A humorous look at the companies that caught our eye, for better or worse, this week
TransAlta Renewables (DOG)
RNW - TSX
That must have been a rather stiff breeze. Months after a turbine tower collapsed at its wind farm in New Brunswick, TransAlta Renewables released more bad news this week: It will need to replace all 50 turbine foundations at the Kent Hills 1 and 2 sites in that province after an investigation revealed that design flaws led to “crack propagation” in the structures. With replacement expected to cost $75-million to $100-million in total – plus foregone revenue of about $3.4-million a month for as long as all 50 turbines are offline – you could say investors have blown a lot of money on this stock.
Natural Gas (STAR)
Natural Gas February futures
Downsides of extremely cold weather: car won’t start; extremities turn black; tongue gets stuck on metal pole. Upside of cold weather: Natural gas investors make lots of money. With people cranking up their furnaces as a cold blast descends on parts of the eastern United States and Canada, natural gas futures hit their highest levels since November this week. Surging demand, combined with tight supplies, have helped natural gas rebound from a 36-per-cent drop in the fourth quarter triggered by warm weather and disruptions caused by COVID-19. Nothing like making money to warm the hearts of investors.
Aritzia (STAR)
ATZ - TSX
In the old days – before e-commerce changed everything – people would shop in physical “stores,” talk to “salespeople” and pay for items at a “cash register.” Wait. People are still doing that at Aritzia. Shares of the Vancouver-based women’s apparel chain soared after it posted results well above expectations, including a 72-per-cent jump in sales at its Canadian and U.S. stores to $305.3-million and a 46.9-per-cent increase in online revenue to $148-million. With Aritzia’s stock more than doubling in the past year, the death of bricks-and-mortar retail has been greatly exaggerated.
Virgin Galactic Holdings (DOG)
SPCE - NYSE
Business quiz! Shares of space tourism company Virgin Galactic plunged after: a) founder Richard Branson accidentally pressed the “eject” button midway through a test flight, sending the billionaire into endless orbit around the Earth; b) its spacecraft was shot down by a North Korean surface-to-air missile; c) the company – which has yet to have its first commercial flight because of repeated delays – announced plans to raise up to US$500-million in a private offering of convertible bonds, raising fears of potential share dilution. Answer: c.
Koninklijke Philips (DOG)
PHG - NYSE
Koninklijke Philips specializes in health technology, but its investors are suddenly feeling very sick. The shares suffered their worst drop in more than 20 years after Amsterdam-based Philips slashed its fourth-quarter outlook, citing supply chain disruptions and electronic component shortages that have delayed customer equipment installations. What’s more, after recalling up to four million sleep-apnea and respiratory devices last year amid concerns that a foam material could degrade and become toxic, the company added another one million machines to the recall list. Maybe Philips should have stuck to making radios.
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