You may have heard the S&P 500 Index (S&P) is having another banner year, with a total return of 26%, year to date. Sounds great. But look a bit closer and, per David Kostin at Goldman Sachs, you’ll see over 33% of the S&P’s gains in 2021 have come from 5 very large companies (based on market capitalization) – Apple Inc. (NASD:AAPL), Microsoft Corp. (NASD:MSFT), NVIDIA Corp. (NYSE:NVDA), Tesla Inc. (NASD:TSLA) and Alphabet (NASD:GOOGL). Since April 2021, they have provided 51% of the S&P’s gain. This is great if you have invested in these 5 companies. However, when a handful of companies are providing the bulk of the S&P gains, known as a narrow market, this is not a good sign since there is a lower volume of overall trading occurring. Investors that are trading, are trading in the bigger, better-known companies causing these companies to rise and giving the impression all is well with the Index and markets when it really is not. When the market narrows Investors should be prepared for increased volatility in the months ahead, especially if one or more of the big 5 and other well-known companies stumbles. As a long-term investor, I see this volatility as a buying opportunity since the share price of most companies I am interested in have dropped, some considerably. Assuming nothing has changed fundamentally with these companies, this is an opportunity to either add shares of existing companies or make an initial investment in other companies while their shares are on ‘sale.’ So, let us see how the big 5 drove the markets this past week and the impact they had on each of the portfolios.

Weekly Market Review

Monday: What the market giveth, the market taketh away. Last Friday investors moved back into travel stocks, sending the S&P to a record high. Today, more worries about the Covid-19 variant, Omicron, and how quickly it was spreading caused investors to flee those same travel stocks. The other issue this week is what will the US Federal Reserve when they meet later this week about interest rates. Will interest rates remain the same or will they go up? Uncertainty caused by both issues caused the four major North American Indexes – Toronto Stock Exchange Composite Index (TSX), S&P 500 (S&P), Dow Jones Industrial Average (DJIA) and Nasdaq Composite Index (Nasdaq) – to pullback.

Tuesday: The US Labor Department’ producer price index (PPI) jumped to 9.6% for the last twelve months through November, thanks to supply chain challenges. It was the PPI’s largest gain since 2010. With the US Federal Reserve Board meeting Wednesday this likely means interest rates will rise sooner rather than later. The double whammy of the spectre of rising inflation leading to higher interest rates, and ongoing concerns about Covid-19’s fast spreading Omicron variant continues to play the Grinch to the market’s Santa Rally. All four of the Indexes fell with the TSX stretching its losing streak to 5 days. In another ominous sign, some of the biggest companies on the Nasdaq Exchange (Apple, Alphabet, Microsoft, and others) all fell today. Its not a good sign when the big boys fall.

Wednesday: As expected, the US Federal Reserve (Fed) indicated it would start raising interest rates in early 2022, removing the uncertainty that had been haunting the markets. Once the Fed announced they would exit policies enacted at the start of the pandemic, all four markets rose and ended the day in positive territory. Technology stocks were the big winners on the day, lifting the technology heavy Nasdaq and S&P the most, followed by the DJIA with the TSX bringing up the rear. In Canada, inflation remained at 4.7% in November, an 18 year high, thanks to ongoing supply chain issues.

Thursday: Wednesday’s rise was short lived with all four Indexes down on Thursday as the realization of increasing interest rates sunk in with investors. Higher interest rates are good for banks but not so good for companies with high levels of debt, like technology growth companies. Consequently, the technology heavy Nasdaq, and to a lesser extent the S&P, took it on the chin while the DJIA ended the day barely in negative territory. In Canada, the TSX marginally declined on losses in the technology sector offset by gains in mining stocks.

Friday: Fears of Omicron and what, if any, restrictions will be introduced and how those restrictions will impact the economy continued to weigh on all four Indexes. They each were down for the day as well as finishing the week in negative territory. In addition to Omicron fears, technology Investors were still contemplating the US Federal Reserve signaling higher interest rates were coming in 2022. The ‘big 5’ (Apple, Microsoft, Nvidia, Tesla and Alphabet) were all down for the day and the week, dragging the S&P and Nasdaq down. Hopefully the 2-day rally at the beginning of the previous week was not the extent of the 2021 Santa Rally.

Weekly Portfolio Review

With all four of the Indexes on the losing side for the week it was a surprise to see Portfolio 2 squeak out a gain for the week. Of the three portfolios it’s probably the most balanced so despite a down week for Microsoft and an essentially flat week for MongoDB (NASD:MDB) and its other technology stocks, the other sectors were able to carry the portfolio for the week. Portfolio 2 is a good example of the benefits of a diversified portfolio. On the other hand, Portfolio 3 is heavily into the technology sector, in particular Shopify, so with the tech heavy Nasdaq down the most of the four Indexes it makes sense Portfolio 3 is down the most of the portfolios. Portfolio 1 has approximately 33% of its companies in the technology sector but it also has diversification across eight other sectors which did not suffer as much as the technology sector.

Hopefully, with certainty of upcoming interest rate hikes in 2022, the markets will end the year with a Santa Claus Rally. However, the shadow of the Omicron virus looms in the background. Will Omicron play Grinch to the Portfolios Whoville?

Companies on the Radar

With the markets continuing to downward trend, I have been sitting on the sidelines waiting for a bottom to form. I would like to see a broad and sustained rally (3 – 5 days) before re-entering the markets. During the week I took a quick look at a few companies and three that impressed me the most were:

• Alphabet (NASD:GOOGL)
• American Tower (NYSE:AMT)
• Matterport (NASD:MTTR)

During the upcoming weeks I plan to take a closer look at these companies to be ready for when the markets bottom out. I am also going to take look at existing holdings to see if it would be better to invest in these companies that have proven themselves and continue to have strong growth potential.

Portfolio Update

Portfolio 1

Portfolio 1 for the week ended December 17, 2021: DOWN

Of the ‘big 5’ mentioned in the opening of this post, Portfolio 1 holds both Apple, Nvidia and Tesla shares. While Apple flirted with all time highs the previous week, it joined Tesla and Nvidia as they continued their respective downward drifts. With three of the most popular stocks in the S&P falling its not surprising that the majority of companies in this portfolio also ended the week in the red.

During their third quarter presentation, Rivian (NASD:RIVN) reported production challenges brought on by supply chain issues caused to miss their 2021 production goal. As a result, the stock opened below the USD $100 barrier for the first time since the company went public in November. I knew it couldn’t stay over $100 per share but hopefully it won’t stay below $100 for long. I was pleased to see Rivian has picked some coverage by analysts. The research section of the TD WebBroker site shows it is covered by 14 analysts with a 12-month price target range from USD $94 – USD $170, and an average of USD $134.

On a positive note, Datadog (NASD:DDOG) will be added to the Nasdaq 100 Index on Dec. 20, 2021. All ETFs and Mutual Funds that track the Nasdaq 100 Index must purchase Datadog stocks to maintain the same composition as the Index.

