The TSX Composite index was down 1.6% in the month of August 2023, but up 7.4% for the past year; in between it bounced around from a  low of 18206.28 on October 12, 2022, through 5 modest runs up and down to close at 20292.62. Both the S&P 500 Index and the Nasdaq Index significantly outperformed  both the DJ  Industrials Index and the TSX over the past year. Neither the FED nor the BOC adjusted their base rate in August., both having raised in July. