Connections. Its amazing events are connected to other events. While Covid-19 is still present in North America, it has already caused one European country to go into lockdown to stop the spread of the virus (Austria), and at least one other European country to consider a lockdown (Germany). The connection between Covid-19 and travel stocks is pretty straightforward, the higher the rate of infection the lower the share prices of travel stocks, like airlines, as people are less likely to travel when the infection rate is high. What is not so obvious is the connection to oil prices. Less demand for airline travel means less demand for jet fuel, but also there is less car travel as more people work from home and make less car trips which means less demand for gasoline.
For more on connections, or rather interconnections, check out American Tower in Companies on the Radar.
Market News
Despite better-than-expected retail data in September from Statistics Canada, the Toronto Stock Exchange (TSX) ended lower for the week. A surge in Covid-19 cases in Europe caused Austria to become the first European country to impose a full Covid-19 lockdown. The lockdown caused the demand for oil to drop, which led to low oil prices which in turn caused a slump in energy companies. During the week, the TSX rose on rumours the US government was moving forward on legalization of cannabis but then quickly retreated as attempts to move legalization forward faltered. As well, profit taking in gold stocks caused resource sectors stocks to weaken. On the upside, the technology sector continued to gain throughout the week but not enough to offset the slump in resource and energy stocks.
The rise in Covid-19 cases in Europe negatively impacted oil stocks as well as travel stocks, to the benefit of technology and stay-at-home stocks. The Nasdaq Composite Index (Nasdaq) and the S&P 500 (S&P) finished up for the week, powered by technology stocks such as Apple (strong sales expectations going into the America’s Black Friday week), Intuit (strong earnings report which led to increased estimates for next quarter) and Nvidia (strong earnings report). The Dow Jones Industrial Average (DJIA) finished down for the week on the fears of rising Covid-19 cases in Europe.
A bit of good news, retail companies generally had strong earnings for the third quarter period as shoppers returned to stores. A good sign for next week’s Black Friday shopping frenzy, followed by Christmas shopping.
Portfolio News
A mixed bag for the three portfolios the past week with Portfolio 3 finishing in positive territory and the other two losing ground. None of the three portfolios beat the gains of the S&P or the Nasdaq indexes, but they all did better than the TSX and the DJIA. Portfolio 3 has the highest percentage of technology stocks so with the technology heavy Nasdaq and the technology segment of the S&P having strong weeks, it makes sense it would perform the best. It was a mixed week for Portfolio 2 with its two big technology stocks, MongoDB and Microsoft, preventing it from further losses. Finally, Portfolio 1 had a few strong performances for the week, but it was a small group of strong performers while most of the stocks in the portfolio drifted sideways or fell. Either way, I am not worried about a 1-week performance.
Companies on the Radar
This week I looked at American Tower (NYSE:AMT), a global real estate investment trust (REIT) that owns, operates, and develops wireless and broadcast communications real estate. They are a Fortune 500 company with over 219,000 properties throughout the world. They recently announced a deal to acquire CoreSite Realty Corporation (NYSE:COR). Coresite Realty currently owns and operates 25 data centres in 8 large US markets.
With the rollout for 5G wireless technology, and future wireless technologies, comes the need for increased communications towers and interconnections between communications towers and traditional wired networks which in turn connect to data centres. The recent proposal would allow American Tower to benefit from the convergence and growth of wireline and wireless networks. Both companies expect the combined entity to be well-positioned to address the evolving needs of their customers (network and cloud providers, service integrators and enterprise customers). The deal was approved by both boards of directors so the deal should be successfully completed.
Another company I am considering is Marqeta (NASD:MQ), a new style of ‘money movement card’ they are calling Modern card issuing. Marqeta utilizes cloud technology to allow companies to quickly provide physical and digital prepaid, debit and credit cards to their customers (other businesses) who in turn can issue modern cards to their customers for Buy Now, Pay Later lending; to employees as travel and expense cards; and to suppliers for faster payments. Marqeta has integrated their cards with issuing banks and utilizes the networks of other card providers (Visa and Mastercard). Their cards can also handle cryptocurrency transactions and be integrated with mobile wallets.
I’m still considering adding shares in Roku (NASD:ROKU), Nvidia (NASD:NVDA), and Unity Software (NYSE:U) but it I may have waited too long on Nvidia and Unity.
Portfolio Update
Portfolio 1
Portfolio 1 for the week ended November 19, 2021: DOWN 
Both Home Depot and Nvidia had great earnings reports which saw their respective share prices move upward accordingly. I was pleased to see Rivian is still in positive territory. I expect the share price will randomly visit highs and lows until it starts to produce vehicles and, more importantly, revenue. The on again, off again Apple car seems to be back on, causing Apple shares to reach a record high. The Canadian technology companies Lightspeed Commerce and Nuvei continued to fall even though I do not see any reason specific to either company for the fall in their respective share prices. For now, I will just monitor both to see if there is an underlying reason. Celsius Holdings (energy drink maker) had a 10% drop this week as investors reacted to a decline in earnings for the third quarter, even though revenues were up considerably. Celsius explained this had to do with supply chain issues regarding the access to the tin required for their drink cans. With a 50+% upside, might be a good time to buy more shares.
Activity
Bought Marqeta (NASD:MQ) Technology companies are riding the tailwinds of the move to a digital world, especially financial technology companies (also known as fintech companies), as they upend the old way of doing things. I was attracted to Marqeta because its founder led and looks to be a disrupter in the payment card industry. It did double its revenue from fiscal 2019 to fiscal 2020 and its possible it could double from 2020 to fiscal 2021. Its still losing money but that is to be expected from growing companies as they plow their earnings back into the company to continue to build the business.
As the world continues to move to digital transactions, I can see Marqeta being a market leader in this ‘modern’ payment card space. It is a bit of a risk getting in early but if I am correct, the company’s earnings could take off, along with the share price.
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 $
Automotive Properties Real Estate Investment Trust (TSX:APR.UN) DRIP
US $
BSR Real Estate Investment Trust (TSX:HOM.U)
Quarterly Reports
Auxly Cannabis Group Inc (TSX:XLY)
Selected highlights from their third quarter 2021 financial results on November 15, 2021
- Total net revenues of $24.5 million for the three months ended September 30, 2021, improved by approximately 95% year over year and 17% sequentially.
- #1 licensed producer with 15.6% market share in third quarter, 2021
- Net loss of $18,084,000 for the three months ended September 30, 2021, slightly better than a net loss of $18,937,000 for the same period in 2020. Net loss of $16,002 for the nine months ended September 30, 2021, compared to a net loss of $62,641 for the same period in 2020.
Greenlane Holdings Inc. (NASD:GNLN)
Selected highlights from their third quarter 2021 financial results on November 15, 2021
- Net sales were $41.3 million in Q3 2021, compared to $35.8 million in Q3 2020, an increase of $5.6 million, or 16%
- Adjusted gross profit was $8.8 million, or 21.3% of net sales in Q3 2021, compared to $7.8 million, or 22.4% of net sales in Q2 2021
- Net loss increased to $28,715 for the 3 months ended September 30, 2021, compared to a net loss of $13,793 for the same period in 2020
Voyager Digital (TSX:VOYG)
Selected highlights from their first quarter 2022 financial results on November 16, 2021
- Revenue for the quarter is $65.6 million for the historical business plus the $15.9 million from the Coinify business, totaling $81.5 million. The $65.6 million in revenue is up over 3,280% compared to $2 million for the quarter ended September 30, 3020
- Operating Loss of $28.3 million for the quarter was incurred for strategic longer-term benefit, which has paid off and been reversed in the current quarter. Losses incurred were primarily due to investing in the loyalty and rewards program to continue user growth
- Total verified users on the platform stand at more than 2.15 million, up 23% from 1.75 million at fiscal year fiscal year ended June 30, 2021
- Total funded accounts exceed 860,000, up 29% from 665,000 at fiscal year ended June 30, 2021
Home Depot (NYSE:HD)
Selected highlights from their third quarter 2022 financial results on November 17, 2021
- Sales of $36.8 billion for the third quarter of fiscal 2021, an increase of $3.3 billion, or 9.8 percent from the third quarter of fiscal 2020.
- Net earnings for the third quarter of fiscal 2021 were $4.1 billion compared with net earnings of $3.4 billion in the same period of fiscal 2020.
- Earnings per diluted share increased to $3.92, compared to $3.18 per diluted share in the same period of fiscal 2020, an increase of 23.3 percent.
- Declared a third quarter cash dividend of $1.65 per share, the 139th consecutive quarter the company has paid a cash dividend.