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 $

Automotive Properties Real Estate Investment Trust (TSX:APR.UN) DRIP

Yellow Pages Ltd (TSX:Y)

US $

BSR Real Estate Investment Trust (TSX:HOM.U)

Skyworks Solutions Inc (NASDAQ:SWKS)

Home Depot Inc (NYSE:HD)

Quarterly Reports

Enwave Corporation

All currency listed in CAD dollars

Selected highlights from their fourth quarter 2021 financial results on December 15, 2021

Fourth quarter highlights (expressed in ‘000s):

• Consolidated revenue of $6,906 compared to $7,351 in Q3 2021 and $10,784 in Q4 2020
• Gross margin was 34% compared to 20% for Q4 2020, a major increase due to the confirmation of their higher margin REV™ machine sales during the period.

Rivian Automotive Inc

All currency listed in USD dollars

Selected highlights from their third quarter 2021 financial results on December 16, 2021

• Net loss of $1.2 billion compared to a net loss of $288 million in the same period last year.
• Free cash flow was negative $1.1 billion.
• 48,000 pre orders of the R1 truck at the end of the third quarter. As of December 15, 2021 approximately 71,000 pre orders.
• Will start construction of a second manufacturing plant in Georgia in summer 2022. This facility will have the capacity to produce 400,000 vehicles annually when it comes online in 2024.

Portfolio 2

Portfolio 2 comments or the week ended December 17, 2021: UP

Of the ‘big 5’ mentioned in the opening, Portfolio 2 contains one of the big technology stocks – Microsoft. Although Microsoft was down for the week, the other technology companies in the portfolio managed to hang hold their ground for the week. Thanks to analysts raising the share price targets for MongoDB, the stock had a strong Friday to bring it back to the price level where it started the week. Meanwhile, Fortis (TSX:FTS), a utility company gained ground. Most of the nontechnology stocks either held their ground or were up enough for the week to offset the losses of the technology stocks. It was a good reminder of the reason to be diversified across different sectors.

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 $

Alimentation Couche-Tard Inc (TSX:ATD)

iA Financial Corporation Inc (TSX:IAG)

US $

No US$ dividends this past week.

Quarterly Reports

No quarterly reports this week.

Portfolio 3

Portfolio 3 comments for the week ended December 17, 2021: DOWN

Like Portfolio 2, Portfolio 3 contains one of the big technology stocks – Microsoft. The three companies that had been driving Portfolio 3 – Microsoft, Shopify (TSX:SHOP) and Cloudflare (NYSE:NET) – all saw their respective share prices fall. Leading cybersecurity company Cloudflare started the week strong but on Tuesday fell almost 10%, on fears of higher interest rates, before bouncing up and down for the rest of the week. Shopify is the largest holding in Portfolio 3 so when it has a down week, its usually not a good week for Portfolio 3 and this was no exception.

Crypto update: Ethereum bought at CAD $6,137.23 per coin. On December 17, it was trading at CAD $5,015.40. Timing was terrible but unlike last time, I will hold onto the .028 of an Ethereum coin rather than lock in a loss.

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 past week.

Quarterly Reports

Enghouse System Ltd. 

All currency listed in CAD dollars

Selected highlights from their fourth quarter 2021 financial results on December 16, 2021

For the year ended October 31, 2021

• Revenue for the year was $ 467.2 million, compared to revenue of $ 503.8 million in the prior year when Enghouse recognized a huge surge in revenue from the onset of the COVID-19 pandemic.
• Net income for the year was $92.8 million compared to $98.6 million for 2020.

For the fourth quarter ended October 31, 2021:

• Revenue for the fourth quarter was $ 113.1 million, a decrease of $7.8 million or 6.5%, compared to revenue of $ 120.9 million in the same period in 2020. This decrease was a result of customers right sizing their hosted services requirements, and losses attributed to foreign exchange.
• Net income for the fourth quarter was $30.2 million compared to $29.4 million for the same period in 2020.

 

Ho, ho, ho. The Santa Claus rally may be just around the corner. Usually, though not every year, there is a lift to the markets in late December. There are many theories to the Santa Claus rally but there all just that – theories. From extra cash on hand thanks to unloading losing investments for tax purposes and/or receiving ‘new’ money in the form of year end bonuses, to a general upbeat mood because of the season and optimism heading into a new year, to large institutional investors taking time off leaving the markets open to individual investors who generate their own fear of missing out on the Santa rally momentum. Whatever the explanation, investors seem to want to get back into the markets to get their money working for them. Hopefully, we saw our first glimpse of a Santa rally earlier this past week and there is no Grinch plotting to take the joy out of the Christmas season.

Weekly Market Review

Monday: Optimistic comments about the latest Covid – 19 variant, Omicron, helped lift all four major North American Indexes – Toronto Stock Exchange (TSX), S&P 500 (S&P), Dow Jones Industrial Average (DJIA) and Nasdaq Composite Index (Nasdaq). The DJIA rose nearly 2% on the strength of investors moving back into travel stocks, especially airline companies. Was this the first signs of a Santa rally?

Tuesday: As fears of Omicron eased, in part due to news that GlaxoSmithKline’s covid-19 treatment works against all Omicron mutations, money headed back into the markets on both sides of the border. On the TSX Index, the energy and the technology shares were the big winners. In economic news, Canada posted its largest trade surplus in nearly 10 years. South of the border, technology stocks sent the S&P and Nasdaq Indexes up 2+%, while the DJIA was lifted by investors moving gradually back into travel companies.

Wednesday: After a bullish 2 days, the TSX had a slight pullback on hump day, with technology stocks shouldering most of the blame. Hopefully, the Santa Claus rally will continue after a brief respite. The Bank of Canada left overnight interest rates at .25% but suggested a rate hike in mid 2022. Down south, all three indexes were up slightly for the day, with the Nasdaq leading the way. Once again Omicron related news impacted the travel stocks. News that the Pfizer vaccine offered some protection against the Omicron variant caused investors to jump back into the travel stocks such as airlines and cruise lines.

Thursday: The combination of tax loss selling and taking profits after the surge earlier in week caused the TSX to fall for a second straight day. In the US, the DJIA was the winner for the day because it remained flat while the S&P and Nasdaq both were down for the day. As with the TSX, fears of Omicron and its impact on the markets caused investors to take profits after the early week surge. The markets are being bounced around every time more information on covid-19 comes out. On bad news about covid-19, Mr. Market retreats. On positive news about vaccines, Mr. Market advances.

Friday: It was a mixed day for the TSX on Friday. On the downside, the TSX fell for a third straight day. On the upside, it still posted a gain for the week thanks to gains earlier in the week. In the US, the S&P had its best week since early February and ended this week by closing at an all time high, with the technology sector being the big winner in Friday trading. Both the DJIA and the Nasdaq also had a good day on Friday and for the week. The big news in the US was inflation in America rose as expected, to 6.8%, the highest in the last 39 years. Because this inflation rate was telegraphed well in advance of today’s announcement, the markets seemed to carry on as normal. If the inflation rate had been higher its likely the US Federal Reserve would’ve started tightening the belt sooner rather than later, leading to increased interest rates. Increased interest rates are not good for companies carrying a lot of debt.

Weekly Portfolio Review

Portfolio 2 was clearly the big winner this past week, matching the 4% gain of the DJIA. Portfolio 3 was not able to beat any of the American Indexes but did squeak past the TSX. Bringing up the rear was Portfolio 1 which nominally broke even for the week, but technically fell a few dollars short of the start of the week amount. I choose to look at the glass half full side and consider Portfolio 1 to have broken even for the week. 😊 I did add a new company to Portfolio 1 but that is a pure income play so I don’t expect that to add to the growth of the portfolio. There are a few companies on the radar this week and I hope to find one or two that could provide some boost for the portfolio.

Companies on the Radar

The end of Earnings season finally gave me a chance to consider a few new companies.

Nelnet (NYSE:NNI): An American based company that operates in four business segments: Business Services; Communication Services; Financial Services; and Diversified Services (Professional Services). A mid cap, mini conglomerate if you will.

Expensify (NASD:EXFY): A cloud-based expense management solution that use artificial intelligence to take the pain out of managing employee expenses, from small business through to the largest organizations.

Matterport (NASD:MTTR): A leading spatial data platform to digitize any type of space (workspace, home areas, offices, etc.) to better design, build, promote and manage spaces. This product can be used across multiple industries including real estate, architecture, engineering, construction, and facilities management. Could be a good play into the metaverse, one of the latest technology buzzwords.

Alphabet (NASD:GOOGL): Google has 93% of the search market and 76% of the online streaming market, through it’s YouTube business. It also has a multitude of cloud-based services as well as the most popular smartphone operating system in Android (75% of the global market). Shareholders of GOOGL having voting rights while GOOG shareholders have no voting rights, otherwise they are essentially the same. I don’t know why, but GOOGL is a few bucks cheaper than GOOG. I would’ve thought the non-voting shares would be cheaper.

American Tower (NYSE:AMT): owns and operates communications properties, including antenna towers and data centres. Should be well positioned for the rollout of 5G technology which requires lots of wifi antennas.

I still like the idea of adding to Unity Software (NYSE:U) so the question becomes are any of the above companies a better investment than investing again in Unity Software, or another company in any of the portfolios.

Portfolio Update

Portfolio 1

Portfolio 1 for the week ended December 10, 2021: Break even

Another mixed bag for Portfolio 1. Many of the technology stocks had a rough week, especially the Canadian technology companies Nuvei (TSX:NVEI) and Lightspeed Commerce (TSX:LSPD). On Wednesday, a report came out charging Nuvei “covered up a series of business failures, a lack of organic growth and business ties with individuals linked to fraudulent activities”, causing the share price to drop over 40%. The share price has since started to recover but is still well off its Tuesday closing price of over CAD $120. I sense a buying opportunity.

Lightspeed still falls under the shadow of a class action lawsuit that claim Lightspeed made “false and/or misleading statements.”

On the positive side, the semiconductor companies – Nvidia (NASD:NVDA), Lattice Semiconductor (NASD:LSCC) and Skyworks Solutions (NASD:SWKS) – continue to outperform and pick up the slack of their Canadian technology counterparts.

Activity

Bought: Brookfield Select Opportunities Income Fund (TSX:BSO.UN) I first heard about this company in early 2021 and couldn’t believe this stock paid a 10% dividend. Usually, a dividend that high suggests a failing company, or to good to be true. However, I did a bit of due diligence and discovered it was run by Brookfield Asset Management, a good sign, and the fund invested in high yield corporate debt and publicly listed equity securities of infrastructure and real estate companies. Because this fund is made up of numerous bonds and other fixed income assets it will act as part of the bond component of this portfolio. With Brookfield managing the fund I’m comfortable it will do fine, and I won’t need to keep an eye on it. It will further diversify the portfolio and lessen the overall volatility of the portfolio, plus, a relatively secure 10% dividend is much better than sitting in a bank account earning less than 1%.

I first bought shares back in May and I’ve been telling others about this fund since then. Each time I mentioned BSO I kept thinking “why don’t I buy more of this?” So, I finally bought shares for this portfolio. With a 10% dividend, as long as the fund maintains the price, I paid I’ll be happy. If the share price increases that will be a bonus.

Dividends

Dividends Received this week for the following companies:

Canadian $

No CAD$ dividends this past week.

US $

Visa Inc. (NYSE:V)

Quarterly Reports

No quarterly reports this past week.

Portfolio 2

Portfolio 2 for the week ended December 10, 2021: UP

Portfolio 2 continues to be driven by MongoDB (NASD:MDB) with big companies like Microsoft (NASD:MSFT), Disney (NYSE:DIS) and Telus (TSX:T) providing a strong second wave of growth. On the downside, Chorus Aviation (TSX:CHR) is the only big loser, down 52% from the initial purchase point. Prior to the covid-19 pandemic, Chorus was doing fine, up 10% and paying a decent dividend, but since late March 2020 it’s been cut in half and discontinued its dividend. Until the pandemic is completely over, and airlines return to pre pandemic capacities, I doubt the share price will recover. I keep hoping it will, but I suspect I’m suffering from loss aversion and should simply sell it and move on.

Activity

No significant activity to report this week.

Dividends

Dividends Received this week for the following companies:

Canadian $

No CAD$ dividends this past week.

US $

Microsoft

Quarterly Reports

MongoDB Inc. (NASD:MDB)

All currency listed in US dollars

Selected highlights from their third quarter 2022 financial results on December 6, 2021

• Total revenue was $226.9 million in the third quarter fiscal 2022, an increase of 50% year-over-year.
• Gross profit was $158.4 million in the third quarter fiscal 2022, representing a 70% gross margin, up from 69% gross margin in the year-ago period.
• Net loss was $81.3 million compared to $72.7 million, in the year-ago period.
• Negative free cash flow of $9.2 million, compared to negative free cash flow of $14.9 million in the year-ago period

Portfolio 3

Portfolio 3 for the week ended December 10, 2021: UP

Portfolio 3 continues to be driven by Shopify (TSX:SHOP), with a second wave of goeasy (TSX:GSY), Microsoft, and Royal Bank (TSX:RY). The only companies in the red at this point are Enghouse Systems (TSX:ENGH) and Real Matters (TSX:REAL), but there are 2 or 3 hovering at their respective breakeven points. A year ago, both Enghouse and Real Matters were comfortably in the black and Brookfield Asset Management (TSX:BAM.A) was the big name in the red. One never knows what the market has in store.

Activity

No significant activity to report this week.

Dividends

Dividends Received this week for the following companies:

Canadian $

No CAD$ dividends this past week.

US $

Microsoft

Quarterly Reports

No quarterly reports this week.

 

Do you like receiving surprises? A surprise gift or a surprise birthday party? I think most people like the former but not so much the latter. The markets are similar in they do not react well to surprises, as what happened this past week. I was reminded the stock markets do not like inflation, they do not like pandemics, but most of all, they do not like surprises. Let’s see what spooked the markets this week …

Market News

Monday: After fears of the Covid-19 Omicron sent the markets into a tailspin on Friday, all four North American indexes – Toronto Stock Exchange (TSX), S&P 500 (S&P), Dow Jones Industrial Average (DJIA) and Nasdaq Composite Index (Nasdaq) – rebounded as investors took a breath and waited for more information on the new virus strain. The US markets were led upward by the technology sector (Apple (NASD:AAPL) & Microsoft (NASD:MSFT) leading the way) and consumer cyclical (Amazon (NASD:AMZN) & Tesla (NASD:TSLA) leading the way) sectors.

Tuesday: US Federal Reserve Chair Jerome Powell spooked the markets when he suggested he no longer considers high inflation as “transitory,” and as a result, the Federal Reserve may accelerate interest rate hikes. Worries about interest rate hikes and the Covid-19 Omicron virus teamed up to knock the TSX down 2%, the biggest decline since October 2020. As well, all three of the American Indexes were down between 1.5% – 1.9 %.

