A survey of North American equities heading in both directions
On the rise
Shares of Canada’s BlackBerry Ltd. (BB-T) jumped almost 12 per cent alongside retail darlings GameStop (GME-N) and AMC (AMC-N) after posts from “Roaring Kitty” Keith Gill raised chatter about the return of the central figure behind the 2021 meme stock frenzy, setting off a rally in the shares.
The stocks more than doubled and were set to extend gains from the previous session after Mr. Gill shared a meme and more than 10 clips from movies, including X-Men Origins: Wolverine, The Avengers and 1993 Western Tombstone.
Even though the posts did not mention company names, shares of video game retailer GameStop and AMC, the world’s largest theater chain, were the most-traded stocks by retail investors on Monday, J.P.Morgan data showed.
That was mainly because Gill, who is returning to social media platform X after a gap of nearly three years, is credited with sparking the so-called Reddit rally in January 2021 with bullish calls on video game retailer GameStop.
“The fact that Roaring Kitty is back should be totally meaningless to the stock market (but) the fact that it isn’t is fascinating,” said Matthew Tuttle, CEO of Tuttle Capital Management.
“Meme stocks coming back juices the entire market of the stocks that a lot of retail guys like to trade and provides them opportunities to make money outside of buy and hold.”
Hudbay Minerals Inc. (HBM-T) rose 14.1 per cent after it reported a first-quarter profit of US$18.5-million, up from US$5.5-million a year ago, as its revenue rose nearly 80 per cent.
The Toronto-based mining company says its profit amounted to 5 US cents per share for the quarter ended March 31, up from 2 US cents per share in the same quarter last year.
Revenue for the quarter totalled US$525.0-million, up from US$295.2-million in the first quarter of 2023.
Consolidated copper production totalled 34,749 tons for the quarter, up from 22,562 tons a year earlier, while gold production in the quarter amounted to 90,392 ounces, up from 47,240 ounces in the same quarter last year.
On an adjusted basis, Hudbay says it earned 16 US cents per share in its latest quarter compared with a break even adjusted result per share in the first quarter of 2023.
Keyera Corp. (KEY-T) was higher by 2.1 per cent on better-than-expected first-quarter result and a raise to its marketing guidance.
Before the bell, the Calgary-based midstream oil and gas operator reported adjusted EBITDA of $314-million, up from $292-million from the same period a year ago and above the Street’s expectation of $295-million. Earnings per share of 31 cents was lower than the consensus projection of 52 cents due to a $72-million unrealized loss on commodity-related contracts.
Keyera also set its 2024 marketing guidance at $430-million to $470-million, well above its base business run rate guidance range of $310-million to $350-million.
“We expect a positive reaction to the earnings and Marketing guidance beat. While many expected strong Marketing guidance; we believe the guide is stronger than anticipated,” said Citi analyst Spiro Dounis
Centerra Gold Inc. (CG-T) increased 0.3 per cent after it reported a 35-per-cent jump in first-quarter revenue and said it was well positioned to achieve its 2024 guidance.
The Toronto-based miner reported revenue of US$305.8-million for the quarter, exceeding the Street’s expectation by US$10.59-million. Non-GAAP earnings per share of 15 US cents topped the consensus estimate by 2 US cents. beats by $0.02.
“Centerra had a strong quarter of operating performance with production and costs outperforming our expectations,” said president and CEO Paul Tomory. “At Mount Milligan, we continued to advance a site-wide optimization program, implementing tangible initiatives in several areas, including concentrate management, mine operations and mine-to-mill optimization. We are also focused on a preliminary economic assessment to evaluate the substantial mineral resources at the Mount Milligan mine to unlock value beyond its current 2035 mine life. At Öksüt, we remain on track with elevated production in the first half of the year, in line with our guidance.”
Teck Resources Ltd. (TECK.B-T) gained 2 per cent after CEO Jonathan Price said on Tuesday it is expecting to generate annual earnings before interest, depreciation, tax and amortization (EBIDTA) of US$3-billion if copper prices hit US$5 per pound.
For Vancouver-based Teck, copper is the main driver of profitability after it sold its steel-making coal business to a consortium of buyers led by Swiss miner Glencore for US$8.9-billion last year.
Mr/ Price, speaking at the Bank of America Metals, Mining and Steels conference in Miami, gave a range of predictions for Teck’s annual EBITDA at different copper prices, the lowest being US$2-billion if copper trades at US$4 per pound.
U.S. copper prices on the CME hit a record peak on Tuesday, with the Comex May contract hitting a high of US$5.082 a pound, fueled by robust demand in the United States and fund buying.
The red metal has been in focus after mining giant
BHP’s US$37-billion offer to buy out rival Anglo American. Analysts have been nudging Teck to explore acquisition options because it is flush with cash from the sale of steel-making business.
But Price said Teck is focused on executing its existing projects when asked whether the company would acquire any copper assets.
