Market News
The TSX Composite, S&P 500 and DJIA all ended the week lower than they started. With September traditionally being more volatile I suspect the pullback is a result of some profit taking happening as investors lock in gains after a bullish September.
All 3 portfolios ended down for the week, with portfolio 2 falling the least as it is designed to be less volatile.
Companies on the Radar
Two companies popped up on my radar this week – Yotpo and Mammoth Biosciences. Unfortunately, both are private companies, but I wouldn’t be surprised to see them go public within 12 months.
Yotpo is an ecommerce marketing platform that helps brands accelerate growth. They are founder led and based in Israel with offices in New York and London. They came onto my radar with an announcement from Shopify that they are making a strategic investment of $30 million in Yotpo. If a market leading company invests in a smaller company, I want to know more about this smaller company to see if I’d like to own a piece, albeit very small piece, of the company. If a small cap company turns out to be a winner there is a long runway ahead of it and I’d prefer getting in closer to the beginning than halfway through.
Mammoth Biosciences is developing CRISPR (Clustered Regularly Interspaced Short Palindromic Repeats) systems to ‘read and write the code of life.’ The company, based in San Francisco, is founder led (4 founders) with one of the founders winning the 2020 Nobel Prize in chemistry for co-discovering CRISPR in 2012. The company ‘is enabling the full potential of its platform to read and write the code of life … addressing challenges across healthcare, agriculture, environmental monitoring, biodefense, and more.’ I don’t know much about the biotech industry, but CRISPR is an emerging technology with great potential.
If either of these companies announce they are going public, I’ll be very interested to get a closer look at them.
Portfolio Update
Portfolio 1
Portfolio 1 for the week ended September 10, 2021: DOWN 
The acquisition of Great Canadian Gaming Corporations (TSX:GC) by Raptor Acquisition Corp., an affiliate of Apollo Funds, received all the required regulatory approvals. Raptor will acquire all the issued and outstanding common shares of the GC at a price of C$45.00 per Share. The anticipated closing date is September 23, 2021. Once the deal is completed its expected GC will be delisted from the TSX.
This will free up some cash to either add to existing positions or to start a position in a new company. Either way its time to go shopping.
Activity
Bought ZIM Integrated Shipping Services Ltd (NYSE:ZIM) ZIM appears to have experienced and visionary leadership; strong corporate culture per Glassdoor; growing revenues and net income; using technology to disrupt the marine shipping industry. There will always be a need for shipping, be it trucking, rail or ship. As more businesses and individuals buy everything from raw materials to finished goods from across the globe, marine shipping is the most cost-effective way of transporting goods between continents. Finally, ZIM is part of the Industrials sector, so it also provides diversification for this tech heavy portfolio.
This is another company where I thought there would be a bit of pullback due to profit taking after a strong upward push. I was wrong twice this week before finally acquiring shares of the business.
Lesson: More of a reminder, I’ve no idea what the market or the share price of individual companies will do. If you want a company don’t try to outsmart the market, especially for a few cents a share.
As per last weeks Activity report of the merger of KushCo Holdings and Greenlane Holdings, the KushCo shares have been exchanged for shares of Greenlane Holdings (NASD:GNLN).
Dividends
Dividends Received this week for the following companies:
Canadian $
No Canadian$ dividends this week.
US $
Skyworks Solutions Inc. (NASD:SWKS)
Quarterly Reports
No quarterly reports this past week.
Portfolio 2
Portfolio 2 for the week ended September 10, 2021: DOWN
Activity
No significant activity to report this week.
Dividends
Dividends Received this week for the following companies:
Canadian $
No Canadian$ dividends this week.
US $
Quarterly Reports
No quarterly reports this week.
Portfolio 3
Portfolio 3 for the week ended September 10, 2021: DOWN
Activity
No activity to report
Dividends
Dividends Received this week for the following companies:
Canadian $
No Canadian$ dividends this week.
US $
Quarterly Reports
Enghouse Systems (TSX:ENGH)
Selected highlights from their September 9, 2021 3Q22press release
https://www.enghouse.com/wp-content/uploads/2021/09/20210909-Q321-Press-Release.pdf
Financial and operational highlights for the three and nine months ended July 31, 2021 compared to the three and nine months ended July 31, 2020 are as follows:
- Revenue achieved was $117.6 and $354.1 million, respectively, compared to revenue of $131.3 and $382.9 million;
- Results from operating activities was $38.5 and $116.1 million, respectively, compared to $42.2 and $119.3 million;
- Net income was $21.2 and $62.6 million, respectively, compared to $26.0 and $69.2 million;
- Adjusted EBITDA was $41.7 and $126.4 million, respectively, compared to $45.6 and $130.2 million while Adjusted EBITDA margins increased from 34.0% to 35.7% for the current year to date period;
- Cash flows from operating activities excluding changes in working capital was $41.1 and $125.4 million, respectively compared to $45.3 and $130.5 million.
The decrease reflects exceptional revenue in the comparative period as a result of COVID-19 related demand.
During the quarter, Enghouse completed two tuck-in acquisitions, adding Nebu BV on June 3, 2021 and Momindum SAS on July 7, 2021.
the Board of Directors approved the Company’s eligible quarterly dividend of $0.16 per common share payable on November 30, 2021 to shareholders of record at the close of business on November 16, 2021.