A roundup of some of the North American equities making moves in both directions today
On the rise
Shares of Canopy Growth Corp. (WEED-T) jumped 2.1 per cent on Tuesday in the wake of announcing an all-cash acquisition of Spain-based licensed cannabis producer Cáñamo y Fibras Naturales S.L. for an undisclosed price.
“The acquisition lays the foundation for Canopy Growth to expand its European production footprint into one of the most ideal growing regions in the world, complementing the company’s existing 430,000 square foot licensed production site in Odense, Denmark , as well as its world-class ISO 13485 internationally certified Storz and Bickel facility in Tütlingen, Germany,” the company said.
At a conference in Toronto, Canopy co-chief executive Bruce Linton said he is expecting a “growth quarter” ahead and foresees the cannabis company will generate $1-billion in revenue during its next financial year.
Aurora Cannabis Inc. (ACB-T) rose 4 per cent after announcing a binding agreement to acquire all of the issued and outstanding common shares of Hempco Food and Fiber Inc. (HEMP-X) that it does not already owned for approximately $63.4-million.
“This transaction will enable us to fully integrate Hempco and its new Nisku processing facility into Aurora’s global hemp operations including Agropro, Borela and ICC,” said Aurora chief executive officer Terry Booth. “Our goal is to strengthen our CBD-from-hemp supply chain as well as our hemp business of hemp-based superfoods, nutraceuticals and fibers. With vertical integration, product innovation expertise, and global reach, we are well positioned to extend our market share in these potential multibillion-dollar industries. We look forward to executing with the Hempco team on our global hemp and CBD strategy, and we invite the Hempco shareholders to join us on this exciting journey.”
Aurora, which current owns 52-per-cent of the Vancouver-based company’s shares, has agreed to pay $1.04 per Hempco share.
Hempco jumped 10.4 per cent on the news.
A day after underwhelming quarterly results pushed its share price down over 14 per cent, Aphria Inc. (APHA-T) sat 0.7 per cent higher.
In a research note released before market open, Clarus Securities analyst Noel Atkinson raised his target for Aphria shares, noting: “[Monday] Aphria reported its Q3/FY19 (Feb) financial results that missed our forecast, particularly when it came to the crucial Canadian cannabis business unit. However, the results tell the story of a company dealing with limited capacity and production bottlenecks until it received Health Canada licensing for the crucial Part IV/V expansion (80,000 kg/year) that was received right after quarter-end on March 4. We still expect a very large and rapid ramp in revenues starting this summer that should deliver significant economies of scale.”
CIBC’s John Zamparo said: “Aphria’s FQ3 results demonstrate a company with significant future capacity potential, but also one that is still in ramp-up mode with many moving parts. We continue to believe Aphria’s cultivation and automation skills provide a solid competitive advantage, and the company’s 10-per-cent market share in the recent quarter (our estimate) is notable, but at this stage, we gravitate towards other names in the sector with stronger balance sheets and more defined strategies for the medium term.”
Shares of Lundin Mining Corp. (LUN-T) continued to soar in the wake of Monday’s announcement that it has agreed to buy Yamana Gold Inc.’s (YRI-T) Chapada mine in Brazil in a deal that could eventually top US$1-billion.
A day after Lundin jumped 8 per cent, its biggest rise in more than three months, the stock sat 1.4 per cent higher.
Conversely, Yamana shares were still sliding, declining 7.3 per cent.
Cenovus Energy Inc. (CVE-T) increased 0.7 per cent after an equity analyst at Goldman Sachs raised his rating for its stock.
“We believe that there is potential for CVE to sign further rail contracts or expand capacity at its Bruderheim rail terminal, which could further minimize exposure to widening WTI-WCS differentials," said Neil Mehta.
Netflix Inc. (NFLX-Q) sat 1 per cent higher ahead of the release of its first-quarter financial results after market close.
Citing its current valuation and the belief that the Street’s subscriber projections “seem conservative, an equity analyst at Deutsche Bank upgraded it stock on Tuesday morning.
“Aside from pay TV, which is losing audience share, there are no other competing platforms that approach Netflix’s reach,” said Bryan Kraft.
Shares of BlackRock Inc. (BLK-N), the world’s largest asset manager, rose 3.3 per cent after it reported first-quarter profit that exceeded expectations.
Total assets under management grew 3 per cent to US$6.52-trillion in the quarter through March 31 from a year earlier, amid a broad-based rebound in global equity markets. Assets had dipped below US$6-trillion amid market turmoil late last year.
Total quarterly net inflows across all product types jumped 13.6 per cent to $64.67 billion from a year earlier.
Overall, the company sold US$59-billion in stock, bond and other “long-term” investment funds, up from the US$43.6-billion in the quarter ended Dec. 31.
On the decline
Village Farms International Inc. (VFF-T) dropped 10.9 per cent after activist short-seller Citron Research released a critical report on the B.C-based company.
UnitedHealth Group Inc. (UNH-N) fell 4 per cent despite exceeding expectations with its first-quarter profit and raising its 2019 earnings forecast, driven by strength in its pharmacy benefit management business and higher enrollment for its health plans.
The largest U.S. health insurer raised its full-year adjusted earnings forecast to between US$14.50 and US$14.75 per share from its prior guidance of US$14.40 to US$14.70.
"Our employees' shared vision of improving the health of the people we serve and the performance of health systems for everyone is producing value for society and driving consistent growth for our businesses," said CEO David Wichmann in a release.
Gold producers fell on Tuesday as spot gold prices dropped to their lowest level this year.
Barrick Gold Corp. (ABX-T), Agnico Eagle Mines Ltd. (AEM-T) and Iamgold Corp. (IMG-T) dipped 2.8 per cent, 3 per cent and 4.1 per cent, respectively.
Kinross Gold Corp. (K-T) was 1.1 per cent lower.
Before market open, Kinross announced a plan to streamline its senior leadership group. Senior vice-president and chief operating officer Lauren Roberts and senior vice-president of human resources Gina Jardine are leaving the mining company “by mutual agreement.”
Paul Tomory will take on the role of executive vice-president and chief technical Officer “and broaden his portfolio to take on leadership of regional operations.” “With the goal of increasing efficiency and cost management, we have streamlined our senior leadership team to ensure we are well positioned to continue delivering on our commitments and building value for the future,” said chief executive officer Paul Rollinson.
Bank of America Corp. (BAC-N) closed flat after its first-quarter revenue missed expectations, despite earnings beating the Street’s forecast.
The second-biggest U.S. bank by assets reported revenue, net of interest expense, slipped to US$23-billion from US$23.1-billion a year ago, which fell short of analysts’ expectations of US$23.3-billion.
Excluding one-time items, the bank earned 71 US cents per share, beating the 66 UScents per share analysts on average had expected.
Dream Industrial REIT (DIR.UN-T) dropped 3.7 per cent after it announced a $125-million bought-deal financing.
It has an agreement to sell 10.85 million units at a price of $11.55 each to a syndicate of underwriters led by TD Securities Inc.
It intends to use the net proceeds “to fund four acquisitions in its target markets, to partially repay the outstanding balance on its revolving credit facility and for general trust purposes.”
With files from staff and wires