MY JOURNAL FOR TUESDAY MORNING – NOVEMBER 12, 2019
NEWS, BREAKOUTS, MOMENTUM PLAYS, & BOTTOMS
Ryan Modesto, 5i Research, Top Picks: November 7, 2019
Ryan Modesto’s Top Picks
Ryan Modesto, chief executive officer at 51 Research, discusses his top picks: Knight Therapuetics, TMX Group, Lighsteed POS
KNIGHT THERAPEUTICS (TSX:GUD)
A long-awaited deal from Knight Therapeutics has finally occurred and markets received the news well. We do not think the story is done here though. The company will still have roughly 20 per cent of their market-cap remaining in cash when the deal is completed and once the acquisition is fully integrated, it should be trading around 15 to 18 times EBITDA before considering potential growth. The company has now transformed to a revenue-generating business while still having some optionality with the cash balance and no debt.
TMX GROUP (TSX:X)
TMX offers stability in a market where investors are nervous. The company has tended to increase dividends annually and is a unique asset in a space that has been seeing consolidation. Margins are stable, the balance sheet is well managed and is seeing success with its Trayport business. TMX also trades at a discount relative to most of its peers.
LIGHTSPEED POS (TSX:LSPD)
Lightspeed is one of the fastest-growing names on the TSX. It offers point-of-sale solutions for businesses that also track orders, offer analytics and help businesses manage inventory. Gross margins are in the 70-per-cent range and the company is investing heavily in growth. It recently rolled out a payments business that is seeing success and is using its cash to buy complementary businesses, which should also support growth. 90 per cent of the business is recurring in nature and there is no debt on the balance sheet. The one caveat here is that this company is not yet profitable and sports a high valuation and, in turn, is higher risk and volatile. So, while an investor might expect good things from this name, it will not necessarily be a “smooth” path to get there.
Ryan Modesto, CFA, is CEO at 5i Research, a conflict-free investment research provider for retail investors offering research reports, model portfolios and investor Q&A, which is available to try for free (Click Here)
Stock Market Outlook for November 12, 2019 – EquityClock.com 📊
On the economic front, Statscan released labour market data for the month of October. The headline print indicated that employment declined by 1,800 last month, which is much weaker than the 10,000 increase that was expected by analysts. The unemployment rate remained unchanged at 5.5%, which was a tenth of a percent below estimates of 5.6%. Stripping out the seasonal adjustments, employment actually declined by 10,000, or 0.05%, which is marginally weaker than the 0.1% increase that is average for this time of year. The year-to-date change remains above the seasonal average trend, now by three-tenths of one percent, which is the strongest pace since 2007. The Canadian Dollar dipped following the report’s release. Subscribers received further insight on what is driving employment in Canada, as well as the expected path of the domestic currency moving forward. Subscribe now.
Tech Talk is a free stock market letter service available at TimingTheMarkets.com and EquityClock.com. Ask us about the Seasonal Advantage Portfolio.
The science of technical analysis vs. the art of trading | Brian Shannon, Alpha Trends – Chat With Traders
BREAKOUTS, MOMENTUM PLAYS, & BOTTOMS 📈
Gibson Energy (TSX:GEI)
Alaris Royalty (TSX:AD)
Diversified Royalty (TSX:DIV)
Shaw Communications (TSX:SJR.B)
Russel Metals (TSX:RUS)
Capstone Mining (TSX:CS)
MOMENTUM ALERT SIGNALS 📡
Have a great day! 🙂
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