March 7 – March 11, 2022
The week got off to a great start …. if you’re heavily invested in oil and energy companies as oil jumped to USD $130 a barrel. Sadly, I am not ☹, so it was another in a trend of blue Mondays. The markets went on a bit of a rollercoaster ride for the rest of the week. At the start of the week the Dow Jones Industrial Average was the last of the three major American Indexes to enter correction territory (a drop of 10% – 20%). Wednesday was a bright spot for us technology investors, but the rally was short lived as the Technology sectors in Canada and the US resumed their respective declines on Thursday and Friday.
While I am not heavily invested in oil, I have invested in a few oil and energy companies but not enough to offset the declines in the high growth sectors like Technology and Consumer Cyclicals (nonessential products people want rather than need) that I tend to favour. I hate to think what the losses would be like without these oil stocks and other defensive stocks like Utility companies and Real Estate Investment Trusts that have continuously paid dividends and distributions, respectively, throughout this market correction.
Throughout this market downturn I have been constantly reminding myself that with my investment philosophy and the way I have built the three Portfolios, the inevitable market downturns will be uncomfortable, but not forever. Since I do not need any cash in the immediate future, I can ride out this storm either by doing nothing or buying shares of my best companies while they are on sale. One of the few advantages I have as an individual investor is I can play the long game and not worry about short term share price fluctuations or try to meet short term targets. I have always believed you should play to your strengths, so I intend to make the most of this advantage.
Since I have developed my investment philosophy and strategy, I find I do not worry about market declines (that much). I have no control over what the stock market does or when it does it. My strategy helps me stay focused when the inevitable market downturns occur. When a decline occurs, rather than stress about it (ok, maybe a bit of stress), I look at it as an opportunity to purchase good companies while they are on sale. I know, easier said then done, but consider the sudden market crash in 2020 at the start of the pandemic. It felt awful. But once I got my head around the fact that there was nothing I could do but lock in losses, I started to see opportunities everywhere. I was fortunate to have cash in one of the Portfolios and I took advantage of the sale.
This 2022 market correction is not nearly as much fun because the decline is painfully slower than in 2020, the recovery is taking longer to kick in and I do not have much cash available to take advantage of these sale prices. This time, I am doing nothing but that does not mean I am not looking. 😊
Now, lets take a closer look at what happened in the market this past week and how it impacted the Portfolios (hint: the blue Monday led to a week of red). ☹
Weekly Market Review
Monday: Another rough day in the stock market as oil spiked to USD$ 130.50 a barrel, its highest price since 2008. On Canada’s Toronto Stock Exchange (TSX), higher oil prices led to higher share prices for Energy sector stocks which minimized today’s broader decline. The Utilities, Materials, Consumer Defensive were the other sectors to finish with more than a 1% gain today, not enough to compensate for larger losses in the Consumer Cyclical, Technology and Financials sectors.
In the US, the S&P 500 Index (S&P), Nasdaq Composite Index (Nasdaq) and the Dow Jones Industrial Average (DJIA) all fell more than 2% on fears a ban on Russian oil imports would lead to increasing energy costs, rising inflation and could halt economic growth. Todays decline by the DJIA means it has fallen over 10% since its early January record high and, by definition, is now in a correction. Worse, the Nasdaq’s ended today down over 20% since its November record high, putting it in a bear market. The Energy and Utilities sectors were the only US sectors to end the day higher.
Tuesday: For the second day in a row, all four Indexes fell. On the bright side, they didn’t fall as much as on Monday. Investors in both Canada and the USA are concerned about the Ukraine invasion and its impact on the global economy and inflation. On the TSX, the Materials and Consumer Defensive sectors were the best performing sectors today, while the Technology sector was the worst performer.
In the US, President Biden banned Russian oil and other energy imports from the US. The Energy sector continues to lead the charge, but it was not enough to offset losses in the Consumer Defensive, Healthcare, and Utilities sectors. Some positive news for me was some of the mega cap growth stocks inched upward. Not much, but at least it was in the right direction.
Wednesday: A great day for the North American stock market today, with the TSX the only one of the four major Indexes not up 2% or more. All four Indexes were led by the Technology, Consumer Cyclical and Financials sectors. The Energy sectors in both countries fell when it was announced OPEC would support increasing oil exports to compensate for the loss of oil caused by the sanctions on Russia.
In Canada, Shopify (TSX:SHOP) jumped 13% to lead the Canadian Technology sector rebound. In America, The S&P had its best one-day gain since June 2020 and the Nasdaq had its biggest gain since March 2021.
Thursday: The US Labour Department reported over the last 12 months that the US inflation rate jumped 7.9%, the highest point since 1982. In Canada, the inflation sits at 5.1%, the highest since 1991. And that doesn’t include the latest surge in fuel prices in both countries. If those numbers aren’t bad enough, Russia’s invasion of Ukraine could land another nasty shock by driving energy prices higher.
In Canada, the TSX rose on the strength of the Energy and Materials sectors, again. In the US, all three Indexes resumed their decline after Wednesday’s technology driven rally. The four-decade high inflation rate all but confirmed the US Federal Reserve will be raising interest rates next week. The ongoing conflict in Ukraine is only adding to fears of inflation. Rising energy prices can’t help but drive up the cost of heating, food and just about everything else.
Friday: The week started on a down note Monday and ended with a down day on Friday with all four Indexes posting a loss for the day. In Canada, the economy added twice as many jobs as forecasted, causing the unemployment rate to fall below its pre-pandemic level for the first time. Not only have more people returned to work, but the average hourly wage is also slightly higher. This will likely lead to another interest rate hike in the future. The expectant interest hike, the Ukraine situation and taking some profit after a 1 month high likely led to today’s drop. Despite today’s decline, the TSX still inched into positive territory for the week the third consecutive week.
In the US, once again the Indexes took a tumble. The broad-based decline (all the S&P sectors fell) was fueled by the Ukraine invasion, anticipation of an interest rate hike at next week’s US Federal Reserve meeting, and probably investors taking some money off the table going into the weekend and given the volatile Ukraine situation.
For the week, the TSX gained .3%, the S&P 500 fell 2.88%, the DJIA dropped 2%, and the Nasdaq shed 3.53%.
Weekly Portfolio Review
If you’re primarily invested in commodities on the TSX, you had another good week. If you’re like me with a slight majority of your investments in the US market, with a high growth technology bias, it was not a great week, again. Despite a strong surge on Wednesday, the three American Indexes still had a weekly decline of 2% or greater. For the DJIA, it was the fifth week in a row.
As all three Portfolios have a strong technology component, it was another poor week for the Portfolios. Once again, the more balanced Portfolio 2 declined the least There might be something to this balanced approach. 😊
Companies on the Radar
With the news that Amazon (NASD:AMZN) will be splitting 20 for 1 in late May, the company has piqued my interest, even if I only buy 1 or 2 shares now so I’ll have 20 or 40 post split. Not much, but Amazon is dominant in a few high growth areas such as cloud services and e-commerce. They also plan a shareholder friendly $10 billion buyback of shares, meaning my shares would be worth a tiny bit more. Joining Amazon on my watch list are:
Portfolio Update
Portfolio 1
Portfolio 1 for the week ended March 11, 2022: DOWN 
Google (NASD:GOOGL) is buying cybersecurity firm Mandiant (NASD:MNDT) for $5.4 billion, their second largest ever. This acquisition provides another diverse revenue stream in the fast-growing cybersecurity field to go along with their core digital advertising business. It also allows Google to more effectively compete against cloud rivals Microsoft and Amazon in the cloud infrastructure industry. The shift to working remotely during the pandemic, as well as the Russia – Ukraine conflict, has fueled a spike in cyberattacks and bolstered demand for security software, a market expected to more than double to $352.25 billion by 2026
On the electric vehicle front, Rivian (NASD:RIVN) committed a PR blunder when they announced a price increase on pre-ordered vehicles. They had to throw it into reverse after customer pushback (surprise). Anyone who had pre-ordered a Rivian vehicle will get the price they were quoted while new orders will get the higher price. Rivian blamed the price increase on supply chain issues. They should’ve foreseen the negative publicity that announcement would generate and the potential loss of goodwill and feel-good vibe around the company. A simple announcement of a price increase on all new sales as a result of supply chain issues would have done the job, which is exactly what they have now. An unforced error in my book.
Adding to Rivian’s troubles, Rivian sliced its production forecast in half due to thanks to the Ukraine invasion. Surging prices for raw materials have led to ongoing supply chain disruptions.
It was a busy week for GM (NYSE:GM) as they made several announcements this past week. First, they will launch a new independently owned, premium brand in China that will import GM vehicles currently unavailable in China. Next, they will partner with a South Korean company build a facility in Quebec that will produce cathode active material (CAM) for their Ultium batteries which will be used in electric vehicles. Finally, GM will work with Pacific gas and Electric in California to determine how electric vehicles can be used to power home during brownouts and blackouts. GM is certainly putting their money where their mouth is when it comes to electric vehicles.
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 $
TMX Group Ltd
US $
No US$ dividends this past week.
Quarterly Reports
CargoJet Inc.
All currency listed in CAD dollars
Selected highlights from their fourth quarter 2021 financial results on March 7, 2022
Fourth quarter highlights
- Revenues for the quarter were $235.9 million compared to fourth quarter 2020 Revenues of $187.1 million.
- Net income for the quarter was $102.0 million (net income of $33.4 million excluding warrant valuation gain) compared to net loss of $20.5 million in 2020 (net income of $27.4 million excluding warrant valuation loss).
- Total revenue growth of 26.1% for the quarter compared to prior year reflected the results of our previously announced diversification strategy that is helping deliver a balanced portfolio growth where each line of business is a strong contributor.
Fiscal 2021 highlights
- Revenues for the year were $757.8 million compared to 2020 Revenues of $668.5 million.
- Net income for the year was $167.4 million (net income of $88.4 million excluding warrant valuation gain) compared to net loss of $87.8 million in 2020 (net income of $90.1 million excluding warrant valuation loss).
Viemed Healthcare, Inc.
All currency listed in USD dollars
Selected highlights from their fourth quarter 2021 financial results on March 7, 2022
Fourth quarter highlights
- Total net revenues for the current quarter were $32.0 million.
- Net revenues attributable to the Company’s core business for the quarter ended December 31, 2021, were $29.0 million, a new Company record and an increase of 11% over the quarter ended December 31, 2020.
- Net income for the quarter ended December 31, 2021, totaled approximately $4.1 million, compared to $5.1 million for the quarter ended December 31, 2020.
Fiscal 2021 highlights
- Net revenues for the year ended December 31, 2021, were $117.1 million for the Company, including $8.6 million of COVID-19 related sales and services.
- Net income for the year ended December 31, 2021, totaled approximately $9.1 million, compared to $31.5 million for the year ended December 31, 2020. In the prior year, net income included an income tax benefit of $5.2 million and $34.4 million of COVID-19 response sales and services during the height of the COVID-19 pandemic.
- The Company had a cash balance of $28.4 million on December 31, 2021. Total long-term debt as of December 31, 2021, was $4.3 million.
Nuvei Corporation
All currency listed in USD dollars
Selected highlights from their fourth quarter 2021 financial results on March 8, 2022
Fourth quarter highlights
- Revenue increased 83% to $211.9 million from $115.9 million.
- Net income decreased to $12.3 million from $22.6 million, primarily due to a $29.7 million increase in share-based payments to employees who joined the Company as part of acquisitions completed during the third quarter and other employee incentive grants.
- Total volume increased 127% to $31.5 billion from $13.9 billion
Fiscal 2021 highlights
- Revenue increased 93% to $724.5 million from $376.2 million.
- Net income increased by $210.7 million to $107.0 million compared to a net loss of $103.7 million.
- Free cash flow increased by 100% to $290.1 million from $145.1 million.
- Cash balance of $748.6 million on December 31, 2021, compared to $180.7 million on December 31, 2020.
Crew Energy Inc.
All currency listed in CAD dollars
Selected highlights from their fourth quarter 2021 financial results on March 8, 2022
Fourth quarter highlights
- The fourth quarter 2021 petroleum and natural gas sales increased 142% as compared to the same period in 2020.
- Light crude oil price increased 90% over the fourth quarter of 2020, which was higher than the Company’s WTI benchmark increase of 75%.
- Average realized ngl (natural gas liquids) price increased 161% in the fourth quarter as compared to the same period in 2020.
Fiscal 2021 highlights
- Petroleum and natural gas sales increased 141% as compared to the prior year as a result of a 101% increase in the average realized commodity price combined with an increase in production.
- Light crude oil price increased 90%, which was higher compared to the 62% increase in the WTI benchmark.
- Average realized ngl price increased 130% over the same period in 2020, due to increases in product pricing for butane and pentane across North America.
Crowdstrike Holdings, Inc.
All currency listed in USD dollars
Selected highlights from their fourth quarter 2021 financial results on March 9, 2022
Fourth quarter highlights
- Total revenue was $431.0 million, a 63% increase, compared to $264.9 million in the fourth quarter of fiscal 2021.
- Annual Recurring Revenue (ARR) increased 65% year-over-year and grew to $1.73 billion as of January 31, 2022, of which $216.9 million was net new ARR added in the quarter.
- GAAP net loss was $42.0 million, compared to $19.0 million in the fourth quarter of fiscal 2021.
- Free cash flow was $127.3 million, compared to $97.4 million in the fourth quarter of fiscal 2021.
Fiscal 2021 highlights
- Total revenue was $1.45 billion, a 66% increase, compared to $874.4 million in fiscal 2021.
- GAAP net loss was $234.8 million, compared to $92.6 million in fiscal 2021.
- Free cash flow was $441.8 million, compared to $292.9 million in fiscal 2021.
- Added 1,638 net new subscription customers in the quarter for a total of 16,325 subscription customers as of January 31, 2022, representing 65% growth year-over-year.
- subscription customers that have adopted four or more modules, five or more modules and six or more modules increased to 69%, 57%, and 34%, respectively, as of January 31, 2022.
Marqueta, Inc.
All currency listed in USD dollars
Selected highlights from their fourth quarter 2021 financial results on March 9, 2022
Fourth quarter highlights
- Generated $155 million in fourth quarter net revenue, up 76 percent year-over-year.
- Gross profit of $76 million during the quarter, up 108% year-over-year.
- Net loss was ($37 million)
- $33 billion in fourth quarter total processing volume, a 76 percent increase year-over-year.
Fiscal 2021 highlights
- Generated $517 million in annual revenue, up 78 percent from 2020.
- Gross profit of $232 million during the year, up 97% from the year prior.
- GAAP net loss of ($164 million)
- Annual total processing volume up 85 percent year-over-year to $111 billion.
ZIM Integrated Shipping Service Ltd.
All currency listed in USD dollars
Selected highlights from their fourth quarter 2021 financial results on March 9, 2022
Fourth quarter highlights
- Revenues for the fourth quarter were $3.47 billion, a year-over-year increase of 155%.
- Net income for the fourth quarter was $1.71 billion, compared to $366 million in the fourth quarter of 2020, a year-over-year increase of 366%.
Fiscal 2021 highlights
- Revenues for the full year were $10.73 billion, a year-over-year increase of 169%.
- Net income for the full year was $4.65 billion (compared to $524 million for the full year of 2020), a year-over-year increase of 787%.
- Carried volume in the full year was 3,481 thousand TEUs, a year-over-year increase of 23%, significantly above industry average growth.
- Declared $17.00 per share dividend.
Rivian Automotive
All currency listed in USD dollars
Selected highlights from their fourth quarter 2021 financial results on March 10, 2022
Fourth quarter highlights
- Total revenues for Q4 2021 were $54 million, driven by the delivery of 909 vehicles.
- Net loss for Q4 2021 was $(2,461) million as compared to $(353) million for the same period last year.
- Ended Q4 2021 with $18,423 million in cash, cash equivalents, and restricted cash.
Fiscal 2021 highlights
- Total revenues were $55 million, supported by 920 total vehicle deliveries.
- Net loss of $(4,688) million as compared to $(1,018) million in 2020.
- Produced 1,015 and delivered 920 vehicles for the full year 2021
DocuSign, Inc.
All currency listed in USD dollars
Selected highlights from their fourth quarter 2021 financial results on March 10, 2022
Fourth quarter highlights
- Total revenue was $580.8 million, an increase of 35% year-over-year. Subscription revenue was $564.0 million, an increase of 37% year-over-year.
- Gross margin was 77%, compared to 76% in the same period last year.
- Net loss per basic and diluted share was $0.15 on 199 million shares outstanding compared to $0.38 on 189 million shares outstanding in the same period last year.
Fiscal 2021 highlights
- Total revenue was $2.1 billion, an increase of 45% year-over-year. Subscription revenue was $2.0 billion, an increase of 47% year-over-year.
- Gross margin was 78%, compared to 75% in fiscal 2021.
- Net loss per basic and diluted share was $0.36 on 197 million shares outstanding compared to $1.31 on 186 million shares outstanding in fiscal 2021.
- Authorized a stock repurchase program of up to $200 million of DocuSign’s outstanding common stock.
Docebo Inc.
All currency listed in CAD dollars
Selected highlights from their fourth quarter 2021 financial results on March 10, 2022
Fourth quarter highlights
- Revenue of $29.8 million, an increase of 59% from the same period in the prior year.
- Gross profit of $23.7 million, an increase of 50% from the comparative period in the prior year, or 80% of revenue compared to 84% of revenue for the comparative period in the prior year
- Net loss of $1.4 million, compared to net loss of $4.1 million from the same period in the prior year.
Fiscal 2021 highlights
- Revenue of $104.2 million, an increase of 66% from the prior year.
- Gross profit of $83.5 million, or 80% of revenue.
- Net loss of $13.6 million, compared to net loss of $8.0 million for the prior year.
AcuityAds Holdings Inc.
All currency listed in CAD dollars
Selected highlights from their fourth quarter 2021 financial results on March 10, 2022
Fourth quarter highlights
- Total revenue was $36.8 million, a 33.9% sequential increase from the third quarter of 2021, a 5% year over year increase.
- Net income was $2.5 million, compared to net income of $4.2 million for the three months ended December 31, 2020.
- Cash and cash equivalents of $102.2 million, compared to $22.6 million as of December 31, 2020.
Fiscal 2021 highlights
- Total revenue was $122.0 million, an increase of 16.3% compared to the same period in 2020.
- Net income increased 186% to $10.6 million for the year ended December 31, 2021, compared to net income of $3.7 million for the year ended December 31, 2020.
Magnet Forensics
All currency listed in USD dollars
Selected highlights from their fourth quarter 2021 financial results on March 10, 2022
Fourth quarter highlights
- Revenue of $21.4 million, an increase of 37% compared to $15.6 million.
- Total Recurring Revenue(1) was $17.6 million, representing 82% of total revenue.
- Gross Margin was 93%, compared to 96%. The change is primarily due to an increase in professional services, which offers lower margin revenue than licence or maintenance and support revenue.
- Net Income was $0.8 million, a decrease of $3.7 million compared to $4.5 million. The change is primarily due to increased investments in Research & Development and Sales & Marketing, including restricted share unit expenses for 2021 awards in the period.
Fiscal 2021 highlights
- Revenue of $70.3 million in FY 2021, an increase of 37%.
- Gross Margin of 93% in FY 2021.
- Net income of $7.3 million in FY 2021, a decrease of 31%
Portfolio 2
Portfolio 2 for the week ended March 11, 2022: DOWN
TC Energy (TSX:TRP) announced it will not be reviving the Keystone XL pipeline project, despite the huge demand for oil caused by the Russian invasion of Ukraine. I’d like to think the Canadian and US federal governments will use a bit of common sense and ‘encourage’ TC Energy to reconsider restarting the project. Its better for both countries to get oil and natural gas from a reliable partner rather than an unpredictable autocratic government, such as Russia, Iran, Venezuela and Saudi Arabia. Then again, throw politics into the mix and common sense is the first casualty.
