Auteur : Joany Page

03 Oct 2019

Issue 40- Tricon Bites the Bullet

On June 11, 2019, Tricon Capital Group (TSX: TCN) closed on their US$1.4 billion acquisition of 23 U.S. Sunbelt buildings, containing 7,300 units from the Starlight U.S. Multi-Family Core Fund. For this transaction, the company issued Starlight 50.78 million shares and assumed US$916 million in debt to complete the purchase. A portion of the shares issued were subject to a lock-up. On October 2, 2019, TCN decided to remove the lock-up on 38.6 million common shares, which were issued to non-insiders in connection to the deal. This
equates to 20% of its market cap.

Disclaimer: Palos Funds are shareholders of TCN.

 

By Charles Marleau, CIM & Joany Pagé, CFA

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By Charles Marleau, CIM & Joany Pagé, CFA

 

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By Robert Mendel

 

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By William Mitchell

18 Juil 2019

Issue 29- Investing in Population Trends

The growth rate of the world population is accelerating at an incredible speed. It took thousands of years for the global population to hit 5 billion; this happened in 1987. However, it only took 32 years to reach close to 8 billion people. Another noteworthy stat is that globally, people over 65 years of age now outnumber children under 5. People are living longer, but they are having less children.

 

Disclaimer: Palos Funds are shareholders of IIP-U, MI-U, TCN, SVI, MFC, SIA, and PLC.

By Charles Marleau, CIM & Joany Pagé, CFA

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By Charles Marleau, CIM & Joany Pagé, CFA

 

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By Robert Mendel

 

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By William Mitchell

11 Juil 2019

Issue 28- Alimentation Couche-Tard’s All Star Year

Alimentation Couche-Tard’s (TSX: ATD.B) year-end was on April 28th, 2019. On July 9th, they released their full year and Q4 results. ATD.B had a strong year with adjusted EBITDA growth of over 18%, and EPS growth of 27%. However, Q4 was a bit more difficult as the company’s EBITDA and EPS contracted, when compared year over year (yoy).

 

Disclaimer: Palos Funds are shareholders of ATD.B.

By Charles Marleau, CIM & Joany Pagé, CFA

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By Charles Marleau, CIM & Joany Pagé, CFA

 

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By Hubert Marleau

 

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By Robert Mendel

 

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By William Mitchell

04 Juil 2019

Issue 27- Dollarama Goes to Latin America

On July 2nd, 2019, Dollarama (TSX: DOL) announced that they exercised their option to acquire 50.1% of Dollarcity. This acquisition will establish the next growth era for DOL. The purchase price is approximately US$90M and is expected to close in August 2019. The transaction is immediately accretive to EPS. Dollarcity has lower margins, however I see this as an opportunity for DOL.

 

Disclaimer: Palos Funds are shareholders of DOL.

By Charles Marleau, CIM & Joany Pagé, CFA

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By Charles Marleau, CIM & Joany Pagé, CFA

 

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By Hubert Marleau

 

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By Robert Mendel

 

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By William Mitchell

27 Juin 2019

Issue 26- Tidewater is Moving Forward

On June 21, 2019, Tidewater Midstream and Infrastructure Ltd (TSX: TWM) announced that it had completed the Pioneer Pipeline; a 50/50 joint venture with Transalta Corp (TSX: TA). The Pioneer project is significant for both companies, as it will transport natural gas from the TWM Brazeau River gas plant to TA’s electric generating units at Keephills and Sundance.

Disclaimer: Palos Funds are shareholders of TWM & TA.

By Charles Marleau, CIM & Joany Pagé, CFA

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By Charles Marleau, CIM & Joany Pagé, CFA

 

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By Hubert Marleau

 

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By Robert Mendel

 

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By William Mitchell

20 Juin 2019

Issue 25- Capital Power Keeping It Clean

Capital Power Corp (TSX: CPX) is a North American power producer that owns 6,300 megawatts (MW) of capacity, including announced acquisitions and projects under construction. They develop, own, and operate power generation facilities using many energy sources such as gas, coal, solar, and wind. They also own a highly contracted portfolio of assets with an average age of 15 years with only 3% expected to retire in the next decade.

Disclaimer: Palos Funds are shareholders of CPX.

By Charles Marleau, CIM & Joany Pagé, CFA

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By Charles Marleau, CIM & Joany Pagé, CFA

 

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By Hubert Marleau

 

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By Robert Mendel

 

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By William Mitchell

13 Juin 2019

Issue 24 – Superior Plus Shifting Its Focus

On June 6th 2019, Superior Plus Corp (TSX:SPB) announced that they are looking to sell their specialty chemicals division. The chemical division manufactures sodium chlorate, caustic soda, and a few other
chemicals. If the transaction gets completed, it would have a significant positive impact on SPB’s balance sheet.

Disclaimer: Palos Funds are shareholders of SPB.

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By Charles Marleau, CIM & Joany Pagé, CFA

 

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By Robert Mendel

 

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By William Mitchell

06 Juin 2019

Issue 23 – The Month of May brings Volatility

The month of May has been volatile as the markets have been whiplashed by yet another wave of trade fears and tariffs. The China & US trade deal is taking longer than expected and has turned into a blame game. However, it is in the interest of both nations to find a common resolution on trade. We will have more information on June 28 and 29, when both nations are expected to meet at the G20 summit in Osaka.