Wednesday: As fears of Omicron eased, the TSX rebounded on the strength of rising oil prices and strong earnings from Canadian banks. In the US, the markets had a good start to the day but the first reported case of the Omicron virus in the America sent all 3 Indexes down at least 1%, respectively.

Thursday: While the markets await news on the severity of the covid-19 Omicron variant, the TSX rebounded from Wednesday’s seven week low, thanks to the financial sector leading all 11 sectors higher for the day. The gain in the financial sector was led by the big 5 Canadian banks (Royal Bank (TSX:RY), TD Bank (TSX:TD), Scotiabank (TSX:BNS), Bank of Montreal (TSX:BMO) and Canadian Imperial Bank of Commerce (TSX:CM)) all announcing higher dividends and share repurchasing programs, both good for investors.

In the US, all three Indexes were up, with the DJIA having its biggest one-day percentage gain since early March. Despite Canada ruling out Boeing (NYSE:BA) as the supplier of Canada’s next fleet of fighter planes, Boeing had their best day since late February after China approved the 737 Max airplane. Imagine, Chinese approval is worth more than Canadian approval. 😊

Friday: The Omicron covid-19 variant sent shivers through investors with the TSX falling 2.3% for the week, its biggest weekly drop since January 2021. In the US, the S&P, DJIA and Nasdaq were up and down like a yo-yo throughout the week but in the end they all fell for a second straight week. For the DJIA it was the fourth consecutive weekly drop.

For November, the markets were unable to maintain the upward October momentum for more than a week before drifting sideways once talks of inflation started. On November 19, the markets started downward before a sharp drop on fears of increased covid-19 cases in Europe, fears of inflation being more than ‘transitory,’ and finally, fears of the latest covid-19 strain, omicron. For the month, the TSX/S&P lost 1.8%, the S&P declined of 0.8%, the DJIA dropped 3.7% and the Nasdaq squeaked out a 0.25% gain.

To put the Indexes into perspective, despite the recent declines, all of the Indexes are still up for 2021. The chart below shows the gain/loss for the year on the right, and the compound annual growth rate (CAGR) percentages for each index across the top, year to date.

Portfolios News

Before I created the past week’s chart, I knew it was not going to be pretty. All three portfolios lean towards growth-oriented technology stocks and other than the mega cap companies like Apple and Microsoft, the technology sector had a rough week. What the markets give, they take back. This was another week they took back. ☹ Portfolio 2 is more dividend oriented, and those companies tend not to move up and down as much as growth-oriented companies. While Portfolio 1 has a lot of growth-oriented companies, it is also much more diversified than the other two portfolios. While the majority of technology companies in the portfolio company did not fare well, Apple, a few of the non-technology companies managed to escape the week with minimal losses. Finally, Portfolio 3 was the biggest lose for the week. If we were talking weight that would be great, but we are talking dollars, which is not so great.

Companies on the Radar

With the markets on a general downward trend, despite brief upward spikes, I have been sitting on the sidelines to see how far down the markets will go before scooping up companies that are on sale. Currently, I like American Tower (NYSE:AMT), Nvidia (NASD:NVDA) and Unity Software (NYSE:U).

Portfolio Update

Portfolio 1

Portfolio 1 for the week ended December 3, 2021: DOWN

Thud! That is the sound of DocuSign (NASD:DOCU) dropping like a stone, nearly 35%, on an investor’s toe at the start of trading on Friday. Having a company fall over 30% in a few minutes is not the way to start a day. DocuSign ended up down 42% for the day. Revenues were not DocuSign’s problem, it was their billings growth which had slowed from 47% in the second quarter to 28% in this third quarter, indicating a possible slow down in the company’s growth. The urgency of implementing DocuSign’s solutions has tapered off as the world starts to live with covid-19. The digital transformation tailwinds caused by the virus that had propelled the company’s share price up substantially since the start of the pandemic are starting to diminish.

I still like the company’s electronic signature solution and do not see us returning to the old way of signing forms. For example, think of how you bought car insurance prior to covid-19. You went to an insurance agent to signed legal documents that allowed you to drive your car. Since the pandemic started, you can phone an insurance agent and ‘sign’ your insurance papers while sitting at your computer. Much more convenient. And this is only the component end users experience. DocuSign also has a full cloud-based agreement management system with additional benefits for companies that sign up for their solutions.

Another company that has not done so well lately is Lightspeed Commerce (TSX:LSPD). Lawsuits against Lightspeed for allegedly making false and misleading statements continue to weigh on the share price, down over a third in the past month. The general market downturn is not helping.

Otherwise, Portfolio 1 got knocked down like the other portfolios and the markets. Hopefully, the bottom of this downturn is nearby, if not already reached. Somehow Rivian (NASD:RIVN) is till above where I bought it. I wonder how long that will last?

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 $

Shaw Communications Inc (TSX:SJR.B)

US $

No US$ dividends this past week.

Quarterly Reports

Bank of Nova Scotia (TSX:BNS)

All currency listed in Canadian dollars

Selected highlights from their fourth quarter 2021 financial results on November 30, 2021

Fiscal 2021 Highlights on a Reported Basis (versus Fiscal 2020)

• Net income of $9,955 million, compared to $6,853 million
• Earnings per share (diluted) of $7.70, compared to $5.30
• Return on equity(1) of 14.7%, compared to 10.4%
• Annual common dividend per share of $3.60

Fourth Quarter 2021 Highlights on a Reported Basis (versus Q4, 2020)

• Net income of $2,559 million, compared to $1,899 million
• Earnings per share (diluted) of $1.97, compared to $1.42
• Return on equity of 14.8%, compared to 11.0%

Crowdstrike Holdings Inc. (NASD:CRWD)

All currency listed in US dollars

Selected highlights from their third quarter 2022 financial results on December 1, 2021

• Total revenue was $380.1 million, a 63% increase, compared to $232.5 million in the third quarter of fiscal 2021.
• Annual Recurring Revenue (ARR) increased 67% year-over-year and grew to $1.51 billion as of October 31, 2021
• GAAP loss from operations was $40.3 million, compared to $24.2 million in the third quarter of fiscal 2021
• Free cash flow was $123.5 million, compared to $76.1 million in the third quarter of fiscal 2021.

DocuSign Inc. (NASD:DOCU)

All currency listed in US dollars

Selected highlights from their third quarter 2022 financial results on December 2, 2021

• Total revenue was $545.5 million, an increase of 42% year-over-year.
• Subscription revenue was $528.6 million, an increase of 44% year-over-year.
• GAAP net loss per basic and diluted share was $0.03 on 198 million shares outstanding compared to $0.31 on 186 million shares outstanding in the same period last year.
• Free cash flow was $90.0 million compared to $38.1 million in the same period last year.

