Spare Change…
Another busy week of earnings reports with 21 companies reporting for the period April 1 – June 30, 2022. These three months are commonly referred to as the second quarter but depending on when a company’s fiscal year starts, this can be the first, third or fourth quarter. For example, Skyworks Solutions reported their third quarter earnings this week. Something to keep in mind when reviewing a company’s quarterly reports – quarterly earnings reports do not necessarily align with calendar quarters.
The Bank of England raised interest rates by 0.5%, the largest in 27 years, to 1.75% in its attempt to stamp out inflation which is now over 12% in the United Kingdom. The biggest driver of the soaring inflation is the Russian invasion of Ukraine which has sent energy prices in the United Kingdom soaring.
On Friday, a stronger than expected July jobs report coming out of the US with 528,000 jobs added and the unemployment rate falling to a 50 year low of 3.5%. The report caused investors to think the Fed will stay the course for their aggressive interest rate hikes into September. In Canada, the Canadian jobs report showed the number of jobs falling, while at the same time Canada’s unemployment rate remained at its record low 4.9%. Seems odd to lose jobs and have the unemployment rate remain unchanged. In any event, the bank of Canada is likely to continue their aggressive approach to battling inflation with at least a 0.75% interest rate hike at their next meeting.
Weekly Market Review
Monday: Not the greatest start to August as the four major North American Indexes ended the day essentially flat. In the case of Canada’s Toronto Stock Exchange Composite Index (TSX), the Index gained ground. It was a holiday across most of Canada so while the TSX was open for business, most Canadian investors took the day off.
It was business as usual in the US, with the S&P 500 Index (S&P), the Dow Jones Industrial Average (DJIA), and the Nasdaq Composite Index (Nasdaq) breaking a three-day winning streak. Hawkish comments coming out of last week’s US Federal Reserve (Fed) meeting, as well as data indicating growth in the manufacturing sector was slowing down dragged down the Indexes. While all three Indexes ended the day in the red, none dropped more than 0.3% (basically even to where they started the day).
Tuesday: After a strong July, all four Indexes are falling back as it appears investors are locking in recent gains. Tensions between China and the USA over Speaker of the House Nancy Pelosi’s visit to Taiwan also weighed down the Indexes. On the TSX in Canada, the Technology and Healthcare sectors were the only Canadian sectors to gain ground.
In America, the three Indexes went on a rollercoaster ride today, with all three Indexes ending the day in the red. It was a broad-based decline with all S&P sectors losing ground today.
Wednesday: The easing of geopolitical concerns related to Nancy Pelosi’s visit to Taiwan, strong corporate earnings, and stronger than expected economic data helped boost all four major North American Indexes as they rebounded from Tuesday’s losses. In Canada, the Canadian Technology and Financial sectors lifted the TSX higher, overcoming the drag of the Canadian Energy sector, which was weighed down by a drop in oil prices. In the US, the Nasdaq reached its highest level since May 2022 led by gains in the Consumer Cyclical and the Technology sectors.
Thursday: The marketplace was essentially flat as investors await employment data that will likely influence future interest rate hikes. Strong reports could lead the Bank of Canada and the US Federal Reserve to be more aggressive in their respective future interest rate hikes. The TSX and Nasdaq inched into positive territory, while the S&P and DJIA fell slightly. In Canada, strength in the Canadian Consumer cyclical and Industrials sectors were enough to offset a fall in the Energy sector (oil fell to its lowest level since before the Russian invasion of Ukraine).
In the US, it was the high growth technology companies that buoyed the Nasdaq into the black while the S&P and DJIA were unable to overcome the drop in the S&P Energy sector caused by lower oil prices.
Friday: The Indexes didn’t do all that great, but did enough during the week to end the week in the black. In Canada, The TSX nudged slightly upward as an increase in the price of oil lifted the Canadian Energy sector. The Basic Materials (natural resources), Healthcare, and Industrials sectors also helped the TSX end the day higher.
