5 from 5i: Lessons from Horse Racing

Barkha Rani Feb 17, 2019

Market View

Markets turned higher after Chinese President Xi Jinping announced that the trade talks, to resolve their trade war, with the US would continue next week. Major indices are on track for another positive week, the eighth consecutive for the DOW and NASDAQ and the seventh consecutive for S&P500. The Canadian dollar was 75.29 cents U.S. S&P500 was up 2.4% this week and TSX up 1.1%.

Four of the twelve subgroups ended the week in the negative territory. Energy jumped the highest, by 6.5%, followed by technology 3.1% and healthcare 2.3%. Materials were down 1.3% and telecommunications by 0.3%. Air Canada beat quarterly profit estimates as it earned more for each sold seat. The company forecasts higher costs for 2019 as it expects its cost per available seat mile to increase 2-3% from 2018. Enbridge also beat quarterly profit estimates as more products moved through its pipelines. Net income rose to $1.09 billion in the fourth quarter, from $207 million. Berkshire Hathaway announced a stake in Suncor Energy for the second time in six years, representing 0.7% of SU’s total outstanding shares. Canopy Growth reported a 283% increase in quarterly revenue. Its net income rose to $67.6 million from $11 million last year. Higher sales and market costs ate into earnings. Bombardier beat estimates for quarterly earnings, attributed to a fall in costs and business jet sales. Canada Goose beat estimates as it sold more of its parkas during the harsh winter this year. Net income rose to $103.4 million from $63 million the year prior, and earnings came in 96 cents per share versus estimates of 81 cents. Canadian Tire reported quarterly profit beating estimates. This was helped by strong demand for toys and electronics.  Manulife Financial reported a 9% increase in fourth-quarter earnings, just below market estimates. EPS of 65 cents was reported versus 59 cents a year before and estimates of 66 cents. Sun Life Financial also reported better-than-expected quarterly earnings, helped by strong performance in the US and Asia. Telus managed to meet estimates but struggled to maintain growth in its wireless segment. The most heavily traded shares by volume were Bombardier, Aurora, and Nemaska Lithium.

5 from 5i

Here are five reads we found interesting last week:

-Investing lessons from horse racing

-Behavioral bias, cause for negative skews?

-Where do hedge funds stand now?

-What Jack Bogle wanted us to think

-Geography changes your definition of “Moderately risky” 

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