Toronto-Dominion Bank (TSX:TD)

All currency listed in Canadian dollars

Selected highlights from their fourth quarter 2021 financial results on December 2, 2021

FULL YEAR FINANCIAL HIGHLIGHTS, compared with last year:

• Reported diluted earnings per share were $7.72, compared with $6.43.
• Reported net income was $14,298 million, compared with $11,895 million.
• Reported earnings were $3.8 billion, down 26% compared with the fourth quarter last year, primarily reflecting a net gain on the sale of the Bank’s investment in TD Ameritrade
• A dividend increase of ten cents per common share for the quarter ended January 31, 2022, an increase of 13%

FOURTH QUARTER FINANCIAL HIGHLIGHTS, compared with the fourth quarter last year:

• Reported diluted earnings per share were $2.04, compared with $2.80.
• Reported net income was $3,781 million, compared with $5,143 million.
• Canadian Retail reported net income was $2,137 million, an increase of 19% compared with the fourth quarter last year.
• S. Retail net income was $1,374 million (USD $1,092 million), an increase of 58% compared with the fourth quarter last year.

Portfolio 2

Portfolio 2 for the week ended December 3, 2021: DOWN

Portfolio 2 was the best of a bad lot this week, falling 3.9%. The Portfolio saw increasing losses every day starting November 30. The week was capped off with a 6.5% drop by MongoDB (NASD:MDB) on Friday. The good news is nothing changed with any of the companies in the portfolio, so Portfolio 2 was caught up in the general market decline. Its not fun to experience declines but since there is no need for cash, the best thing for me to do is be patient and wait for a buying opportunity to present itself.

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 $

Fortis (TSX:FTS)

US $

No US$ dividends this past week.

Quarterly Reports

Bank of Nova Scotia (TSX:BNS)

All currency listed in Canadian dollars

Selected highlights from their fourth quarter 2021 financial results on November 30, 2021

Fiscal 2021 Highlights on a Reported Basis (versus Fiscal 2020)

• Net income of $9,955 million, compared to $6,853 million
• Earnings per share (diluted) of $7.70, compared to $5.30
• Return on equity(1) of 14.7%, compared to 10.4%
• Annual common dividend per share of $3.60

Fourth Quarter 2021 Highlights on a Reported Basis (versus Q4, 2020)

• Net income of $2,559 million, compared to $1,899 million
• Earnings per share (diluted) of $1.97, compared to $1.42
• Return on equity of 14.8%, compared to 11.0%

Portfolio 3

Portfolio 3 for the week ended December 3, 2021: DOWN

You know who seems to like inflation – bank stocks. When inflation rises, the way to fight inflation is to raise interest rates. While higher interest rates are not good for borrowers, they are beneficial to lenders. For Portfolio 3, the beneficiaries were the Royal Bank of Canada (Royal) and Toronto Dominion Bank (TD). Both held up fairly well during the market decline. TD was one of two companies in the portfolio to actually end up higher at the end of the week. The other company that ended the week higher was GDI Integrated Facility Services (TSX:GDI) . Both banks and GDI are not flashy, but they keep grinding upward which is why they are in the portfolio. They provide diversification and function as a counterweight to the flashier high growth technology stocks which can jump up a lot but also can fall hard, like Shopify (TSX:SHOP) dropping CAD $200 on Friday. Shopify is by far the largest position, so when it falls, the Portfolio falls.

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 $

Enghouse Systems (TSX:ENGH)

Royal Bank of Canada (TSX:RY)

US $

No US$ dividends this past week.

Quarterly Reports

Royal Bank of Canada (TSX:RY)

All currency listed in Canadian dollars

Selected highlights from their fourth quarter 2021 financial results on December 1, 2021

For the year ended October 31, 2021:

• Net income of $16.1 billion for the year ended October 31, 2021, up $4.6 billion or 40% from the prior year.
• 2021 Diluted EPS $11.06, up 41% YoY
• 2021 ROE – 18.6%, up from 14.2% last year

Q4 2021 compared to Q4 2020:

• Net income of $3,892 million
• Diluted EPS of $2.68
• ROE of 16.9%

Toronto-Dominion Bank (TSX:TD)

All currency listed in Canadian dollars

Selected highlights from their fourth quarter 2021 financial results on December 2, 2021

FULL YEAR FINANCIAL HIGHLIGHTS, compared with last year:

• Reported diluted earnings per share were $7.72, compared with $6.43.
• Reported net income was $14,298 million, compared with $11,895 million.
• Reported earnings were $3.8 billion, down 26% compared with the fourth quarter last year, primarily reflecting a net gain on the sale of the Bank’s investment in TD Ameritrade
• A dividend increase of ten cents per common share for the quarter ended January 31, 2022, an increase of 13%

FOURTH QUARTER FINANCIAL HIGHLIGHTS, compared with the fourth quarter last year:

• Reported diluted earnings per share were $2.04, compared with $2.80.
• Reported net income was $3,781 million, compared with $5,143 million.
• Canadian Retail reported net income was $2,137 million, an increase of 19% compared with the fourth quarter last year.
• S. Retail net income was $1,374 million (USD $1,092 million), an increase of 58% compared with the fourth quarter last year.

Thursday evening, I told a friend I thought Friday would be a good day for the markets because they had ended Wednesday with some upward momentum after bouncing up and down earlier in the week. Boy, was I wrong! Friday morning, I started getting direct message alerts that a number of the stocks in the various portfolios were down and a few had even reached 52-week lows. Not a good way to start the day. Let’s take a look and see what caused this drop and how it impacted the portfolios…

Market News

On Monday, a second term for US Federal Reserve Chair Jerome Powell led to fears of higher interest rates which would negatively impact technology stocks on both sides of the border. The Toronto Stock Exchange (TSX) ended lower for a fourth straight day and both the S&P 500 Index (S&P) and techology heavy Nasdaq Composite Index (Nasdaq) ended lower. The Dow Jones Industrial Average (DJIA) was the lone bright spot, ending the day higher.

Tuesday, the DJIA and S&P ended the day on positives notes, as did the TSX which got back on the winning side.  The energy and financial sectors drove all three Indexes. Energy stocks were up in reaction to the US and other countries releasing oil from their respective strategic reserves to cool off high oil prices. Finacial sector stocks were up in expectation of interest rate hikes.  Those same expectations caused the Nasdaq to end lower for a second straight day.

I’d like to think as go the Canadian techology stocks, the US technology stocks follow, but reality is the US companies set the pace and Canadian companies follow (Shopify perhaps being the exception). On Wednesday, the Nasdaq recovered from the previous days’ selloff to end in positive territory. The rise of technology stocks continued north of the 49^th and with help from the cannabis sector, pushed the TSX into positive territory for a second consecutive day.

The US markets were closed for US Thanksgiving but the TSX was open for business. The TSX rose thanks to financial and technology stocks.

To end the week, worries about how the new coronavirus variant, Omicron, could hinder the global economic recovery caused all four of the major North American markets to fall hard on Friday. The TSX, S&P, DJIA (largest 1 day drop since October 2020) and Nasdaq all suffered at least 2% drop respectively. Stocks that looked to benefit from the economic reopening fell, while stay-at-home stocks were the main beneficiary of the the covid-19 news.

Looking at the chart of the four indexes below, one can see how they essentially drifted sideways until mid week. Nasdaq started its descent going into the Thanksgiving holiday and when the American markets reopened on Friday, all the Indexes fell.

Portfolio News

The Portfolios chart below is definitely not the type of chart I like to see – everything pointing downward like a bunch of bats hanging from a tree limb. However, based on the Index performance chart above, I am not surprised. Portfolio 3 took the dubious honour of having the biggest loss last week. I am not surprised as Portfolio 3 has the largest percentage of technology stocks and the technology heavy Nasdaq Index fell the most.

