western Bank 165, 287 Franklin Resources 458 Intuit 173, 457 A&W Revenue Royalties Income Fund 42 B2Gold 480 Descartes Systems Group 12, 280, 448 ABB 175 Canamex Gold 111 Detour Gold 145, 212, 321 Freehold Royalties 142, 257, 362 INV Metals 243 Badger Daylighting 43, 96, 120, 187, 188, 86 AbbVie 194 Canfor 133, 142, 517 Deutsche Bank AG 18, 307 Freeport-McMoRan 237, 349 Invesco , 481 256, 347, 478 168 62 ABcann Global 228, 286 Canfor Pulp Products 343 Devon Energy 62, 387 Freshii 124, , 521 Invesco DB Oil Fund Baidu 131, 218, 306, 326, 438, 483 6 Absolute Software 102, 150, 364 Cannabis Wheaton Income 235 DHX Media 124, 433 Frontera Energy 387 Invesque , 138, 270, 402 Ball 481 CannaRoyalty 147, 300, 408 FSD Pharma 155, 442 InZinc Mining 282 Acasti Pharma 125, 300 Balmoral Resources 189 Diamond Estates Wines & Spirits 141, 235, Accenture PLC 107 Cannex Capital Holdings 318 299, 320, 404 Full House Resourts 527 iPath Bloomberg Copper Subindex Total Banco Santander S.A. 42 87 35 Acerus Pharmaceuticals 81, 170, 340 Canntab Therapeutics 155, 442 Diebold Nixdorf 415 Future Farm Technologies Return ETN Bank Montreal 65 15 168 Acreage Holdings 16 CannTrust Holdings 53, 66, 272, 519 DIRTT Environmental Solutions 97, 165, IPL Plastics , , 343 Bank of America 62, 151, 458 62 131 Activision Blizzard 237, 417 Canopy Growth 18, 66, 128, 155, 210, 517 iQiyi , , 211, 326, 395, 438 Bank of Montreal 147, 276, 283, 287, 286, 309, 317, 414 4S PLC 370 iRhythm Technologies 129, 149 Adobe Systems 173, 305 323, 405 Discover Financial Services 307 G Advance Auto Parts 129, 261, 413, 525 Canopy Rivers 56, 474 Discovery Communications 481 Galaxy Gaming 62, 131, 131, 262 Iron Bridge Resources 170, 259, 450 Bank of New York Mellon 85 CanWel Building Materials Group 146, Gamehost 164, 257, 386 iShares 20+ Year Treasury Bond ETF 373 Advanced Disposal Services 525 Bank of Nova Scotia 12, 42, 43, 65, 142, Distinct Infrastructure Group 279, 448 Advantage Oil & Gas 209, 366, 387 146, 433 Divestco 177 Gartner 219 iShares Brazil ETF 482 154, 176, 287, 409, 459, 495, 526 Capital Power 125, 497 GDI Integrated Facility Services 124, 146 iShares Canadian Short-Term Bond Adventus Zinc 344 18 DocuSign 151 Bank of NY Mellon Capstone Mining 190 GDS Holdings 307 Index ETF 110 AECOM 175 131 Dollar General 263, 413 Baozun Cardinal Resources 436 Gear Energy 81, 124, 171, 231, 340 iShares Core Balanced ETF 174 Aecon Group 254, 367, 422, 483 58 Dollar Tree 17, 173, 263, 325 Barkerville Gold Mines , 391 Cardiome Pharma 189 General Electric 42, 107, 221, 327, 399, 439 iShares Core Canadian Universe Bond Aehr Test Systems 174 Barrick Gold 18, 59, 82, 120, 167, 213, Dollarama 12, 184, 301 CareTrust REIT 61 General Mills 193 Index ETF 175 AES 262, 395 285, 527 Dominion Energy 151, 307, 438 Cargojet 145, 165, 252, 389, 520 General Motors 61, 219, 370 iShares Core MSCI EAFE ETF 151 Aetna 151, 175 Bausch Health 437 Dominion Energy Midstream Partners LP Carvana 263 Genworth MI Canada 96, 492 iShares Core MSCI Emerging Markets Aflac 17, 219, 458 Baytex Energy 38, 301, 388 151, 438 Cascades 78 Geodrill 32, 388 Index ETF 151 Ag Growth International 99, 195, 258 BCE 125, 150, 451, 497 Domtar 61, 101 Catamaran 151 George Weston 19, 140, 144, 410 iShares Core S&P 500 Index ETF 439 AGL Energy 283 Beazer Homes USA 457 Double Line Floating Rate Class 1 Fund 63 Caterpillar 483 Gibson Energy 212 iShares Core S&P 500 Index ETF CAD- Agnico Eagle Mines 285, 409 Becton Dickinson & Co. 194 DoubleLine Emerging Markets Fixed Income CBOE Volatility Index 175 144 Hedged 110 AGT Food and Ingredients 57 Bed Bath & Beyond 307 Fund Class I 131 Gildan Activewear , 147, 499 CCA Industries 174, 194 iShares Core S&P Small-Cap ETF 218 Aimia 389 Beleave 286 DoubleLine Emerging Markets Fixed Income Global Water Resources 164 146 35 iShares Core U.S. Aggregate Bond