Disclaimer: Palos Funds are shareholders of MRE, LNR, MG & TECK

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By Charles Marleau, CIM & Joany Pagé, CFA

 

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By Hubert Marleau

 

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By Robert Mendel

 

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By William Mitchell

30 Mai 2019

Issue 22 – A Premium Holding

On Wednesday May 29, we had the chance to sit down with George Paleologou, the CEO of Premium Brands Holdings Corp (TSX: PBH). PBH is a food processing company that is renowned for its sandwich, meat, protein and seafood products. As the name implies, they pride themselves on having a collection of premium brands, with premium products containing quality ingredients. There is a lot to like about PBH. They have a dividend yield of 2.5%, their net debt to EBITDA on 2019 estimated exit numbers is now about 3x (their comfort level is 4-4.5x), and they grew their adjusted EBITDA over 60% in just 2 years.

Disclaimer: Palos Funds are shareholders of PBH.

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By Charles Marleau, CIM & Joany Pagé, CFA

 

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By Hubert Marleau

 

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By Robert Mendel

 

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By William Mitchell

23 Mai 2019

Issue 21 – The Handcuffs are Off

On May 17, 2019, the Canadian and US governments announced their decision to eliminate steel and aluminum tariffs. A company that I believe will significantly benefit from this phenomenon is Stelco (TSX: STLC). The elimination of tariffs should increase the company’s annual EBITDA by approximately $60 million.  When the tariffs were initially introduced on May 31, 2018, STLC’s EBITDA was impacted by approximately $90 million

Disclaimer: Palos Funds are shareholders of STLC.

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By Charles Marleau, CIM & Joany Pagé, CFA

 

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By Hubert Marleau

 

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By Robert Mendel

 

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By William Mitchell

17 Mai 2019

Issue 20 – Keyera Is Looking Forward

On May 15, 2019 Keyera Corp (TSX:KEY) announced it’s Q1 2019 results. The results by themselves were not spectacular because of their marketing business. The company encountered an unplanned 17-day outage at Alberta EnviroFuels, which resulted in lower ISO-octane contribution.

Disclaimer: Palos Funds are shareholders of KEY.

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By Charles Marleau, CIM & Joany Pagé, CFA

 

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By Hubert Marleau

 

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By Robert Mendel

 

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By William Mitchell

10 Mai 2019

Issue 19 – The Strong gets Stronger

The portfolio is invested in what we believe to be the strongest Canadian E&P in the TSX. Our approach for the past few years has been sticking to companies with strong management teams, strong balance sheets, low decline rates, and with controlled production growth. I continue to stay away from the highly levered, high oil sensitivity companies, as the risk to reward remains high.

Disclaimer: Palos Funds are shareholders of TOG.

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By Charles Marleau, CIM & Joany Pagé, CFA

 

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By Hubert Marleau

 

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By Robert Mendel

 

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By William Mitchell

06 Mai 2019

Issue 18 – InterRent Has Another Very Impressive Quarter

On April 29, 2019, InterRent Real Estate Investment Trust (TSX:IIP-U) announced its 2019 Q1 results and they were impressive. The company continues to deliver double digit organic growth. The REIT has now delivered this kind of growth for six consecutive quarters. The company delivered 12% NOI growth and its revenue increased by 8% QoQ . The organic growth came from an increase in the average monthly rent. Furthermore, management continues to be disciplined on cost. Operating costs were very impressive, especially that we had record cold weather in Eastern Canada.

Disclaimer: Palos Funds are shareholders of IIP-U.

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By Charles Marleau, CIM & Joany Pagé, CFA

 

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By Hubert Marleau

 

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By Robert Mendel

 

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By William Mitchell

29 Avr 2019

Issue 17 – Horizon North Should Not be Ignored

Horizon North Logistics Inc (TSX:HNL) is no longer a one trick pony. Its industrial service business provides many services in camps and accommodation. However, their business is no longer at the mercy of oil sands development. The industrial services business has diversified into non-energy, liquid rich plays, and Westcoast LNG. HNL is now the largest open camp provider in the Montney/Duvernay area by market share. The North Montney will be key in supporting LNG feed stock. Palos is of the opinion that the majority of Canadian E&P’s growth in the coming years will be coming from South & North Montney/Duvernay. HNL is well positioned to capitalize on this growth.

Disclaimer: Palos Funds are shareholders of HNL.

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By Charles Marleau, CIM & Joany Pagé, CFA

 

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By Hubert Marleau

 

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By Robert Mendel

 

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By William Mitchell

22 Avr 2019

Issue 16 – Lundin Defies the Skeptics

Lundin Mining Corp (TSX: LUN) has been on the prowl for acquisitions for a few years now. If you recall, LUN tried to acquire Nevsun Resources Ltd. in July 2018. However, a competitive offer came from Zijin mining of China. Analysts and investors became very skeptic about LUN executing on any acquisition. I always appreciated management’s discipline regarding M&A. They are very patient and do not overpay. On April 15, 2019, LUN announced that they are acquiring Yamana’s (TSX: YRI) Chapada copper-gold mine in Brazil for $800Mln in cash plus $225Mln in contingent payments.

Disclaimer: Palos Funds are shareholders of LUN.

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By Charles Marleau, CIM & Joany Pagé, CFA

 

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By Hubert Marleau

 

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By Robert Mendel

 

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By William Mitchell