In the US, the DJIA was the only US Index to end the day in the black thanks to the gains in the S&P Energy sector. Fears of another 0.75% interest rate hike beat down the interest sensitive Technology and Consumer Cyclical sectors, preventing the S&P and Nasdaq from joining the DJIA on the positive side of the ledger.
For the week, the TSX dropped 0.37%,the S&P 500 gained 0.36%, the Dow slid back 0.13% and the Nasdaq jumped 2.15%.
Weekly Portfolio Review
A mixed bag for the four major North American Indexes. The technology company heavy Nasdaq once again led the way with the S&P also ending the week higher. The energy and mining company heavy TSX fell back as the price of oil continued to drift downward. Finally, the more diverse yet smaller (30 companies) DJIA ended the week lower.
As for the portfolios, another good week with Portfolio 3 leading the way. As you can see all three Portfolios easily best the best performing Nasdaq Index. As the graph shows, the heavier the concentration in technology companies the better the Portfolio performed this past week. This is slowly starting make up for the pain in the first half of 2022 when being technology heavy was an anchor.
Companies on the Radar
Amazon (NASD:AMZN) and Ferrari (NYSE:RACE) remain as the only companies on my Radar. As the share price for both continues to rise, they are moving away rather than closer.
Amazon was dropping when it caught my attention. It went down further before rising to its current price. If I had bought it when it first came to my attention, I would be up 14%, even more if I had bought it when it was under US$ 110. Sigh!
Ferrari was rising from its June lows when I came across the notion of owning Ferrari. It has continued to climb and is now 16.5% higher. Double sigh!
Portfolio Update
Portfolio 1
Portfolio 1 for the week ended August 5, 2022: UP 
- Good earnings report from Lattice Semiconductor (NASD:LSCC), growing net income by over 100%. As a result of their continued robust growth, Lattice has been moved up to the Russel 1000 Index (the top 1000 companies from the Russell 3000 Index) from the Russell 2000 Index (the smallest 2,000 companies in the Russell 3000).
- Tesla (NASD:TSLA) shareholders will be voting on another stock split, this time a 3 for 1 split. Tesla’s management maintains the stock split will make shares in Tesla more affordable to small and individual investors.
- Rogers Communications (TSX:RCI.B) is balking at the Canadian competition tribunal’s request for at least an additional six months to investigate the sale of Shaw Communications (TSX:SJR.B) Freedom Mobile to Canada’s Quebecor. The tribunal is concerned the merger of Rogers and Shaw will minimize competition in Canada’s wireless industry. I would suggest going from four players to three players minimizes competition.
- In recognition of Celsius Holdings (NASD:CELH) strong earnings and growth, the company is being promoted from the S&P SmallCap 600 to the S&P MidCap 400. The SmallCap 600 covers 601 fast growing companies with a market capitalization between US$ 850 million and US$ 3.6 billion. The Midcap 400 covers 400 fast growing companies with a market capitalization between US$ 3.6 billion and US$ 13.1 billion. This promotion is a good thing!
Activity
No significant activity to report this week.
Dividends
Dividends Received this week for the following companies:
Companies followed by DRIP (Dividend Re-Investment Plan) indicate additional shares were purchased with the dividend. Any cash leftover was added to the cash balance.
Canadian $
Toronto-Dominion Bank (TSX:TD) DRIP
US $
No US$ dividends this past week.
Quarterly Reports
Lattice Semiconductor Corp.
All currency listed in thousands of US dollars
Selected highlights from their second quarter 2022 financial results on August 1, 2022
- Record quarterly revenue with growth of 28% compared to Q2 2021 and 7% compared to Q1 2022.
- Gross margin improved by 7.2%.
- Net Income improves to $44,532 from $21,838 in the same quarter last year, an increase of 100.7%.
- Lattice moved up to the large-cap Russell 1000 Index from the Russell 2000 Index, an indication the company continues to grow in value.
Pinterest, Inc.
All currency listed in US dollars
Selected highlights from their second quarter 2022 financial results on August 1, 2022
- Second quarter revenue grew 9% year over year to $666 million.
- Net loss was $43 million for the second quarter, compared to net income of $69 million in the year ago quarter.
- Global Monthly Active Users (MAUs) decreased 5% year over year to 433 million.
Viemed Healthcare, Inc.
All currency listed in thousands of US dollars
Selected highlights from their second quarter 2022 financial results on August 2, 2022
- Net revenue for the three months ended June 30, 2022, of $33,310, compared to Revenue of $27,399 for the same period last year.
- Net income of $967 for the three months ended June 30, 2022, compared to net income of $1,566 for the same period last year.
- Net revenue for the six months ended June 30, 2022, of $65,565, compared to Revenue of $55,815 for the same period last year.
- Net income of $2,729 for the six months ended June 30, 2022, compared to net income of $3,250 for the same period last year.
- Gross profit remains at 61%
- Through June 30, 2022, the Company repurchased and cancelled 1,350,567 common shares under the share repurchase program at a cost of $7.0 million, representing an average buyback price of $5.18 per share.
PayPal holdings, Inc.
All currency listed in millions of US dollars
Selected highlights from their second quarter 2022 financial results on August 2, 2022
- Revenue of $6,806 for a year over year growth of 9%.
- Operating cash flow of $1.5 billion, growing 12%, and free cash flow of $1.3 billion, growing 22%.
- Net loss of $341, compared to net income of $1,184 during the same period in 2021, for a year over year decrease of 129%. Not good!
- EPS of ($0.29) compared to $1.00 in Q2’21.
- Strong Balance Sheet with Cash, cash equivalents, and investments totaled $15.6 billion. Total debt of $10.6 billion.
- Free Cash Flow of $1.3 billion, increasing 22%.
Innovative Industrial Properties, Inc.
All currency listed in US dollars
Selected highlights from their second quarter 2022 financial results on August 3, 2022
- Revenues of approximately $70.5 million in the quarter, representing a 44% increase from the prior year’s quarter.
- Net income of approximately $39.9 million for the quarter.
- Paid a quarterly dividend of $1.75 per common share, representing a 25% increase over the prior year’s second quarter 2021 dividend, equal to an annualized dividend of $7.00 per share.
Datadog, Inc.
All currency listed in thousands of US dollars
Selected highlights from their second quarter 2022 financial results on August 4, 2022
- Second quarter revenue grew 74% year-over-year to $406 million.
- Net loss for the three months ended June 30, 2022, was $4,879, compared to $9,362 in the same period last year.
- Net income for the six months ended June 30, 2022, was $4,859 compared to a net loss of $22,430 in the same period last year.
- As of June 30, 2022, had approximately 2,420 customers with Annual Re-occuring Revenue of $100,000 or more, an increase of 54% from 1,570 as of June 30, 2021.
FuboTV Inc.
All currency listed in millions of US dollars
Selected highlights from their second quarter 2022 financial results on August 4, 2022
- Revenue of $221.9, up 70% compared to $130.9 in the same quarter in 2021.
- Net loss in the second quarter was $116.3 compared to a net loss of $94.9 in the same quarter in 2021. This includes a $10.7 goodwill impairment charge associated with their gaming segment attributed to the decline in their market capitalization.
- Subscription revenue growth of 70% year-over-year. Ad revenue grew 32% year-over-year.
- Ended the quarter with a healthy liquidity position of $378.8 million in cash and short-term investments.
Lightspeed Commerce Inc.
All currency listed in millions of US dollars
Selected highlights from their first quarter 2023 financial results on August 4, 2022
- Revenue of $173.9, an increase of 50%.
- Subscription revenue of $73.6 million, an increase of 47%. Transaction-based revenue of $91.5 million, an increase of 62%
- Net loss of ($100.8), as compared to a net loss of ($49.3).
- Forecasts its second quarter revenue at US$178-US$183. For fiscal 2023, it expects revenue to be between $740 – $760, in line with its target organic subscription and transaction-based revenue growth rate of 35-40%.
Skyworks Solutions, Inc.
All currency listed in millions of US dollars
Selected highlights from their third quarter 2022 financial results on August 4, 2022
- Record Third Quarter Revenue of $1.233 Billion, up 10% year over year.