ETF 363 Air Canada 307, 522 Bellatrix Exploration 158, 164, 516 CCL Industries 144, Fund Class N 131 Global X Funds Copper Miners ETF 103 iShares Emerging Markets Fund 438, 502 Air Products & Chemicals 193 Bellus Health 521 Celestica , 346, 475 DoubleLine Floating Rate Fund 86 Global X Lithium & Battery Tech ETF 526 AirBoss of America 257, 428 Celgene 527 DowDuPont 43 Global X Lithium Battery ETF 63 iShares Floating Rate Index ETF 414 Bengal Energy 302 iShares Minimum Volatility Emerging Markets Akita Drilling 455, 498 Best Buy Co. 149, 327, 413 Cemex SAB de CV 174, 327 Dream Industrial REIT 226 Global X Robotics & Artificial Akumin 408, 417 Cemtrex 86, 219, 238 Dream Unlimited 388 Intelligence ETF 526 43 BeWhere Holdings 274 iShares MSCI Emerging Markets Index ETF Alacer Gold 79, 213 BHP Billiton PLC 243 Cenovus Energy 127, 188, 472 Drone Delivery Canada 197, 505 Gluskin Sheff + Associates 452 307, 485 Alamos Gold 168 Big Lots 263 Centene 41, 151 Duke Energy 131, 174 goeasy 37, 228, 363, 473 iShares MSCI Global Metals & Mining Alaris Royalty 45, 145, 167, 187, 497 Bilibili Inc. ADR 395 Centerra Gold 84, 213 Dundee Precious Metals 33, 122 Goldcorp 63, 81, 125, 214, 285 Producers ETF 35 Alaska Air Group 17, 19 BioSig Technologies 239 Central Garden and Pet 17 Dunkin’ Brands Group 129 Golden Dragon ETF 438 iShares Russell 2000 ETF 486 Alcanna 417, 524 Birchcliff Energy 124, 256 Centric Health 190, 433 Dynacor Gold Mines 283 Golden Predator Mining 287 iShares S&P GSCI Commodity-Indexed Trust Alcoa 241 Bird Construction 13, 164, 365, 522 CenturyLink 371 Dynasil Corp. of America 62 Golden Star Resources 213 111 Aldershot Resources 419 Bird River Resources 177 Cervus Equipment 255, 518 Goldman Sachs Group 62, 217, 283, 307 iShares S&P/TSX 60 Index ETF 109, 151 Aleafia Health 9, 298, 408 Black Diamond Group 233, 347, 454 CES Energy Solutions 102, 147, 299 Goodfood Market 125 iShares S&P/TSX Canadian Preferred Share Alerian MLP ETF 238 BlackBerry 9, 80, 169, 243, 323, 399, CF Industries Holdings 307 agle Point Credit 439 Gorman-Rupp 415 E Index ETF 175 Alexion Pharmaceuticals 150 452, 505 CGI Group 60, 101, 151, 345, 422, 485 Eastmain Resources 274 GoverMedia Plus Canada 153 iShares S&P/TSX Capped Energy Index ETF Algold Resources 365 Blackline Safety 98, 155, 185, 316, 453 Chakana Copper 134 Eastman Chemical 133 Gran Tierra Energy 232 63, 110, 487 Algonquin Power & Utilities 15, 140, 238, 439 BlackPearl Resources 303, 478 Charlotte’s Web Holdings 9 Echelon Financial Holdings 124, 387, 519 Grande West Transportation Group 8, 184, iShares S&P/TSX Capped Financials Alibaba Group Holding 150, 150, 218, 306, BlackRock 85 Chartwell Retirement Residences 138 ECN Capital 96, 252, 282, 455 272, 299, 407 Index ETF 110 326, 438 Blackstone Group LP 19, 62, 87 Chemours 218, 351 Ecopetrol SA 414, 502 Gratomic 373 iShares S&P/TSX Global Base Metals Alimentation Couche-Tard 13, 23, 171, Bloom Energy 393 Chemtrade Logistics Income Fund 50, Edison International 283 Great Bear Resources 134 Index ETF 35 394, 432 Blueknight Energy Partners LP 370 314, 358 Eguana Technologies 370, 472 Green Organic Dutchman Holdings 18 iShares S&P/TSX Global Gold Index ETF Alio Gold 168, 169, 300, 477 Bluestone Resources 103, 233 Chesapeake Energy 458 Eldorado Gold 85, 185 Green Thumb Industries 478 110, 255, 486 Allbanc Split Corp. II Class A BMO Aggregate Bond Index ETF 110 Chesswood Group 172 Electronic Arts 237 GreenSpace Brands 100, 125, 155, 388, 417 iShares U.S. Oil & Gas Exploration & Capital Shares 67 BMO Covered Call Canadian Cheung Kong Infrastructure Holdings 283 Element Fleet Management 169, 430 GrowMax 280 Production ETF 62 Allbanc Split Corp. II Class B Preferred Banks ETF 363 Chipotle Mexican Grill 130, 223 Emblem 209, 286, 518 GrubHub 105, 263, 349 iShares US Aerospace and Defense ETF 43 Shares Series 