May 2021 Update - $CSW/A.to, $OSS.v, $REPH, $ISDR, $PSD.to, ISV.to, $STC.v, $VLN.to, $VMD.to, $SYZ.to, $MCB.to, $FRD, $FRII.to, $MTLO.v, $DWSN, $FXC.to, $PZA.to, $MCR.to
TIKR
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Thoughts on Market Activity
Another busy month.
This month continued the debate on whether or not the current inflation readings are transitory or more permanent. I’m not smart enough to know. Most seem to be over the worry about covid in the first world.
Personally, my portfolio took it on the chin this month. Bigger holdings in $STC.v and $VMD.to are the main culprits. I continue to believe in both businesses over the long term so I continue to hold. I’m still finding some interesting ideas, but they are more cyclical or neglected with lots of uncertainty.
Posts this month
Developments on Companies Mentioned
Corby Spirit and Wine Limited - $CSW/A.to & $CSW/B.to
Reported fiscal Q3 2021
In line with expectations
Lots of lockdowns so in person dining is hit
But people still drinking
At about 4.8% yield
They’ve have issued special dividends before, as things recover and cash builds on the balance sheet, they may do it again as they now have almost $3 per share in cash
OneSoft Solutions - $OSS.v
Reported Q1
A little below my expectations
Last year had a large amount of data uploaded which led to a very tough comp
Still holding
Recro Pharma - $REPH
Reported Q1 2021
Results were better than expected
They provided full year guidance and the market reacted well
the business seems to have bottomed and having the visibility for full year results is a positive
AWM announced an initial position
4.8 mil shares
I’m assuming they picked some up during the recent issuance
Can’t find a ton of info on the fund, but this does not look like a top 10 holding for them based on the last round of 13F’s
Issuer Direct - $ISDR
Reported Q1
Rev up 32%
Profitability up yoy and flatish from Q4
Outlook was positive
Pulse Seismic - $PSD.to
Announced a data license agreement for 17mil
Immediate rev of 7.3mil
Remaining 9.7mil by April 15, 2022
YTD rev (17.2) is way ahead of full year 2020 rev
Information Services Corp - $ISV.to
Reported Q1
Better than expected
The real estate market in Sask was stronger than I expected
It will be interesting to see what the rest of the year looks like given that the seasonality weak quarters were strong and there may be some demand pulled forward in parts of the business but also other parts (Paragon for example) are being held back due to stimulus
Sangoma Technologies Corp - $STC.v
Reported fiscal Q3 2021
Weaker than expected due to stronger CAD
Star2Star integration going fine
Not much detail on uplisting at this point
Velan - $VLN.to
Released fiscal Q4 2021
Way weaker than I expected and shares tumbled on the day
Production issues in north America from selling the plant earlier than expected in 2020
Delays due to covid and supply chain interruptions
Backlog is up so it’s nice to see demand for their products
Still holding, going to regroup on this one
Viemed - $VMD.to
Reported Q1
A little weaker than I was expecting
Guidance was pretty good
I really like the adjacent initiatives they have to drive customer value
Responded to a report from OIG
I’ve read the report a few times and I’m still trying to wrap my head around the implications
Sylogist - $SYZ.to
Reported Q1 2021
Was weaker than expected
Seems like a mix of currency headwinds and covid lockdowns
I still follow and am curious if they can find some more acquisition candidates
McCoy Global - $MCB.to
Reported Q1 2021
Was weak as expected
Continue to develop their product suite to support a fully automated TRS (Tubular Running Services) for end of 2022
Friedman Industries - $FRD
Ault Global Holdings announced a 416,000 share position or 6%
They have gone activist on company’s in the past and this will be interesting to watch
Provided Q4 guidance and new faciility
Expect earnings in Q4 to be 9.5-10.5 mil and EPS $1.37-1.52
The most profitable in history
Steel prices have been moving if you haven’t noticed
New facility
21 mil cost
Estimated 3 million ton capacity
New equipment in Decatur
Started in May 2021
Shares have performed really well – wish I have bought some
Freshii - $FRII.to
Reported Q1 2021
Weak as expected
They seem to be gaining some traction with the app and some omnichannel opportunity
Q2 will likely be weak as lockdowns in Canada persist, although likely not as weak as Q2 2020
Canada is doing well with administering vaccine and many provinces are talking about reopen, FRII now has to demonstrate how they can succeed in a more normal environment
Martello Technologies Group Inc - $MTLO.v
Launched cloud-based mulit0tenant Microsoft 365 monitoring platform
Sounds like this will be meaningful to revenue in 2022
Dawson Geophysical – $DWSN
Reported Q1 2021
Weak as expected though better sequentially
Maybe see a bounce in activity if oil remains at these levels
I’ve stopped following the company closely as the shares are continuing to trade above NCAV
I’m going to stop providing updates from this point on as this is really just a NCAV play
FAX Capital - $FXC.to
Announced Q1
Book value up 6% sequentially and 24% yoy
Held AGM virtually – some interesting points
Approved the amended voluntary measures by-law
This gives them a little more flexibility on positions allowing for up to 2 holdings to a max of 25% of assets (each)
They are happy with the pace of cash deployment
They have monetized two investments which had led to cash on the balance sheet being higher than expected
I don’t think I understood the potential they see in Carson Dunlop
They gave some additional color on the call which was appreciated
Pizza Pizza Royalty Corp - $PZA.to
Reported Q1 2021
As expected results were quite a bit weaker than last year as there was little to no covid impact in Q1 2020
Most of their markets had delivery and pick-up only for the quarter
Noted they are looking to grow the restaurant base by 5%
The tone on the call was more positive than typical
As Canada continues with it’s vaccine program we should see reopen happen slowly
Macro Enterprises - $MCR.v
Announced a contract for NGTL expansion project
Positive news to win some work
Min value of 190 mil
Announced Q1 2021 and AGM
Confirmed min 250 rev for 2021
Dean
*Long $OSS.v, $ISDR, $PSD.to, $STC.v, $VLN.to, $VMD.to, $MCB.to, $FRII.to, $FXC.to, $MCR.to at time of writing