S&P/TSX Broadly Higher on Christmas Cheer

Lots of corporate news amid quiet trading

| More on:
The Motley Fool

Equity markets closed broadly higher Friday led by gains in the financial, mining, and energy sector. The TSX was closed for the Boxing Day holiday, so Canadian stocks were playing catch-up to their American counterparts.

Optimism as a results of the U.S. Federal Reserve’s easy monetary policy and a bright outlook for global economic growth continued to push equity prices higher. The S&P/TSX Composite Index (^OSPTX) finished the day up 69.96 points, or 0.52%, to 13,587. In the United States, the broad base S&P 500 finished roughly flat down 0.62 points, or 0.03%, in light trading.

But while the wider stock market were relatively quiet on Friday, there’s was plenty of corporate news driving individual issues.

Saputo’s (TSX:SAP) bidding war for Australia’s Warrnambool Cheese and Butter Factory continues to heat up. Bega Cheese, the largest shareholder in Warrnambool, announced that the company was in talks with ‘non-Australian’ investors on a possible sale of its stake.

In September, Bega kicked off a takeover battle with Saputo dairy giant for the Australian cheese maker, but the company declined to extend its final offer last week. For Saputo, Warrnambool is seen as an important foothold into the Asia-Pacific region. Saputo shares finished the trading day down 0.29% to $48.26 per share.

In other corporate news, filings from Mike Lazaridis, co-founder and former Chief Executive of BlackBerry (TSX:BB, NASDAQ:BBRY), announced the sale of $26.5 million of BlackBerry stock. The reduces his combined stake with co-founder Doug Fregin to below 5% from 8%.

Many investors had hoped Lazaridis would ride to the rescue and take the troubled company over in some sort of privatization deal. But today’s announcement likely takes any future bid off the table and could be interpreted as a vote of non-confidence in John Chen’s turnaround strategy. BlackBerry shares finished the day down 5.09% to $7.83 per share.

And finally Sherritt International (TSX:S) is facing pressure from an activist shareholder, news that was overshadowed this week due to the sale of the company’s coal business. Clarke Chief Executive George Armoyan, the company’s largest shareholder, told the Wall Street Journal that wants Sherritt to reduce its board size to seven from nine seats and replace three directors with its nominees.

Mr. Armoyan is also disappointed with the company’s stock price and recent operational performance as highlighted by the loss the company will take on the sale of its coal business. He believes that the current set of directors own too little of Sherritt stock to justify their current compensation.

I’m not familiar enough with Sherritt’s business to provide instant commentary on Mr. Armoyan’s remarks. But as we have seen at Barrick Gold and Canadian Pacific, activists have a tendency to shake up complacent management teams and create value for their fellow shareholders. I do believe this stock should certainly be added to investors’ watchlists in the New Year.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Disclosure: Robert Baillieul has no positions in any of the stocks mentioned.

More on Investing

Nuclear power station cooling tower
Metals and Mining Stocks

If You’d Invested $1,000 in Cameco Stock 5 Years Ago, This Is How Much You’d Have Now

Cameco (TSX:CCO) stock still looks undervalued, despite a 258% rally. Can the uranium miner deliver more capital gains to shareholders?

Read more »

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

TFSA Magic: Earn Enormous Passive Income That the CRA Can’t Touch

If you're seeking out passive income, with zero taxes involved, then get on board with a TFSA and this portfolio…

Read more »

Man with no money. Businessman holding empty wallet
Dividend Stocks

2 Stocks Under $50 New Investors Can Confidently Buy

There are some great stocks under $50 that every investor needs to know about. Here’s a look at two great…

Read more »

potted green plant grows up in arrow shape
Stocks for Beginners

3 Growth Stocks I’m Buying in April

These three growth stocks are up in the last year, and that is likely to continue on as we keep…

Read more »

clock time
Tech Stocks

Long-Term Investing: 3 Top Canadian Stocks You Can Buy for Under $20 a Share

These three under-$20 stocks offer excellent buying opportunities for long-term investors.

Read more »

Arrowings ascending on a chalkboard
Energy Stocks

Beat the TSX With This Cash-Gushing Dividend Stock

Canadian Natural Resources stock is well set up to beat the TSX as it continues to generate strong cash flows…

Read more »

think thought consider
Dividend Stocks

Down 10.88%: Is ATD Stock a Good Buy After Earnings?

Alimentation Couche-Tard (TSX:ATD) stock might not be the easy buy-case it once was. Here’s a look at what happened.

Read more »

money cash dividends
Dividend Stocks

TFSA Dividend Stocks: Earn $1,200/Year Tax-Free

Canadian stocks like Fortis are a must-have in your portfolio to earn tax-free yields for decades.

Read more »