2 67 BMO Covered Call Utilities ETF 175 Choice Properties REIT 19, 175 Emera 122, 321 GSE Systems 18, 174 Israeli Mobileye BV 130 Allegiant Gold 82, 324 BMO Dow Jones Industrial Average CI Financial 231 Emerita Resources 191 GT Gold 56, 168, 498 Iteris 62, 106, 238 Allstate 194, 502 Hedged-to-CAD Index ETF 99 Ciena 63 Emmis Communications 326 Guyana Goldfields 417, 495 Ivanhoe Mines 452 Alphabet 18, 106, 129, 130, 135, 195, 217, BMO Equal Weight Banks Cigna 151 Empire Co. 33, 164, 165, 361, 452 GW Pharmaceuticals 300, 325 219, 239, 243, 349, 350, 417 Index ETF 110, 395 Cincinnati Financial 458 Enbridge 36, 124, 140, 150, 320, 351, GW Pharmaceuticals PLC 66, 85 AltaGas 52, 145, 213, 275, 302, 410, BMO Equal Weight U.S. Banks Hedged-to- Cineplex 32, 145, 385 439, 503 415, 482 CAD ETF 487 Cipher Pharmaceuticals 215, 384 Enbridge Energy Management LLC 439 Jadestone Energy 211 AltaGas Canada 37 BMO Equal Weight Utilities Index ETF 110, Cisco Systems 62, 393 Enbridge Energy Partners LP 439 H&R Block 305, 437 Jaguar Mining 145, 155, 241 Altigen Communications 131 373 CIT Group 195, 239, 326, 458 Enbridge Income Fund Holdings 439 H2O Innovation 14, 124, 448 Jamieson Wellness 144 Altria Group 150 BMO India Equity Index ETF 133 Citigroup 18 EnCana 63, 122, 228, 387, 453 Hamilton Thorne 260 Japan Gold 453 Altura Energy 57, 256, 392 BMO Junior Oil INdex ETF 63 Citizens Financial Group 307 Endeavour Silver 57, 436, 198 Hanover Insurance Group 175 JD.com 42, 131, 218 Altus Group 145 BMO MSCI Emerging Markets Index ETF Clean TeQ Holding 219 Enercare 395 Hardwoods Distribution 164, 166, 367, 522 JinkoSolar Holding Co. 281 Alvopetro Energy 278, 452 133 Clearwater Seafoods 145, 169, 365 EnerDynamic Hybrid Technologies 370 Harley-Davidson 325 John Bean 149 Amarillo Gold 386 BMO S&P 500 ETF un-hedged Clydesdale & Yorkshire Bank PLC 218 Enerflex 391 Harris 319 Johnson & Johnson 150, 281, 459, 481 Amazon.com 42, 106, 130, 135, 151, 194, Canadian Dollar 110 Cobalt 27 Capital 130, 219 Energean Oil & Gas PLC 306 Hasbro 129, 149 Journey Energy 364, 496 195, 243, 263, 306, 327, 349, 350, 371, BMO S&P/TSX Capped Composite Coca-Cola 129, 129, 243, 414 Energen 238 HCP REIT 61 JP Morgan Alerian MLP ETF 42 417, 459, 463, 485 Index ETF 110 Coeur Mining 369, 481 Energold Drilling 109, 241 Hecla Mining 349 JP Morgan Chase & Co. 18, 307 American Midstream Partners LP 351, 370 BMO S&P/TSX Equal Weight Banks Cogeco 145, 345 Energy Fuels 63 Hemp 87 Just Energy Group 120, 127, 361 American Outdoor Brands 174 Index ETF 154 Cogeco Communications 498 Energy Transfer Equity LP 415 Heroux-Devtek 99, 520 American WaterWorks Co. 194 BMO S&P/TSX Equal Weight Global Gold Cognizant Technology Solutions 218, 351, Energy Transfer Partners LP 370, 415 HEXO Cannabis 66 Americas Silver 171 Index ETF 255 482 Enerplus 114, 235, 378, 510 Hi-Crush Partners LP 61, 369 K-Bro Linen 318, 518 Amplify Transformational Data BMO S&P/TSX Global Base Metals Cohen & Steers Infrastructure Fund 63 Ensign Energy Services 13 High Liner Foods 123, 144, 215, 391, 417, K92 Mining 22, 199, 320 Sharing ETF 526 Hedged-to-CAD Index ETF 111 Colfax 393 Entergy 218 449, 520 Kansas City Southern Railway 19, 217, 394 Anaconda Mining 172 BMO S&P/TSX Global Equal Weight Global Colliers International Group 126, 229, 521 Enterprise Products Partners LP 131, 131, Hiku Brands Co. 142, 303 Kellogg 237, 501 Andeavor 351 Base Metals Hedged-to-CAD Index Comcast 18, 218, 283, 327, 417, 459, 482 415 Hill-Rom Holdings 86 Kelt Exploration 256, 406 Andrew Peller 52, 277 ETF 35 Comerica 195, 239 EnWave 412 Hilton Worldwide Holdings 175 Keurig Dr. Pepper 349 Anglo American PLC 243 BNK Petroleum 345 Command Security 174, 238, 439 EOG Resources 62 HIVE Blockchain Technologies 171, 243, Keyera 114, 128, 277 AngloGold Ashanti 42, 151 Boardwalk REIT 182, 258 Commerce Resources 353 Equinox Gold 56 257, 346, 456 Killam Apartment REIT 314, 446 Anthem 151, 173 Boeing 151, 173, 319 Commercial Metals 218, 305 Equitable Group 192 HollyFrontier 262, 502 Kinaxis 43, 131, 143, 523 APA Group 283 Bombardier 37, 127, 189, 253, 319, 323, Computer Modelling Group 120, 259 Ero Copper 141, 231, 404, 429 Hollysys Automation Technologies 439 Kinder Morgan 86, 150, 219, 283 Aphria 18, 59, 66, 208, 286, 309, 480 422, 502 Cona Resources 142 Eros International PLC 195 Home Capital Group 120 Kinder Morgan Canada 155, 219, 277, 409 Apollo Global Management LLC 62, 87 Bonavista Energy 123, 387 Condor Petroleum 390 Espial Group 126, 253, 367, 494 Home Depot 41, 130, 194 Kinross Gold 126, 188, 451 Apple 17, 41, 89, 106, 153, 195, 218, Bonterra Energy 81, 164, 494 Conifex Timber 258 Essential Energy Services 58, 368, 496 Horizon North Logistics 164, 168, 317, Kirkland Lake Gold 22, 36, 121, 236, 219, 237, 243, 263, 267, 285, 329, 374, Bookfield Asset Management 67, 124 ConocoPhillips 62, 262, 369 ETFMG Alternative Harvest ETF 194, 459 450, 492 307, 493 399, 458 Booking Holdings 42 Consolidated Edison 219 Evertz Technolgies 432 Horizons Marijuana Life Sciences Index ETF KLA-Tencor 415 Applied Materials 415 Boralex 8, 145, 364 Constellation Brands 18, 85, 194, 394, 414 Evertz Technologies 37, 168 65, 194, 309 Klondex Mines 170 ARC Resources 78, 126, 230, 296 Boston Beer 149 Constellation Software 57, 106, 214, 323, Excellon Resources 76, 165, 241, 434 Horizons S&P/TSX Capped Energy KLX Energy Services Holdings 218 Argonaut Gold 123 Boston Pizza Royalties Income Fund 490 492 Exchange Income 114, 131, 341, 516 Index ETF 63 Kneat.com 82 ARHT Media 66 Boston Properties 105 Contact Gold 474 Exco Technologies 77, 167 Horizons US Dollar Currency ETF 151 Knight Therapeutics 59, 234, 455 Aritzia 346 Boyd Group Income Fund 358 Continental Gold 307 EXFO 57, 479 HudBay Minerals 408 Knight-Swift Transportation Holdings 218, Arizona Mining 192, 282, 307 BP PLC 239, 350 Cooper Cos. 41 Express Scripts Holding Co. 151 Hudson’s Bay 191, 275 326, 483 Assure Holdings 415 Brick Brewing Co. 14, 208, 272, 411 Corby Spirit and Wine 147, 272, 322, 417 Extendicare 145, 174, 389 Humana 129, 525 Koss 79, 86 AT&T 42, 107, 218, 327, 371 Bristol-Myers Squibb 61 Corning 194 Exterran 369 Husky Energy 39, 76, 144, 345, 452 KP Tissue 384 ATAC Resources 134, 285 Broadcom 175, 267 Correvio Pharma 58, 389, 477 Exxon Mobil 130, 350, 459 Huya 371 Kraft Heinz 62 Athabasca Oil 169, 256, 499 Broadway Financial Services 131 Cortex Business Solutions 13, 40, 477 Hydro One 125, 167, 215, 266, 346, 434 Kraken Robotics 59, 474 Atico Mining 212 Brookfield Asset Management 96, 232, Corus Entertainment 174, 184, 276 Hydropothecary 186, 321 Kroger 18, 325, 437 Atlantic Gold 22, 145, 145, 212, 344 365, 454 Corvus Gold 257 Facebook 42, 106, 130, 175, 195, 350, Hydrotherapy 414 Atlantica Yield PLC 238 Brookfield Infrastructure Partners LP 107, Cosan 174 Aurinia Pharmaceuticals 348, 516 174, 301, 395, 527 Costco Wholesale 18, 481 370, 417, 485, 501 L Brands 193 Aurion Resources 134 Brookfield Renewable Partners LP 238 Coty 393 Fairfax Financial Holdings 96, 340 Iamgold 79, 276 Lam Research 131, 415 Aurora Cannabis 18, 66, 78, 211, 286, 309, BRP 36, 42, 168, 258, 408 CPS Technologies 62 Falco Resources 303 iAnthus Capital Holdings 14, 57, 405, 419, Lantronix 86, 439 360, 414, 441, 451 BSM Technologies 40 Crescent Point Energy 208, 434 FedEx 41, 62, 305 443 Laurentian Bank of Canada 13, 99, 287 Auryn Resources 214 BSR REIT 490 Crew Energy 39, 121 Fibria Celulose SA 150 IBM 42, 283 Leagold Mining 59 AutoCanada 390 BTB REIT 226 CRH Medical 164, 169, 230, 362 Fidelity Overseas Fund 218 IHS Markit 193 Lear 394 Autodesk 219, 393 BTL Group 243 Crius Energy Trust 94 Fiera Capital 184 Ikkuma Resources 32, 273, 392 Leatt 43, 502 AutoHome 19, 263 Buckeye Partners LP 131, 415 Crombie REIT 226, 402 Finning International 76, 252 Imaflex 8, 216, 404 LendingTree 175 Automatic Data Processing 219 Cronos Group 18, 34, 42, 66, 150, 168, Firan Technology Group 120, 127, 208, Immunovaccine 233 Leon’s Furniture 364, 520 Automotive Properties REIT 6, 182 286, 412, 458 342, 478 Impact Silver 2 Leucrotta Exploration 210, 246, 378, 510 AutoZone 17 Cabot Oil & Gas 237, 387 Crown Capital Partners 148, 321 First Capital Realty 348, 516 Imperial Metals 166 LexinFintech Holdings 174 Auxly Cannabis Group 54 CAE 120, 121, 150, 296, 516 CT REIT 94 First Majestic Silver 246 Imperial Oil 347 Liberated Syndication 395 AvalonBay Communities 501 Calfrac Well Services 300 CubeSmart 149 First Quantum Minerals 101, 243, 307 IMV 276, 448 LightPath Technologies 351 Avante Logixx 143, 254, 428 Calian Group 278, 516 Cummins 219 First Solar 281 Indigo Books & Music 155, 302 Linamar 169, 453 Aveda Transportation & Energy Cameco 63, 100, 307, 344, 439, 450 Currency Exchange International 166, 279, First Trust Nasdaq Clean Edge Smart GRID Indigo Books and Music 97, 428, 496 Liquor Stores N.A. 155, 230 Services 209 Camping World Holdings 149 302, 340, 435 Infrastructure Index 526 Indiva 388 Lithium Americas 499 Avista 266 Canacol Energy 140, 147, 316 CVS Health 151, 167, 175, 307 First Trust Natural Gas ETF 387 Information Services 104 Loblaw Cos. 8, 19, 366 INDX2 / May 10, 2019 INVESTOR’S DIGEST Issue 9 / 19

Lockheed Martin 62, 194 Noble Energy 306, 307, 439 Protech Home Medical 121 Siyata Mobile 233, 410 TAL Education Group ADR 351 Vanguard Canadian Aggregate Bond Lowe’s Cos. 130 Nokia 61, 327 Prudential Financial 502 Skechers USA 175 Tamarack Valley Energy 114, 185, 432 Index ETF 110 LRAD 43, 414, 483 Nokia Oyj 87 Pulse Oil 32 Skeena Resources 134 Target 18, 327 Vanguard Conservative Portfolio ETF 407, Lululemon Athletica 106, 413 Norbord 232 Pulse Seismic 80, 140, 360, 497 Sky PLC 218 TCF Financial 105 519 Lumina Gold 243 Noront Resources 297 PulteGroup 371, 502 Sleep Country Canada Holdings 363 Teck Resources 11, 125, 210, 433 Vanguard Dividend Appreciation ETF 151 Lundin Gold 243 North American Construction Group 146, Pure Gold Mining 453 SmartCentres REIT 94, 402 Tecsys 127, 169, 345, 435 Vanguard Growth Portfolio ETF 407, 519 Lundin Mining 169, 278, 432 234, 431 Pure Multi-Family REIT 182 Smith-Midland 62 Telefonaktiebolaget LM Ericsson 87 Vanguard Health Care ETF 371 North American Energy Partners 155 Pure Storage 525 SNC-Lavalin Group 144, 169, 228, 351, Telefonica SA 327 Vanguard High Dividend Yield ETF 503 North West Co. 76, 167, 169, 296, 434 Purpose Marijuana Opportunities Fund 55 366, 473 Telus 122, 128, 150, 362 Vanguard International Growth 218 Macro Enterprises 155, 213, 298, 384, 410 Northland Power 101, 123, 439 Purpose Premium Yield Fund 55 Sociedad Quimica y Minera de Chile 174, Tencent Holdings 130, 150, 370, 459 Vanguard Short-Term Bond Index ETF 414 Macy’s 307, 327, 502 Northrop Grumman 62 239 Terra Firma Capital 189, 409 Vanguard Strategic Small-Cap Equity 218 Magna International 238, 370, 394, 435 Northview Apartment REIT 138 Socket Mobile 62 TerraForm Power 238, 327 Vanguard Total Bond Market 459 Mainstreet Equity 35, 363 Nouveau Monde Graphite 517 Qualcomm 267 Solar Alliance Energy 370 Tervita 385 Vanguard Treasury Money Market 131 Major Drilling Group International 298 Nova Leap Health 11 Quanta Services 371 SolGold PLC 243 Tesco PLC 459 Vanguard Treasury Money Market Fund 86 MamaMancini’s Holdings 526 Nova Life Style 86 Quantum Minerals 131 Source Energy Services 275, 474 Tesla 130, 219, 243, 397, 438, 457, 485 Vanguard U.S. Total Market Index ETF 363 Mandalay Resources 345 Nucor 502 Quarterhill 391 South32 282 Tetra Tech 175 Vecima Networks 453 Manhattan Bridge Capital 106, 306 Nutrien 54, 172, 174, 234, 239, 367, 496 Quebecor 171, 238 Southcross Energy Partners LP 351, 370 Teva Pharmaceuticals Industries 106 Vectren 218 Manulife Financial 143, 175, 235, 343 NuVista Energy 120, 135, 158, 202, 334, 431 Quest Diagnostics 129 Texas Roadhouse 123, 149 Velocity Minerals 134 Southwest Airlines 86, 151 Verizon 343 Maple Leaf Foods 10 Nvidia 130, 153 Questor Technology 56, 188, 277, 360, TFI International 13, 122, 184 Southwest Gas Holdings 527 Verizon Communications 86, 438 Marathon Petroleum 18, 86, 351, 483 503, 521 The BMO Equal Weight Banks SPDR Communication Services Select Index ETF 486 Vermilion Energy 12, 135, 187, 214, 430, Maricann Group 286 Quorum Information Technologies 38 Sector Fund 417, 527 The Gap 393 510 Markel 129, 243 ObsEva SA 305 SPDR Consumer Descretionary Select The Green Organic Dutchman Holdings 66 VersaBank 143, 279, 404, 526 Marquee Energy 213, 408 Obsidian Energy 58, 164, 278, 394, 523 Sector Fund 417 The Hershey Co. 194, 501 VersaPay 155, 191, 360 Martin Marietta Materials 175, 371, 503 OceanaGold 22, 477 RA Pharmaceuticals 41 SPDR Consumer Discretionary Select The Singing Machine Co. 106 Vertex Resource Group 523 Martinrea International 148 OcianaGold 80 RADA Electronic Industries 43, 174, Sector Fund 374, 527 Theratechnologies 56, 144, 316 Vertix Resource Group 79 Mason Graphite 521 Omnicom Group 129 175, 306 SPDR Consumer Staples Select Sector theScore 37, 187, 322, 472 Vicon Industries 219, 238 MasterCard 506 ON Semiconductor 63, 415 Raging River Exploration 114, 297 Fund 373, 431 Thomson Reuters 35, 406 Victoria Gold 155, 285, 428 Materialise NV 107 ONE Hospitality Group 106 Ralph Lauren 261, 263, 501 SPDR Energy Select Sector ETF 350 Thor Industries 282 VieMed Healthcare 169, 212, 449 Mattel 195 Onex 133 Randgold Resources 18 SPDR Energy Select Sector Fund 527 Tidewater Midstream and Infrastructure Village Farms International 52, 143, 405 MAV Beauty Brands 77, 341, 353 Open Text 100, 279, 433 Raytheon 62 SPDR Financial Select Sector Fund 527 246, 452 Virgin Money Holdings PLC 218 Maverix Metals 212, 476 Orca Gold 276 Real Matters 12 SPDR Health Care Select Sector Fund 527 Tiffany & Co. 263, 307 VirTra 62, 174 Maxar Technologies 140, 301, 472, 494, 520 Orezone Gold 479 Reaves Utility Income Fund 86 SPDR Materials Select Sector Fund 527 Tiffany and Co. 413 Visa 135, 167, 194 McCoy Global 384 Organigram Holdings 34, 141, 286 Recipe Unlimited 166, 387 SPDR Portfolio S&P 500 High Dividend ETF Tilray 42, 66, 458 Vista Outdoor 174 McDonald’s 149 Organovo Holdings 107 RediShred Capital 100, 186, 299, 385, 472 151 Timbercreek Financial 476 Visteon 149 Med MedReleaf 286 Orla Mining 407 Redline Communications Group 521 SPDR S&P 500 ETF 110, 350 Time Warner 218 Vistra Energy 262 Mediagrif Interactive Technologies 125, Osisko Mining 171, 344 Reliq Health Technologies 323, 492 SPDR S&P 500 ETF Trust 175, 502 Titanium Transportation Group 170, 256, Vivendi SA 174 297 Otis Gold 155, 364 Renaissance Gold 107 SPDR S&P Bank ETF 374 367, 496 VIVO Cannabis 11, 406 Medicure 12, 100, 230, 404 Overstock.com 195 Repro Med Systems 86, 306, 439 SPDR S&P Insurance ETF 374 TiVo 526 Vodafone Group PLC 143 MedMen Enterprises 443 Resolute Forest Products 32, 347, 500 SPDR Technology Select Sector ETF 485 TMX Group 36 Vodafone Group PLC ADR 150 MedReleaf 236, 316 Restaurant Brands International 123, 124, SPDR Technology Select Sector Fund Toachi Mining 219 Volkswagen AG 150 Medtronic 261 Packaging Corp. of America 194 125, 215, 475 374, 417, 431 TORC Oil & Gas 145 Vornado Realty 173 MEG Energy 80, 125, 257, 476 Painted Pony Energy 59, 141 Revival Gold 276, 433 SPDR Utilities Select Sector Fund 373 Torex Gold Resources 306 Mercer International 256, 481 Palo Alto Networks 85 Rifco 404 Spectra Energy Partners LP 131, 150, 439 Toromont Industries 342 Methanex 13, 100, 255, 432 Pan American Silver 198, 241, 522 Rio2 321 Spin Master 169, 171, 195, 495 Toronto-Dominion Bank 15, 19, 45, 65, Wajax 216 Metro 23, 103, 219, 386 Pan Orient Energy 252 Ritchie Bros Auctioneers 369 Spirit Airlines 85, 525 124, 144, 257, 276, 287, 327, 415 Walgreens Boots Alliance 18, 42 Michael Kors 437 Paramount Resources 259 Ritchie Bros. Auctioneers 149 Splunk 149, 261 Total Energy Services 386 Walmart 18, 261, 457 Touquoise Hill Resources 497 Walt Disney 369, 417 Micron Technology 173, 415 Parex Resources 233, 307, 344 Riverview Bancorp 350 Square 263 Microsoft 105, 106, 130, 193, 194, 374, Park Lawn 38, 191, 317 Roche Holding AG 144 Tourmaline Oil 2, 63, 83, 120, 158 Waste Connections 124, 140, 232, 492 SRG Graphite 319 Toyota Motor 219, 501 WCM Focused International Growth Fund 394, 459, 485 Parkland Fuel 19, 87, 415, 451 Rocky Mountain Dealerships 279 SSR Mining 22, 188, 241, 301, 476 37 TransAlta Renewables 170 63 Midas Gold Partners Value Investments LP 67 Rogers Communications 103, 150, 346, Stantec 140, 146, 213, 365, 496 Mitel Networks 235 Transat AT 37, 167, 322, 432 WEC Energy Group 194 Partners Value Split Corp. Class AA Preferred 351 Starbucks 305 Mogo Finance Technology 184 TransCanada 351, 503 WeedMD 373, 409 Shares Series 6 67 Rogers Sugar 213, 275 Starlight Global Infrastructure Fund 438 Molina Healthcare 175 Roots 211, 303, 432 TransCanada Pipelines LP 174, 415 WELL Health Technologies 11 Party City Holdco 173 Starlight Investments Capital LP 438 Molson Coors Brewing 129, 414 Roxgold 80, 307, 476 Transcontinental 39, 130, 140, 394, 451 Wendy’s 149, 437 Pason Systems 43, 140, 362, 499 Stealth BioTherapeutics 173 Mondelez International 105 10 123 Royal Bank of Canada 14, 19, 65, 143, Travali Mining 171 Wesdome Gold Mines 22, 81, 144, 172, Pattern Energy Group , , 142 Stelco Holdings 135 Morgan Chase & Co. 459 PBF Energy 150 167, 194, 239, 259, 276, 287 Tree Island Steel 147, 232, 500 241, 296, 428, 477 Stella-Jones 164, 171, 273, 411, 493 Morgan Stanley 307 Pembina Pipeline 52, 96, 213, 228, 275, Royal Caribbean Cruises 151, 350 TRI Pointe Group 325 West Fraser Timber 122, 340, 475 STEP Energy Services 33, 190, 360, 479, Morneau Shepell 34 415, 439, 454, 503 Royal Gold 437 TripAdvisor 223 West Fraser Timber Co. 120, 133, 497 503 Mosaic 129, 174 Pengrowth Energy 158, 234, 321 Royal Nickel 130 Trisura Group 144 Western Energy Services 122, 364 53 Mosaic Co. 151 People 54, 208, 322 Rubicon Minerals 11, 39 Stingray Group Troilus Gold 320, 477 Western Forest Products 123, 125, 296, 520 Motorola 393 PepsiCo 173 Russel Metals 15, 135, 391 StorageVault Canada 8, 98, 144, 254 Trulieve Cannabis 78 Westhaven Ventures 134 26 99 Motorola Solutions 155 Performance Food Group 63 RYB Education Inc. ADR 351 STORE Capital 130 TSS 174 WestJet Airlines , , 254, 361, 523 Westport Fuel Systems 219 Mountain Province Diamonds 411 Petrobras Brazil ADR 502 Storm Resources 145, 390 TVA Group 498 Movado Group 263 Strad Energy Services 449 Twitter 417 Westshore Terminals Investment 168 Petroleo Brasileiro SA 482 133 MTY Food Group 120, 124, 344, 475 Stratabound Resources 285 Tyson Foods 502 Weyerhaeuser Petrus Resources 55 S&P Global 194, 458 Wheaton Precious Metals 301 Mullen Group 123, 300 Peyto Exploration & Development 2, 326, salesforce.com 17, 413, 457 Stratasys 107 Strongco 168 Whirlpool 281 387, 394, 496 Sangoma Technologies 60, 87, 259, 388, White Gold 285 PFB 148, 342 428 Stuart Olson 100, 167 U.S. Foods Holding 173 U.S. Global Jets ETF 19 Whitecap Resources 26, 114, 260 anoXplore 320 Pfizer 105 Sanmina 131 Sturm Ruger & Co. 174 N Ubisoft Enertainment SA 174 Williams-Sonoma 413 National Bank of Canada 65, 276, 287, 506 PG&E 307 Summit Industrial Income REIT 6, 50, 314 Saputo 283 UGE International 370 Windstream Holdings 238 Navios Maritime Midstream Partners LP 370 Philip Morris International 371 Savaria 42, 127, 143, 520 Summit Midstream Partners LP 370 Sun Life Financial 45, 126, 255, 384 UGI 63 Winnebago Industries 282 Nemaska Lithium 147, 319, 455 Phivida Holdings 374 Saville Resources 91, 353 ULTA Beauty 173 Winpak 141 Neo Lithium 36 Pinnacle Renewable Energy 140 SCANA 151, 307 Sun Metals 134 Suncor Energy 26, 107, 114, 135, 169, Under Armour 223 Workday 175 Neo Performance Materials 36, 52, 228, 454 Pinnacle Renewable Holdings 141, 300 Scandium International Mining 282 Uni-Select 126, 188, 389 World Class Extractions 153 Netflix 131, 195, 217, 239, 399, 417 Planet 13 Holdings 12, 429, 442 Schmitt Industries 174 303, 334, 466, 503 WPT Industrial REIT 138, 446 Sunniva 345 Unisync 170 NeuLion 188 Planet Fitness 151 Scotia Canadian Dividend Fund 194 United Continental Holdings 502 WSP Global 53, 166, 257, 365 Nevada Gold & Casinos 439, 527 Point Loma Resources 296 Scott’s Miracle-Gro 66 Sunoco LP 370, 415 Wyndham Worldwide 261 SunPower 437 United States Natural Gas Fund LP 111 Nevsun Resources 409 Pollard Banknote 58, 253, 448 SeaChange International 174, 503 62 Wynn Resorts 525 Sunworks 86 United States Oil Fund LP New Flyer Industries 189, 252 PotlatchDeltic 133 Sears Holdings 218 United Technologies 43 16 New Gold 125, 341 Power Americas Minerals 329 Secure Energy Services 435 Superior Gold , 155, 187, 241, 276 United Therapeutics 193 New Jersey Mining 177 Power Corporation of Canada 238 SEMAFO 57 Superior Plus 79, 351 UnitedHealth Group 106, 175 Xcel Energy 150 New Look Vision Group 166, 521 Prairie Provident Resources 98, 191, 273, Sempra Energy 174, 283, 327 Supernus Pharmaceuticals 86 Uniti Group 238 Xebec Adsorption 10, 165 New Oriental Education & Technology Group 411, 477 Seven Generations Energy 63, 81, 202 SuperValu 349 Universal Electronics 526 Xerox 327 351 PrairieSky Royalty 63, 140 Shares Commodities Select Strategy ETF Supreme Cannabis Co. 144, 272, 286 Urbana 111 XPEL 175 Newcrest Mining 243 PrairiSky Royalty 492 42 Supremex 127, 232, 473 US Auto Parts Network 174, 283 XPO Logistics 237 Newmont Mining 63 Precision Drilling 77 Shaw Communications 83, 316 Surge Energy 80, 164, 171, 364, 497 US Steel 281 Nexa Resources SA 321, 450 Premier Gold Mines 80 ShawCor 83, 144, 456 Suzano Papel e Celulose SA 150 USA Compression Partners 415 NexGen Energy 38, 307 Premium Brands Holdings 102, 186, 524 Shelco Holdings 126 Sylogist 82, 371, 494 USA Compression Partners LP 370 Yamana Gold 83, 233, 365 NextEra Energy 150 Pretium Resources 76, 318 Shopify 106, 123, 127, 130, 175, 229, 389, Symbility Solutions 208, 407 Utilities Select SPDR 43 Yangarra Resources 103, 120, 252, 307, 429 Nexus REIT 138, 270 Primo Water 173, 525 499 Synchrony Financial 414 Yelp 129 NFI Group 39, 435 PRO REIT 50 Sienna Senior Living 8, 174, 368 Synopsis 219 Yum! Brands 501 NGL Energy Partners LP 351 Pro Shares S&P 500 Dividend Sierra Wireless 143 Vale SA 130, 174 Nickel PJSC 130 Aristrocrats ETF 439 Signature Bank 217 Valeant Pharmaceuticals International 195, Nielsen Holdings PLC 217 Probe Metals 320 SilverCrest Metals 22, 55, 83, 189, 277, T. Rowe Price Group 458 221 ZCL Composites 35, 389 Nighthawk Gold 166 Procter & Gamble 106 451 TAG Oil 146, 316 Valens GroWorks 56, 142, 431 Zillow Group 263 Nike 173, 325, 457 Profound Medical 147 Singing Machine 526 Tahoe Resources 233, 408 VanEck Vectors BDC Income ETF 238 Zimtu Capital 91 Nintendo Co. Ltd. ADR 150 ProMetic Life Sciences 189 Singing Machine Co. 131 Taitron Components 174, 263 VanEck Vectors Mortgage REIT ETF 238 ZTO Express 307 NIO 526 ProntoForms 101, 168, 277 SiriusXM 369 TAL Education Group 62, 150 Vanguard Balanced Portfolio ETF 407, 519 Zymeworks 52, 409 Use the Investor’s Digest index and adviceforinvestors.com to discover Canada’s best investment advice in 3 easy steps

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