- Net income for the three months ended June 30, 2022, was $267.3, compared to $337.8 in the same period last year.
- Net income for the nine months ended June 30, 2022, was $973 compared to $1,172 in the same period last year.
- Guides to Double-Digit Sequential Revenue and Earnings Growth in the fourth quarter of fiscal 2022.
- Increases Quarterly Dividend by 11% to $0.62 Per Share
Trisura Group Ltd.
All currency listed in millions of Canadian dollars
Selected highlights from their second quarter 2022 financial results on August 4, 2022
- Gross premiums written of $642.2 compared to $363.5 in the second quarter 2021. An increase of 76.7%.
- Net income of $20.2 million in the quarter grew 19.6% compared to the second quarter 2021, driven by growth and profitable underwriting in Canada and the US.
- Earnings Per Share of $0.48 in Q2 2022 compared to $0.40 in Q2 2021.
- Return On Equity of 19.2% compared to 18.3% in Q2 2021, exceeding their mid-teens target despite significant growth.
BCE Inc.
All currency listed in millions of Canadian dollars
Selected highlights from their second quarter 2022 financial results on August 4, 2022
- Revenues of $5,861, up 2.9% from the second quarter 2021.
- Net earnings of $654, down 10.9% from the second quarter 2021.
- Cash flows from operating activities increased 3.9% to $2,597 compared to the second quarter 2021.
- declared a quarterly dividend of $0.92 per common share, payable on October 15, 2022, to shareholders of record at the close of business on September 15, 2022.
Progeny, Inc.
All currency listed in thousands of US dollars
Selected highlights from their second quarter 2022 financial results on August 4, 2022
- Quarterly Revenue of $195.0 Million, Reflecting 52% Growth Over the Prior Year Period.
- Net income of $8,768, a decrease of 53% as compared to $18.7 million. The lower net income was due primarily to the higher non-cash stock-based compensation expense, which was partially offset by the higher gross profit and operating efficiencies realized on our higher revenues, as well as a tax provision in the current period as compared to a tax benefit in the prior year.
- Net cash generated by operating activities for the second quarter of 2022 was $19.2 million, compared to net cash used by operating activities of $7.5 million in the prior year period.
- Working capital of approximately $211.5 million and no debt.
- Issues Revenue Guidance of $190.0 to $197.0 Million for the Third Quarter, Reflecting Growth of 55% to 61%.
Cloudflare, Inc.
All currency listed in US dollars
Selected highlights from their second quarter 2022 financial results on August 4, 2022
- Second quarter total revenue totaled $234.5 million, representing an increase of 54% year-over-year.
- Net loss was $63.5 million, compared to $35.5 million in the second quarter of 2021.
- Net cash flow from operating activities was $38.3 million, compared to $7.5 million for the second quarter of 2021. Free cash flow was negative $4.4 million, or 2.0% of total revenue, compared to negative $9.8 million, or 6.0% of total revenue, in the second quarter of 2021.
Telus Corporation
All currency listed in in millions of Canadian dollars
Selected highlights from their second quarter 2022 financial results on August 5, 2022
- Revenues of $4,401, an increase of 7.1% over the same period last year.
- Net income of $498 million increased by 45 per cent over the same period last year.
- Total mobile and Fixed customer growth of 247,000, up 24,000 over last year and our strongest second quarter on record.
- Declared a quarterly dividend of $0.3386 per share payable on October 3, 2022, to holders of record at the close of business on September 9, 2022. This quarterly dividend reflects an increase of 7.1% from the dividend declared one year earlier.
GDI Integrated Facility Services Inc.
All currency listed in millions of Canadian dollars
Selected highlights from their second quarter 2022 financial results on August 5, 2022
- Revenue was $526 for the three months ended June 30, 2022, an increase of $154, or 41%, over the second quarter of 2021, which is mainly the result of organic revenue growth of 11% and growth from acquisitions of 29%.
- Net income was $10 for the three months ended June 30, 2022, compared to $14 in the second quarter 2021.
