Despite all the rumblings in the world of geopolitics and macro-economics, the Toronto Stock Exchange 300 Composite Index (^GSPTSE) continued its steady upward progression last week with a further gain of 0.8%. The market has now added 5.24% so far this year, making it one of the best performing global markets in local currency terms. Converted into U.S. dollars, the performance was of course much weaker.
One of the companies that I highlighted last week, Alimentation Couche Tard (TSX: ATD.B) had a spectacular week, adding more than 10% after reporting good results and 3-for-1 share split. The weekly share performance leaderboard also had a welcome change in composition as a number of industrial and oil and gas exploration companies moved to the top.
Watch the performance of these three companies this week
The highly anticipated BlackBerry (TSX: BB)(NASDAQ: BBRY) results for the fourth quarter of the 2014 financial year (ending 1 March) will be reported on Friday. The market consensus expectation is a loss of $0.53 per share for the quarter versus a profit of $0.22 a year ago. The new CEO, John Chen, has been in charge since November 2013 and has moved quickly to refocus the company strategically, bolster the balance sheet, and reduce operating costs.
Key focus points will be on early successes with these items, especially the reduction in operating costs and the maintenance of a strong balance sheet. The cash balance at the end of the previous quarter was $3.2 billion; Fairfax Financial (TSX: FFH) subscribed for another $250 million of convertible debentures during the quarter and some properties were sold as well. This should counter some of the further cash burn expected during the quarter. The share price has done well since the new CEO took the helm, but investors will now want to start seeing improvement in the financial performance.
The investment management firm AGF Management (TSX: AGF.B) will report on Wednesday an expected earnings per share of $0.12 compared to $0.17 a year ago. Assets under management (AUM) are the lifeblood for investment management companies. AUM peaked at $54 billion in 2007 but declined to $34 billion at the end of November 2013. Some recovery was evident over the past two months but it will not be enough to get the profits above the comparable level a year ago.
The company pays a very attractive dividend for a yield of over 8% on the current share price. However, the downward trend in AUM and profits will need to be turned to ensure the sustainability of the dividend.
Alliance Grain Traders (TSX: AGT) is a processor of pulses, staple foods and ingredients for export and domestic markets as well as a supplier of retail packaged and canned foods to the retail and food service sectors. It operates in Canada and the U.S. and several other countries around the world.
The company is expected to report on Monday profits of $0.33 per shares compared to $0.19 a year earlier. The business performance was very patchy since 2010, but the share price has recently performed well probably indicating that the market is looking forward to better results.