“I know there’s a lot of discussion in the industry about buy versus build,” Price said.” And I think when people are looking at projects with capital intensities above US$30,000 per ton, perhaps buying capacity makes more sense.”
Several industry estimates suggest the cost of building a new copper mine today is around US$44,000 per ton.
On the decline
Hydro One Ltd. (H-T) was narrowly lower after it reported its first-quarter profit rose compared with a year earlier, helped by higher revenue.
The power utility says it earned net income attributable to common shareholders of $293-million or 49 cents per diluted share for the quarter ended March 31.
The result compared with a profit of $282-million or 47 cents per diluted share in the first quarter of 2023.
Revenue for the quarter totalled $2.17-billion, up from $2.07-billion in the same quarter last year.
Revenue, net of purchased power, amounted to $1.07-billion, up from $1.06-billion a year earlier.
Hydro One is Ontario’s largest electricity transmission and distribution provider with about 1.5 million customers.
OrganiGram Holdings Inc. (OGI-T) finished down 1.2 per cent in the wake of reporting a loss of US$20.1-million in its fiscal second quarter.
On a per-share basis, the Toronto-based company said it had a loss of 22 US cents. Losses, adjusted for non-recurring costs, came to 12 US cents per share.
The results fell short of Wall Street expectations. The average estimate of three analysts surveyed by Zacks Investment Research was for a loss of 6 US cents per share.
The cannabis producer posted revenue of US$27.9-million in the period, which also did not meet Street forecasts. Three analysts surveyed by Zacks expected US$28.3-million.
Walmart (WMT-N) was lower after the Wall Street Journal reported late on Monday it is cutting hundreds of corporate jobs and asking most remote workers to move to offices.
Workers at the U.S. retail giant’s smaller offices in Dallas, Atlanta and Toronto are being asked to move to other central hubs such as Walmart’s corporate base in Bentonville as well as Hoboken or Southern California, the report said.
Strong Walmart earnings may already be priced in with shares near record
The company will still let staff work remotely part time, as long as they are in offices a majority of the time.
Walmart, which employed about 2.1 million associates as of Jan. 31, did not respond to a Reuters request for comment.
The job cuts at Walmart also underscores the retail giant’s efforts to cut costs as discretionary spending in the United States remains strained.
Spending among Americans remained weak compared to 2021, at least for non-essential, discretionary merchandise like clothing, according to surveys by Deloitte.
Home Depot (HD-N) slid after it posted a bigger-than-expected drop in quarterly same-store sales on Tuesday as cautious Americans shelled out less for big-ticket items while focusing on small-scale home repair and maintenance tasks.
Customers have reined in discretionary spending and put pricey renovations on hold as they adjust to higher borrowing costs and elevated inflation.
“Home improvement is still a coiled spring,” Truist analyst Scot Ciccarelli said, adding that if the Federal Reserve cuts interest rates there could be a significant re-acceleration in home improvement or maintenance activity as people focus on improving their existing homes.
Foot traffic at Home Depot ticked down in the first quarter, except for an Easter spending boost in March. Store visits dipped 0.3 per cent in February and 2.4 per cent in April, according to data firm Placer.ai.
Home Depot CEO Ted Decker said the quarter was impacted by a delayed start to spring and continued softness in certain larger discretionary projects.
Customer transactions, or the number of purchases made by Home Depot shoppers at its stores or online, fell 1 per cent, but less than a steep 4.8-per-cent drop last year.
Meanwhile, the company is bulking up its Pro business segment consisting of professional builders and contractors by agreeing in March to buy SRS Distribution in an US$18.25-billion deal.
Comparable sales fell for the sixth straight quarter, down 2.8 per cent in the first quarter, compared with analysts’ estimates of a 2.09-per-cent drop, according to LSEG data.
Still, the top U.S. home improvement chain reaffirmed its fiscal 2024 targets as it benefits from the small renovations Americans are taking up in their existing homes.
It expects comparable sales to decline about 1 per cent and earnings-per-share-percent growth of about 1 per cent.
First-quarter earnings of US$3.63 per share edged past estimates of US$3.60.
China’s Alibaba Group Holding (BABA-N) beat analysts’ estimates for fourth-quarter revenue on Tuesday, as a focus on low-cost goods in response to cautious consumer spending helped boost domestic e-commerce sales in the three-month period.
Its U.S.-listed shares, however, fell, as profit fell about 86 per cent in the fourth quarter.
Consumers in China have been spending carefully after the pandemic amid an economic slowdown and property slump.
Analysts expected strong growth from Alibaba’s international digital commerce arm, given its investments in building global market share and appetite among global consumers for low-cost goods from China.
Analysts expect a 39-per-cent revenue rise in the segment, according to LSEG data.
The company reported revenue of 221.87 billion yuan (US$30.66-billion) in the three months ended March 31, compared with a consensus estimate of 219.66 billion yuan, according to LSEG data.
Net income in the March-quarter was 3.27 billion yuan (US$451.94-million), compared with 23.52 billion yuan a year ago.
With files from staff and wires