- Revenue was $1,021 for the six months ended June 30, 2022, an increase of $265, or 35%, over the same period of 2021, which is mainly the result of organic revenue growth of 7% and growth from acquisitions of 27%.
- Net income was $17 million for the six months ended June 30, 2022, compared to $27 million in the same period of 2021.
Portfolio 2
Portfolio 2 for the week ended August 5, 2022: UP
- Guardant Health (NASD:GH) announced its Guardant Reveal product, a molecular residual disease test, can now be used by fee-for-service Medicare patients with stage 2 or 3 colorectal cancer whose testing is initiated within three months following curative intent therapy.
Activity
No significant activity to report this week.
Dividends
Dividends Received this week for the following companies:
Companies followed by DRIP (Dividend Re-Investment Plan) indicate additional shares were purchased with the dividend. Any cash leftover was added to the cash balance.
Canadian $
Bank of Nova Scotia (TSX:BNS) DRIP
US $
No US$ dividends this past week.
Quarterly Reports
Guardant Health, Inc.
All currency listed in US dollars
Selected highlights from their second quarter 2022 financial results on August 4, 2022
- Revenue of $109.1 million for the second quarter of 2022, an increase of 19% over the corresponding period of 2021.
- Gross margin was 66%, as compared to 68% for the corresponding prior year period.
- Net loss was $229.4 million for the second quarter of 2022, as compared to $97.6 million for the corresponding prior year period.
- Guardant Health continues to expect full year 2022 revenue to be in the range of $460 million to $470 million, representing 23% to 26% growth over full year 2021.
Chorus Aviation Inc.
All currency listed in thousands of Canadian dollars
Selected highlights from their second quarter 2022 financial results on August 4, 2022
- Revenue of $392,343 for the three months ended June 30, an increase of 96.3% over the same period last year.
- Net loss of $40.4 million, a quarter-over-quarter decrease of $61.9 million.
- Revenue of 734,723 for the six months ended June 30, an increase of 82.6% over the same period last year.
- Net loss of $17.5 million, an increase of $0.9 million compared to the same period last year.
Telus Corporation
All currency listed in in millions of Canadian dollars
Selected highlights from their second quarter 2022 financial results on August 5, 2022
- Revenues of $4,401, an increase of 7.1% over the same period last year.
- Net income of $498 million increased by 45 per cent over the same period last year.
- Total mobile and Fixed customer growth of 247,000, up 24,000 over last year and our strongest second quarter on record.
- Declared a quarterly dividend of $0.3386 per share payable on October 3, 2022, to holders of record at the close of business on September 9, 2022. This quarterly dividend reflects an increase of 7.1% from the dividend declared one year earlier.
Brookfield Renewable Partners L.P.
All currency listed in millions of US dollars
Selected highlights from their second quarter 2022 financial results on August 5, 2022
- Revenues of $1,274 for the three months ended June 30, 2022, compared to $1,019 for the same period in 2021.
- Net income of $122 for the three months ended June 30, 2022, compared to $110 for the same period in 2021.
- Revenues of $2,410 for the six months ended June 30, 2022, compared to $2,039 for the same period in 2021.
- Net income of $155 for the six months ended June 30, 2022, compared to $55 for the same period in 2021.
Brookfield Infrastructure Partners L.P.
All currency listed in millions of US dollars
Selected highlights from their second quarter 2022 financial results on August 3, 2022
- Revenues of $3,681 for the three months ended June 30, 2022, compared to $2,663 for the same period in 2021.
- Net income of $425 for the three months ended June 30, 2022, compared to $1,306 for the same period in 2021.
- Revenues of $7,092 for the six months ended June 30, 2022, compared to $5,346 for the same period in 2021.
- Net income of $719 for the six months ended June 30, 2022, compared to $1,719 for the same period in 2021.
- Declared a quarterly distribution in the amount of $0.36 per unit, payable on September 29, 2022, to unitholders of record as at the close of business on August 31, 2022. This distribution maintains the 6% increase over the prior year but reflects an adjustment for the 3-for-2 unit and share split that took place in June 2022.