Last week I had the sense that while it was a mixed bag performance by the four Indexes in general, the gains seemed to be concentrated in a few of the big companies, especially in the technology sector with names like Apple and Microsoft leading the way. There was not much breadth to the upward moves. This reminded me of late February 2021 when the upward movement was generated by a few companies rather than a broad market move. The markets had a sharp sell off before resuming the upward trend a few weeks later. I cannot remember what precipitated that February sell off, but I was wondering if the present-day markets were looking for a reason to pullback and the latest covid-19 report provided one .

I certainly hope the markets rebound next week but I suspect they will be jittery for a while until there is a better understanding of the latest Covid-19 variation and how it will impact the economy.

Companies on the Radar

They were not any new companies that appeared on my radar this past week. American Tower (NYSE:AMT) is still on the radar and I was intrigued to find it was up a little over $2.00 for the week when almost every other company was down. Celsius Holdings has been beaten down fairly hard (nearly 50% since early November) thanks to supply chain issues so I have put them back on the radar. I would like to see them resolve their supply of aluminum cans before adding more shares, but the share price does look attractive. Otherwise, Roku (NASD:ROKU) has hit a 53 week low so I’ll have to see if its found a bottom or if it will continue to fall. Unity Software (NYSE:U) had a bit of a pull back last week. As with Roku, I will be watching next week to see if that is a new bottom or if it will retreat further.

Portfolio Update

Portfolio 1

Portfolio 1 for the week ended November 26, 2021: DOWN

Another week in positive territory for Rivian although the trend (downward) is currently not my friend. I knew the stock could not sustain the $170 share price, so I am not surprised it has fallen back. I think it will take a few quarterly earnings reports with increasing revenues for the share price to start a steady march upward. At this point in its public life, I am just happy if the price stays above $100 per share. I will be very happy if it can reach a share price like Tesla ($1000). I will be even happier if GM’s share price could reach half that. 😊

A lot of the technology stocks were hit hard on Friday presenting a possible buying opportunity. Depending on what the markets do next week it may be a good time to pick up a few shares in American Tower as well as acquire more shares in companies already in the 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 $

Quinsam Capital Corp (CSE:QCA)

US $

No US$ dividends this past week.

Quarterly Reports

No quarterly reports this week.

Portfolio 2

Portfolio 2 for the week ended November 26, 2021: DOWN

Portfolio 2 had the best week of the three portfolios but still ended down over 2%. Considering what happened to the technology heavy Nasdaq, it surprised me to see MongoDB ended the week up eight dollars. A few other stocks ended a few cents in the black but, not enough to overcome the overall market decline.

Alimentation Couche-Tard (ATD.B) did not have a good second quarter as their earnings were down despite higher revenues. Credit to Alimentation Couche-Tard for calling this out in a bullet rather than burying it a paragraph like some companies. Labour shortages and supply chain issues caused by the Covid-19 pandemic continues to plague Alimentation Couche-Tard, as it does for the rest of the retail and convenience store environment.

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 $

Dream Industrial Real Estate Investment Trust (TSX:DIR.UN) DRIP

US $

No US$ dividends this past week.

Quarterly Reports

Alimentation Couche-Tard Inc (TSX:ATD.B)

Selected highlights from their second quarter 2022 financial results on November 23, 2021

• Net earnings were $694.8 million for the second quarter of fiscal 2022 compared with $757.0 million for the second quarter of fiscal 2021.
• Revenues increased 33.5 per cent to US$14.22 billion from US$10.66 billion in the prior-year quarter, mainly due to higher fuel prices
• The Company repurchased shares for a total of $587.7 million under its current share repurchase program.
• 7% increase of the quarterly dividend, from CA 8.75¢ to CA 11.00¢

Portfolio 3

Portfolio 3 for the week ended November 26, 2021: DOWN

A bad week for the technology sector is not a good sign for Portfolio 3. Sure enough, it was not a good week for Portfolio 3 with almost every company losing ground for the week. TD Bank, Real Matters (real estate appraisal services) and GDI Integrated Facility Services (cleaning and technical services) were the only companies to gain ground this past week.

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

No quarterly reports this week.

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

 

It was not a good week for traditional conglomerates as commercial break ups spread across the world. Earlier in the week, 129-year-old General Electric announced it was splitting into three units centred around aviation, healthcare, and energy. In Japan, industrial giant Toshiba stated it would be splitting into three companies focused on infrastructure, semiconductors, and electronics. Finally, to close the week, 135-year-old Johnson & Johnson revealed plans to split into two publicly traded companies: consumer products (Band-Aid bandages, Aveeno and Neutrogena skin care products, and Listerine, etc.), and pharmaceutical & medical devices.

Is this the end of the conventional multi business conglomerates?  Are we seeing the rise of the 21^st century conglomerates, such as Alphabet (Google) and Amazon. Only time will tell.

Lets see what else happened in the markets and portfolios this past week ….

Market News

The letter ‘V’, as in V-shaped, was the pattern for all four markets this past week. The Toronto Stock Exchange (TSX) had string of 4 consecutive record high market closes interrupted by a mid week dip but rebounded to close the week at a record high. Early in the week the TSX was lifted by talk of cannabis legalization in the US pushing Canadian cannabis stocks upward before a mid week pullback. On Thursday, inflation fears sent gold prices higher pushing the TSX’s gold and resource stocks higher. Finally, on Friday, a huge 11% spike by Shopify enabled the TSX to finish the week in positive territory and with a greater percentage gain than its three American counterparts.

South of the border, the three major indexes all followed the same V shaped path: up – down – up. A mid week pullback ended eight straight sessions of all-time closing highs for the S&P 500 and the Nasdaq. The blue-chip Dow Jones Industrial Average notched its second consecutive record closing high on Monday before it too followed the same downward path. On Friday all three Indexes headed back upward but it wasn’t enough to prevent each of them with a loss for the week. The US markets were propelled upward by the good news US infrastructure bill, the downward movement was likely caused by profit taking after a strong run up, as well as fears of inflation. On Friday, as with Shopify on the TSX, technology stocks, particularly Apple and Microsoft, drove the markets upward, but not enough to finish the week higher than last Friday.

Portfolio News

Once again, all three portfolios finished in positive territory. Not only did they all post another weekly gain, but they all beat the major US Indexes.  As technology stocks are the largest component of all three portfolios, the strong finish to the week by the technology sector is what likely pushed them into positive territory. It definitely did for Portfolio 3 where Shopify is the largest holding.

Companies on the Radar

No new companies have come onto my radar this week

As with last week, I’m looking to add shares in the following companies, in no particular order:

• Roku (NASD:ROKU)
• Nvidia (NASD:NVDA)
• Unity Software (NYSE:U)

Portfolio Update

Portfolio 1

Portfolio 1 for the week ended November 12, 2021  UP

Thanks to a big upward move in share price on Friday for PayPal, Trade Desk, Sea Limited, and Cloudflare, portfolio 1 nudged its way into positive territory for the week. The rest of the US technology stocks had a good week to offset the drop in share price for Celsius Holdings (energy drinks) and Canadian technology companies Lightspeed Commerce and Nuvei. Turning cash into Rivian Automotive shares for a 30% gain didn’t hurt either.

Activity

Bought Rivian Automotive (NASD:RIVN) As evidenced by the past few weekly updates, I’ve had my eye on Rivian for a few months ago. Why such interest in a company that has barely over $0 revenue and nearly $1 billion in losses? Glad you asked. Other than the financial numbers, there is a lot to like about this company.  To start, its founder led with a great vision for the company. Both Amazon and Ford are invested in the company, with Amazon placing an order for 100,000 electric vans. On a side note, I find it interesting that Ford is a major investor in what could become their largest rival for the electric pickup market. Back on track, the company has had a lot of positive hype and despite not having delivered a vehicle until very recently, there is strong appeal for the brand and its mission (preserving the natural world). With over 55,000 pre-orders and the initial deliveries of their vehicles earlier this month they are a first mover in the emerging electric pickup, SUV and van market. I don’t know if I’ll ever own a Rivian but for now, I’m glad to be an owner of the company. The challenge will be whether to hold the shares if/when the share price drops once the hype wears off or to sell the shares and take profit, with the plan to buy back in once the reality of very little revenue and growing expenses sets in. Hmmm.

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)

US $

Apple Inc (NASD:AAPL)

Quarterly Reports

In most cases, financial reports are directly linked to the respective company’s news release or presentation. In cases, where a company does not have a news release for their quarterly earnings report, a link to a news release on Yahoo Finance is provided.

TMX Group (TSX:X)

Selected highlights from their third quarter 2021 financial results on November 8, 2021

• Revenue of $231.3 million, up 11% from $207.6 million in Q3/20
• Net income in Q3/21 was $76.9 million, compared with a net income of $70.0 million for Q3/20
• Net income in the nine months ended September 30, 2021 was $250.6 million, compared with a net income of $207.9 million, for the nine months ended September 30, 2020

Invitae (NYSE:NVTA)

Selected highlights from their third quarter 2021 financial results on November 8, 2021

• Revenue increases more than 66% on volume growth of 89% from Q3 2020
• Achieved gross profit for the third quarter of 2021 of $26.7 million, compared to $22.1 million in the same period in 2020
• The company has adjusted its 2021 annual revenue guidance to $450 million – $475 million, or year-over-year revenue growth of between 60% and 70%

The Trade Desk (NASD:TTD)

Selected highlights from their third quarter 2021 press release on November 8, 2021

• Record third quarter revenue of $301.1 million
• Customer retention remained over 95% during the quarter, as it has for the previous 7 years
• Revenue growth of 39%

PayPal (NASD:PYPL)

Selected highlights from their third quarter 2021 financial results on November 8, 2021

• Total Payment Volume (TPV) reaches $310 billion with 416 million active accounts
• GAAP EPS of $0.92 compared to $0.86 in Q3’20
• Operating Cash Flow of $1.51 billion, growing 15%; Free Cash Flow of $1.29 billion, growing 20%
• Strong Balance Sheet with $20 billion in cash, cash equivalents and investments; total debt pf $8.9 billion

Nuvei Corp (TSX:NVEI)

Selected highlights from their third quarter 2021 news release on November 9, 2021

For the 9 months ended September 30, 2021:

• Revenue increased 97% to $512.7 million from $260.3 million
• Net income increased by $221.0 million to $94.7 million compared to a net loss of $126.2 million
• Cash flow from operating activities of $201.9 million increased from $49.0 million

Kneat.com (TSX:KSI)

Selected highlights from their third quarter 2021 news release on November 10, 2021

• Third quarter revenues increase 91% to $3.7 million
• Software as a Service revenues increased 276% to $2.6 million, compared with $0.7 million for the third quarter of 2020
• Gross margin increased 182% to $2.0 million compared with $0.7 million for the third quarter of 2020 and gross profit margin increased to 54% compared with 37% for the third quarter of 2020.

Unity Software (NYSE:U)

Selected highlights from their third quarter 2021 financial results on November 9, 2021

• Revenue was $286.3 million, an increase of 43% from the third quarter of 2020
• Loss from operations was $126.8 million, or 44% of revenue, compared to loss from operations of $141.7 million, or 71% of revenue, in the third quarter of 2020
• Free cash flow in the third quarter of 2021 was $34.2 million, compared to $10.9 million for the same period last year.
• Cash, cash equivalents, and restricted cash were $766.3 million as of September 30, 2021, compared to $1.8 billion as of September 30, 2020

FuboTV (NYSE:FUBO)

Selected highlights from their third quarter 2021 presentation on November 9, 2021

• 945K Subscribers for 3Q21, up from 455K in 3Q20
• Advertising revenue up 147% since 3Q30, from $7.5m to 18.6m
• Net loss of $105.9m compared to a loss of $274.1m in 3Q20
• Average revenue per user up 10%, from $67.70 in 3Q20 to $74.54 in 3Q21

GDI Integrated Facility Services (TSX:GDI)

Selected highlights from their third quarter 2021 financial results on November 10, 2021

• Third quarter revenue of $ 408.4 million, an increase of $ 43 million over third quarter 2020
• Third quarter 2021 net income of $ 9.4 million, or $.41 per share

For the 9 months ended September 20, 2021

• Revenue reached $1.164 billion, an increase of $117.2 million, or 11.2%, over the corresponding
  period of 2020.
• Net income was $36.5 million or $1.59 per share compared to $31.0 million or $1.42 per share in the corresponding period of 2020.

Andlauer Health Services (TSX:AND)

Selected highlights from their third quarter 2021 news release on November 10, 2021

• Revenue increased 37.5% to $104.2 million, compared to $75.8 million in the three months ended September 30, 2020 (“Q3 2020”)
• Net income and comprehensive income increased 41.8% to $12.2 million, compared to $8.6 million in Q3 2020

Well Health Technologies Corp (TSX:WELL)

Selected highlights from their third quarter 2021 financial results on November 10, 2021

• Quarterly revenues of $99.3 million in Q3-2021 reflecting a 711% year-over-year (YoY) increase compared to Q3-2020
• Virtual Services revenues increased to $18.0 million in Q3-2021, representing 597% YoY growth as compared to Virtual Services revenue of $2.6 million in Q3-2020
• Over 93% of WELL’s revenue was either recurring or highly re-occurring in nature
• Delivered 582,958 total omni-channel patient visits in Q3-2021, representing a YoY increase of 139%

Celsius Holdings Inc (NASD:CELH)

Selected highlights from their third quarter 2021 financial results on November 11, 2021

• Revenue of $94.9 million, up 157% from $36.8 million in Q3 2020
• Gross profit of $37.7 million, up 115% from $17.5 million in the year ago quarter
• Net income of $2.7 million compared to $4.8 million in year ago quarter

For the 9 months ended September 30:

• Revenue of $210 million, up 121% from the 9 months ended September 30, 2020
• Gross profit of $86.5 million, up 99% from $43.5 million in the year ago quarter
• Net income of $7.3 million compared to $6.9 million in the 2020 period

Docebo Inc. (TSX:DCBO)

Selected highlights from their third quarter 2021 news release on November 11, 2021

• Revenue of $27.1 million, an increase of 68% from the comparative period in the prior year
• Net income of $0.7 million, or $0.02 per share, compared to net loss of $1.2 million, or $0.04 per share for the comparative period in the prior year
• Docebo is now used by 2,636 customers, an increase from 2,025 customers at the end of September 30, 2020
• Strong growth in average contract value, calculated as total Annual Recurring Revenue divided by the number of active customers, increasing from $31,900 to $39,275