Sea Ltd (NYSE:SE)
Selected highlights from their third quarter 2021 financial report on November 16, 2021
- Total GAAP revenue was US$2.7 billion, up 121.8% year-on-year
- Total gross profit was US$1.0 billion, up 147.5% year-on-year
- An adjusted loss of $0.84 per share, wider than the loss of $0.69 per share a year ago
- GAAP revenue was US$1.1 billion, up 93.2% year-on-year for Garena, the digital entertainment business
- GAAP revenue was US$1.5 billion, up 134.4% year-on-year for Shopee, the e-commerce business
- Total payment volume for their SeaMoney mobile wallet was US$4.6 billion for the third quarter of 2021, an increase of 111% year-on-year
Nano-X Imaging (NASD:NNOX)
Selected highlights from their third quarter 2021 financial results on November 17, 2021
- For the three months ended September 30, 2021, the Company reported a net loss of $13.5 million, compared to a net loss of $11.1 million for the same period in 2020, largely due to an increase in research and development expenses and general and administrative expenses, which were mitigated by a decrease in marketing expenses.
- For the nine months ended September 30, 2021, the Company reported a net loss of $39.9 million, compared to a net loss of $24.8 million for the same period in 2020,
- Ended the third quarter with cash and marketable securities of $180.3 million
Nvidia (NYSE:NVDA)
Selected highlights from their third quarter 2022 financial results on November 17, 2022
- Record revenue of $7.10 billion, up 50 percent from a year earlier and up 9 percent from the previous quarter.
- GAAP earnings per diluted share for the quarter were $0.97, up 83 percent from a year ago and up 3 percent from the previous quarter.
- NVIDIA’s outlook for the fourth quarter of fiscal 2022 includes:
- Revenue is expected to be $7.40 billion, plus or minus 2 percent.
- GAAP and non-GAAP gross margins are expected to be 65.3 percent and 67.0 percent, respectively, plus or minus 50 basis points.
ZIM Integrated Shipping Services Ltd. (NYSE:ZIM)
Selected highlights from their third quarter 2021 financial results on November 17, 2021
- Net income for the third quarter of 2021 was $1.46 billion, compared to $144 million in the third quarter of 2020, a year-over-year increase of 913%
- Revenues for the third quarter of 2021 were $3.14 billion, compared to $1.01 billion in the third quarter of 2020, a year-over-year increase of 210%
- Total revenues were $7.26 billion for the first nine months of 2021, compared to $2.63 billion for the first nine months of 2020
- Net income for the first nine months of 2021 was $2.94 billion, compared to $158 million for the first nine months of 2020
- Transitioned to Quarterly Dividend Payout, Declared Q3 2021 Dividend of $2.50 per Share, Representing Approx. 20% of Quarterly Net Income
Portfolio 2
Portfolio 2 for the week ended November 19, 2021: DOWN
While the majority of companies in this portfolio continue to drift higher, it is the technology companies, particularly MongoDB and Microsoft that are the powering the growth of this portfolio.
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 $
Summit Industrial Income REIT (TSX:SMU.UN)
US $
No US$ dividends this past week.
Portfolio 3
Portfolio 3 for the week ended November 19, 2021: UP 
I always get suspicious when a company does not highlight its sales or earnings in its quarterly earnings report as this usually indicates it was not a good quarter for the company. Real Matters was not the exception. Unfortunately, there was no explanation why sales and net income are down. Good thing I have a buy and hold philosophy. However, that does not mean I will not be watching the company to see improvement over the next few quarters.
Once again Shopify had another great week. It was not such a great week for the Ethereum cryptocurrency.
| Purchase Price (Nov. 10, 2021) | Current Price (Nov. 20, 2021)* | % change |
| $6137.23 | $5621.07 | – 9% |
* Cryptocurrencies trade 24/7 so prices are always changing.
Activity
No activity to report
Dividends
Dividends Received this week for the following companies:
Companies followed by DRIP (Dividend Re-Investment Plan) indicate additional shares were purchased with the dividend. Any cash leftover was added to the cash balance.
No dividends this week
Quarterly Reports
Portfolio comments
Real Matters Inc. (TSX:REAL)
Selected highlights from their fourth quarter Fiscal 2021 financial results on November 17, 2021
- Fourth quarter revenues of US$ 125.6 million, up .9% compared to US$ 124.4 million for the same period in 2020
- Fiscal 2021 revenues of US$504.1 million, up 10.6%, compared to US$ 455.9 million for fiscal 2020
- Fourth quarter net income of US$ 9.1 million, down 28.3% compared to US$ 12.7 million for the same period in 2020
- Fiscal 2021 net income of US$ 33.1 million, down 22.7% compared to US$ 42.8 million, for fiscal 2020