Market News
Despite a dip on Thursday all of the major North American indexes (S&P/TSX, S&P 500, Dow Jones Industrial Average, and Nasdaq 100) were up this past week. All three of the portfolios finished in positive territory for the week. Hopefully the momentum caused by the upward move on Friday will continue into September.
Portfolio Updates
Portfolio 1
Portfolio 1 for the week ended August 27, 2021: UP 
Activity
Sold Canopy Growth (TSX:WEED) . This was my 2nd purchase of WEED as the first purchase was doing well. This purchase was in the summer of 2018 as an investment into the legalization of marijuana in October, 2018. The stock price jumped to $75+ and has been drifting down since. I should have sold when marijuana was legalised in Canada but was in a buy and hold forever mindset.
After missing this initial opportunity to sell I thought there would be another surge in share price when the US started down the path to legalizing marijuana federally. There was a brief surge when the Democrats won the 2020 election but there doesn’t appear to be any hurry to legalize it causing the share price to drift down.
With the US legalization a low priority and recent announcements suggesting the company won’t be profitable until 2022 at the earliest the price has languished in the mid $20s. As well, Canopy Growth is no longer the dominant company in this industry that it once was. For all of these reasons, I decided to sell Canopy Growth. Since these shares were in a taxable account there will be a capital loss that can’t be used against any capital gains.
Lesson I learned: Not every company is a buy and hold forever company. Identify if it is a buy and hold forever company or one that is riding a hype train. If the later, ride it up and be quicker to sell the shares.
Bought Magnet Forensics (TSX:MAGT) . I’ve been interested in Magnet Forensics since it first came public in April 2021 at $22.90. The company is founder led in the growing cybersecurity industry; increasing sales; positive and growing net income; and the company is cash flow positive. I didn’t have the cash in May but finally had enough cash to buy some shares this week. If I’d had the cash in May, I could’ve doubled the investment already. Sigh.
Dividends
Dividends Received this week for the following companies:
Canadian $
Automotive Property REIT (TSX:APR.UN)
Quinsam Capital Corporation (CNQ:QCA)
US $
Quarterly Reports
Bank of Nova Scotia (TSX:BNS) :
Selected highlights from their August 24, 2021 3QF22press release
Third Quarter Highlights on a Reported basis (versus Q3 2020)
- Net income of $2,542 million, compared to $1,304 million
- Earnings per share (diluted) of $1.99, compared to $1.04
- Return on equity of 15.0%, compared to 8.3%
Selected highlights from their August 26, 2021 3QF22
THIRD QUARTER FINANCIAL HIGHLIGHTS, compared with the third quarter last year:
- Reported diluted earnings per share were $1.92, compared with $1.21.
- Adjusted diluted earnings per share were $1.96, compared with $1.25.
- Reported net income was $3,545 million, compared with $2,248 million.
- Adjusted net income was $3,628 million, compared with $2,327 million.
YEAR-TO-DATE FINANCIAL HIGHLIGHTS, nine months ended July 31, 2021, compared with the corresponding period last year:
- Reported diluted earnings per share were $5.68, compared with $3.62.
- Adjusted diluted earnings per share were $5.83, compared with $3.76.
- Reported net income was $10,517 million, compared with $6,752 million.
- Adjusted net income was $10,783 million, compared with $6,998 million.
Enwave Corporation (TSX-V:ENW)
Selected highlights from their August 27, 2021 3QF22
Key Financial Highlights for Q3 (expressed in ‘000s):
- The Company reported consolidated net income of $670 for Q3 2021, compared to a net loss of $1,166 for Q3 2020, an increase in profitability of $1,836.
- Reported consolidated revenue for Q3 2021 of $7,351 compared to $5,998 for Q3 2020, an increase of $1,353 or 23%.
- Gross margin for Q3 2021 was 36% compared to 26% for Q3 2020.
Significant Corporate Accomplishments in Q3 2021 and To-Date:
- Formed a global strategic partnership with Dole Worldwide Food & Beverages Group.
Portfolio 2
Portfolio 2 for the week August 27, 2021: UP
Activity
Sold Canopy Growth (TSX:WEED) . This was the first purchase of WEED in October 2017 as an investment into the coming legalization of marijuana in October 2018. As in Portfolio 1, I should have sold when marijuana was legalised in Canada.
The rationale for selling is the same as in Portfolio 1 but this time there was a decent profit. Fortunately, these shares were in a tax-free account so there will be no capital gain taxes to be paid.
Lesson I learned: Not every company is a buy and hold forever company. Identify if it is a buy and hold forever company or one that is riding a hype train. If the later, ride it up and be quicker to sell the shares.
Dividends
Dividends Received this week for the following companies:
Canadian $
No Canadian$ dividends this week.
US $
No US$ dividends this week.
Quarterly Reports
Bank of Nova Scotia (TSX:BNS):
Selected highlights from their August 24, 2021 3QF22press release
Third Quarter Highlights on a Reported basis (versus Q3 2020)
- Net income of $2,542 million, compared to $1,304 million
- Earnings per share (diluted) of $1.99, compared to $1.04
- Return on equity of 15.0%, compared to 8.3%
Portfolio 3
Portfolio 2 for the week August 27, 2021: UP
Activity
Adyen (OTC:ADYEY) split 2 for 1 on August 24.
Dividends
Dividends Received this week for the following companies:
Canadian $
No Canadian$ dividends this week.
US $
No US$ dividends this week.
Quarterly Reports
Selected highlights from their August 26, 2021 3QF22
Q3 2021 Compared to Q3 2020
- Net income of $4,296 million up 34%
- Diluted EPS of $2.97 up 35%
- ROE of 19.6% up 390 bps
- CET1 ratio of 13.6% up 160 bps
Q3 2021 Compared to Q2 2021
- Net income of $4,296 million up 7%
- Diluted EPS of $2.97 up 8%
- ROE of 19.6% up 20 bps
- CET1 ratio of 13.6% up 80 bps
Q3 2021 Compared to YTD 2020
- Net income of $12,158 million up 48%
- Diluted EPS of $8.39 up 50%
- ROE of 19.2% up 560 basis points
Selected highlights from their August 26, 2021 3QF22
THIRD QUARTER FINANCIAL HIGHLIGHTS, compared with the third quarter last year:
- Reported diluted earnings per share were $1.92, compared with $1.21.
- Adjusted diluted earnings per share were $1.96, compared with $1.25.
- Reported net income was $3,545 million, compared with $2,248 million.
- Adjusted net income was $3,628 million, compared with $2,327 million.
YEAR-TO-DATE FINANCIAL HIGHLIGHTS, nine months ended July 31, 2021, compared with the corresponding period last year:
- Reported diluted earnings per share were $5.68, compared with $3.62.
- Adjusted diluted earnings per share were $5.83, compared with $3.76.
- Reported net income was $10,517 million, compared with $6,752 million.
- Adjusted net income was $10,783 million, compared with $6,998 million.