Portfolio 3
Portfolio 3 for the week ended August 5, 2022: UP
- Shopify (TSX:SHOP) has entered into a partnership with Klaviyo. Shopify will invest in Klaviyo to enhance collaboration between the two partners. In return, Klaviyo will become an email solution provider for Shopify’s Plus program.
Activity
No significant activity to report this week.
Dividends
Dividends Received this week for the following companies:
Companies followed by DRIP (Dividend Re-Investment Plan) indicate additional shares were purchased with the dividend. Any cash leftover was added to the cash balance.
Canadian $
Toronto-Dominion Bank (TSX:TD)
US $
No US$ dividends this past week.
Quarterly Reports
Viemed Healthcare, Inc.
All currency listed in thousands of US dollars
Selected highlights from their second quarter 2022 financial results on August 2, 2022
- Net revenue for the three months ended June 30, 2022, of $33,310, compared to Revenue of $27,399 for the same period last year.
- Net income of $967 for the three months ended June 30, 2022, compared to net income of $1,566 for the same period last year.
- Net revenue for the six months ended June 30, 2022, of $65,565, compared to Revenue of $55,815 for the same period last year.
- Net income of $2,729 for the six months ended June 30, 2022, compared to net income of $3,250 for the same period last year.
- Gross profit remains at 61%
- Through June 30, 2022, the Company repurchased and cancelled 1,350,567 common shares under the share repurchase program at a cost of $7.0 million, representing an average buyback price of $5.18 per share.
Cloudflare, Inc.
All currency listed in US dollars
Selected highlights from their second quarter 2022 financial results on August 4, 2022
- Second quarter total revenue totaled $234.5 million, representing an increase of 54% year-over-year.
- Net loss was $63.5 million, compared to $35.5 million in the second quarter of 2021.
- Net cash flow from operating activities was $38.3 million, compared to $7.5 million for the second quarter of 2021. Free cash flow was negative $4.4 million, or 2.0% of total revenue, compared to negative $9.8 million, or 6.0% of total revenue, in the second quarter of 2021.
Telus International
All currency listed in millions of US dollars
Selected highlights from their second quarter 2022 financial results on August 5, 2022
- Revenue of $624 million for the three months ended June 30, 2022, up 17% year-over-year and 21% on a constant currency basis.
- Net income of $56 million for the three months ended June 30, 2022, compared with $16 million in the same quarter last year.
- Revenue of $1,223 million for the six months ended June 30, 2022, up 18% year-over-year.
- Net income of $90 million for the three months ended June 30, 2022, compared with $19 million for the same period last year.
- For the full year, management has suggested revenue in the range of $2,550 to $2,600 million, representing growth of 16.2% to 18.5% on a reported basis, and growth of 20% to 22% on a constant currency basis (previously 19% to 21% on a constant currency basis).
GDI Integrated Facility Services Inc.
All currency listed in millions of Canadian dollars
Selected highlights from their second quarter 2022 financial results on August 5, 2022
- Revenue was $526 for the three months ended June 30, 2022, an increase of $154, or 41%, over the second quarter of 2021, which is mainly the result of organic revenue growth of 11% and growth from acquisitions of 29%.
- Net income was $10 for the three months ended June 30, 2022, compared to $14 in the second quarter 2021.
- Revenue was $1,021 for the six months ended June 30, 2022, an increase of $265, or 35%, over the same period of 2021, which is mainly the result of organic revenue growth of 7% and growth from acquisitions of 27%.
- Net income was $17 million for the six months ended June 30, 2022, compared to $27 million in the same period of 2021.
Brookfield Renewable Partners L.P.
All currency listed in millions of US dollars
Selected highlights from their second quarter 2022 financial results on August 5, 2022
- Revenues of $1,274 for the three months ended June 30, 2022, compared to $1,019 for the same period in 2021.
- Net income of $122 for the three months ended June 30, 2022, compared to $110 for the same period in 2021.
- Revenues of $2,410 for the six months ended June 30, 2022, compared to $2,039 for the same period in 2021.
- Net income of $155 for the six months ended June 30, 2022, compared to $55 for the same period in 2021.