A humorous look at the companies that caught our eye, for better or worse, this week
Riot Blockchain Inc. (RIOT-Q) STAR
What’s in a name? That which we call a bitcoin. You may recall Riot Blockchain, formerly a diagnostic machinery maker known as Bioptix Inc., was among a handful of firms that cleverly changed names and business focuses back in 2017 to cash in on the sudden popularity of cryptocurrencies. It worked – briefly – before virtual currencies started to crash. Now this bitcoin mining company is back to soaring in value as the sector inflates once again. Riot Blockchain offered further good news this month in announcing it “will achieve an estimated hash rate capacity of 1.06 Exahash per second with the deployment of the newly received 2,002 S19 Pro Antminers.” Sounds impressive, but someone better call IT and help us understand.
A&W Revenue Royalties Income Fund (AW-UN-T) STAR
Too bad the old car-hop service ain’t much of a thing any more. The socially distanced friendly way to chow down on burgers and slurp root beer would have been a welcome change of pace in this era of hastily arranged takeout and app-ordered deliveries left on front doorsteps. The good news for investors is that tasty distributions haven’t gone out of style. A&W Revenue Royalties announced this week it is hiking its monthly distribution from 10 cents to 13.5 cents a unit even as its same-store sales growth tumbled 9.3 per cent in the fourth quarter amid the pandemic. For dessert, investors got a stock that gained 5.8% this week.
Wayfair Inc. (W-N) DOG
Who needs big-box stores and shopping malls when you can have a slick seven-person hot tub and a mid-century modern sofa delivered right to your doorstep with a click of a mouse. The online furniture and home goods retailer saw its stock soar more than 230 per cent over the past year as shopping for home improvements became a favourite way to pass the time while in lockdown. Its revenue rose an impressive 59 per cent in the first nine months of 2020. But as the company prepares to release fourth-quarter results this Thursday, investors are wondering if the stock is just a little too trendy given growth may cool in a post-COVID world. Just like after those Friday-night Chardonnay-influenced online purchases of hot tubs that won’t arrive until next December, shareholders are worrying there could be some buyer’s regret.
Celsius Holdings Inc. (CELH-Q) DOG
It’s easy to call this stock a star after an almost 1,000-per-cent surge over the past year. Still, after this past week, it’s a close call. Shares in this small-cap beverage company are starting to lose some of their fizz as investors take note of some supercharged valuations. Celsius makes calorie-burning thirst quenchers frequently targeted at gym bunnies, with its namesake fitness drink using ingredients such as caffeine and green tea to boost metabolism. Problem is, this has turned into a US$4.3-billion market cap company with a mere US$36.8-million in quarterly sales at a time most of us prefer a power nap in front of Netflix than a power workout at GoodLife. Investors are saying it’s time for a rest.
Barrick Gold Corp. (GOLD-N) DOG
There’s just no pleasing Barrick investors these days. On Thursday, it reported its sixth straight earnings beat, revealed plans to pay out US$750-million in a series of one-time payouts, and declared its usual quarterly dividend. The reaction: Shares tumbled 2.6 per cent. Investors are taking much more of a shine these days to companies that mine for bitcoin rather than gold, as the price for bullion continues to slide well below the record highs of last year. Even Warren Buffett offloaded his Barrick stake at the end of 2020, according to a regulatory filing this week. With bullion losing lustre and analysts believing the company has enough free cash flow to boost its dividend further, Barrick may need to rethink that new GOLD ticker on Wall Street and go with YIELD instead to get some attention.
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.