Algonquin Power & Utilities Corp. (TSX:AQN)

Selected highlights from their third quarter 2021 press release on November 11, 2021

• Revenues of $528.6 million, an increase of 40% compared to the third quarter of 2020
• Adjusted Net Earnings¹ of $97.6 million, an increase of 11% compared to the third quarter of 2020

Yellow Pages (TSX:Y)

Selected highlights from their third quarter 2021 financial results on November 12, 2021

• Total revenues decreased 11.7% year-over-year and amounted to $70.9 million for the three-month period ended, mainly due to the decline of higher margin digital media and print products and to a lesser extent to lower margin digital services products, thereby creating pressure on gross profit margins
• Net earnings increased to $13.7 million, or to $0.51 per diluted share
• Cash flows from operating activities decreased by $8.0 million to $24.7 million for the three-month period ended September 30, 2021 compared to $32.7 million for the same period last year

Boston Omaha (NASD:BOMN)

Selected highlights from their third quarter 2021 financial results on November 12, 2021

• A third quarter net loss of $0.89 per diluted share, compared with net income of $0.13 a year earlier
• Revenue for the quarter was $14.5 million, up from $11.6 million a year earlier
• Cash flow from operations for the nine months ended September 30, 2021, was $6,620,097, compared to $3,492,006 for the nine months ended September 30, 2020
• Book value per share was $17.03 at September 30, 2021, compared to $14.01 at December 31, 2020

Portfolio 2

Portfolio 2 for the week ended November 12, 2021: UP

MongoDB and Microsoft are the two companies that really drive Portfolio 2 higher. The combination of these two rapidly appreciating share price companies along with cash generating dividend stocks has made a good combination for growth while lowering risk. While the two technology companies get the headlines, the other companies’ share price quietly moves upward while generating cash which is re-invested into additional shares thanks to dividend re-investment plans, also know as DRIPs.

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)

US $

No US$ dividends this week.

Quarterly Reports

In most cases, financial reports are directly linked to the respective company’s news release or presentation. In cases, where a company does not have a news release for their quarterly earnings report, a link to a news release on Yahoo Finance is provided.

Zynga (NASD:ZNGA)

Selected highlights from their third quarter 2021 financial results on November 8, 2021

• Quarterly revenue of $704.7 million, up 40%
• Quarterly advertising and other revenue and bookings were $134 million, both up 99%
• On Track to Finish 2021 with Zynga’s Best-Ever Annual Topline Performance

Kneat.com (TSX:KSI)

Selected highlights from their third quarter 2021 news release on November 10, 2021

• Third quarter revenues increase 91% to $3.7 million
• Software as a Service revenues increased 276% to $2.6 million, compared with $0.7 million for the third quarter of 2020
• Gross margin increased 182% to $2.0 million compared with $0.7 million for the third quarter of 2020 and gross profit margin increased to 54% compared with 37% for the third quarter of 2020.

Disney (NYSE:DIS)

Selected highlights from their fourth quarter and full year 2021 news release on November 10, 2021

• Diluted earnings per share (EPS) from continuing operations for the quarter was income of $0.09 compared to a loss of $0.39 in the prior-year quarter
• Diluted EPS from continuing operations for the year ended October 2, 2021 was income of $1.11 compared to a loss of $1.57 in the prior-year

Chorus Aviation (TSX:CHR)

Selected highlights from their third quarter 2021 financial results on November 11, 2021

• Net loss of $14.1 million, or $0.08 per basic share
• Adjusted net income¹of $15.3 million, or $0.09 per basic share
• Adjusted net income was $15.3 million for the quarter, an increase of $4.4 million
• Adjusted net income was $42.4 million year-to-date, a decrease over 2020 of $13.9 million

Portfolio 3

Portfolio 3 for the week ended November 12, 2021: UP

As mentioned earlier in the Portfolio News section, Shopify’s share price had a very big day Friday, rising four times Portfolio 3’s purchase price alone. There was no news from Shopify to justify this upward movement, but I’ll gladly take it. Unity Software, Cloudflare and Microsoft also had a strong Friday.

I decided to put a little bit of cash into a cryptocurrency. I figure if I have even a tiny amount of the currency, I’ll follow it a bit more closely and hopefully get a better understanding and appreciation of Ethereum, cryptocurrencies in general, and the underlying blockchain technology.

Activity

Ethereum (ETH) Purchased less than C$ 200 of Ethereum to get familiar with cryptocurrency. I was able to acquire 0.02842 of an Ethereum coin at a price of C$ 6137.23, including transaction fee.

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

In most cases, financial reports are directly linked to the respective company’s news release or presentation. In cases, where a company does not have a news release for their quarterly earnings report, a link to a news release on Yahoo Finance is provided.

Unity Software (NYSE:U)

Selected highlights from their third quarter 2021 financial results on November 9, 2021

• Revenue was $286.3 million, an increase of 43% from the third quarter of 2020
• Loss from operations was $126.8 million, or 44% of revenue, compared to loss from operations of $141.7 million, or 71% of revenue, in the third quarter of 2020
• Free cash flow in the third quarter of 2021 was $34.2 million, compared to $10.9 million for the same period last year.
• Cash, cash equivalents, and restricted cash were $766.3 million as of September 30, 2021, compared to $1.8 billion as of September 30, 2020

Fortuna Silver Mines Inc. (TSX:FVI)

Selected highlights from their third quarter 2021 financial results on November 10, 2021

• Record sales of $162.6 million, an increase of 95% from the $83.4 million reported in the same period in 2020, due primarily to gold sales from the Yaramoko mine of $49.0 million and from the Lindero mine of $41.8 million
• Net income of $0.2 million or $0.00 per share, compared to $13.1 million or $0.07 net income per share reported in Q3 2020. Net income was lower due primarily to $10.5 million in transaction costs related to the acquisition of Roxgold Inc., and $9.6 million settlement of the disputed royalty claim with the Mexican Geological Service
• Free cash flow from ongoing operations¹ of $33.8 million compared to $30.1 million reported in Q3 2020
• Silver and gold production of 1,711,881 ounces and 65,425 ounces, respectively

Kneat.com (TSX:KSI)

Selected highlights from their third quarter 2021 news release on November 10, 2021

• Third quarter revenues increase 91% to $3.7 million
• Software as a Service revenues increased 276% to $2.6 million, compared with $0.7 million for the third quarter of 2020
• Gross margin increased 182% to $2.0 million compared with $0.7 million for the third quarter of 2020 and gross profit margin increased to 54% compared with 37% for the third quarter of 2020.

GDI Integrated Facility Services (TSX:GDI)

Selected highlights from their third quarter 2021 review presentation on November 10, 2021

• Third quarter revenue of $ 408.4 million, an increase of $ 43 million over third quarter 2020
• Third quarter 2021 net income of $ 9.4 million, or $.41 per share

For the 9 months ended September 20, 2021

• Revenue reached $1.164 billion, an increase of $117.2 million, or 11.2%, over the corresponding
  period of 2020.
• Net income was $36.5 million or $1.59 per share compared to $31.0 million or $1.42 per share in the corresponding period of 2020.