MongoDB (NASD:MDB) had a very good earnings report. Part of the reason for better revenues was increasing business through partnerships with leading cloud providers Amazon Web Services, Microsoft Azure and Google Cloud.
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 $
No C$ dividends this past week.
US $
Microsoft Corp.
Quarterly Reports
MongoDB, Inc.
All currency listed in USD dollars
Selected highlights from their fourth quarter 2021 financial results on March 8, 2022
Fourth quarter highlights
- Total Revenue of $266.5 million, up 56% Year-over-Year
- Gross profit was $190.7 million in the fourth quarter fiscal 2022, representing a 72% gross margin, up from a 70% gross margin in the year-ago period.
- Net loss was $84.4 million, based on 67.0 million weighted-average shares outstanding in the fourth quarter fiscal 2022, compared to a net loss of $75.8 million, based on 60.5 million weighted-average shares outstanding, in the year-ago period.
Fiscal 2021 highlights
- Total Revenue of $873.8 million, up 48% Year-over-Year.
- Gross profit was $614.3 million for the full year fiscal 2022, representing a 70% gross margin compared to 70% the prior year.
- Net loss was $306.9 million, based on 64.6 million weighted-average shares outstanding, compared to a net loss of $266.9 million, based on 59.0 million weighted-average shares outstanding, in the prior year.
- Strong Customer Growth with Over 33,000 Customers as of January 31, 2022.
Portfolio 3
Portfolio 3 for the week ended March 11, 2022: DOWN
After a 1-day share price jump of 13% on Wednesday, Shopify resumed its downward trajectory. I am not too worried as the entire technology heavy Nasdaq Index has been getting hammered for the last 4+ months. I couldn’t find any reason for the pop so I investors must have felt Shopify had fallen so far it was a bargain and it was a great time to buy shares of Canada’s largest technology company.
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 $
No C$ dividends this past week.
US $
Microsoft Corp.
Quarterly Reports
Viemed Healthcare, Inc.
All currency listed in USD dollars
Selected highlights from their fourth quarter 2021 financial results on March 7, 2022
Fourth quarter highlights
- Total net revenues for the current quarter were $32.0 million.
- Net revenues attributable to the Company’s core business for the quarter ended December 31, 2021, were $29.0 million, a new Company record and an increase of 11% over the quarter ended December 31, 2020.
- Net income for the quarter ended December 31, 2021, totaled approximately $4.1 million, compared to $5.1 million for the quarter ended December 31, 2020.
Fiscal 2021 highlights
- Net revenues for the year ended December 31, 2021, were $117.1 million for the Company, including $8.6 million of COVID-19 related sales and services.
- Net income for the year ended December 31, 2021, totaled approximately $9.1 million, compared to $31.5 million for the year ended December 31, 2020. In the prior year, net income included an income tax benefit of $5.2 million and $34.4 million of COVID-19 response sales and services during the height of the COVID-19 pandemic.
- The Company had a cash balance of $28.4 million on December 31, 2021. Total long-term debt as of December 31, 2021, was $4.3 million.
AcuityAds Holdings Inc.
All currency listed in CAD dollars
Selected highlights from their fourth quarter 2021 financial results on March 10, 2022
Fourth quarter highlights
- Total revenue was $36.8 million, a 33.9% sequential increase from the third quarter of 2021, a 5% year over year increase.
- Net income was $2.5 million, compared to net income of $4.2 million for the three months ended December 31, 2020.
- Cash and cash equivalents of $102.2 million, compared to $22.6 million as of December 31, 2020.
Fiscal 2021 highlights
- Total revenue was $122.0 million, an increase of 16.3% compared to the same period in 2020.
- Net income increased 186% to $10.6 million for the year ended December 31, 2021, compared to net income of $3.7 million for the year ended December 31, 2020.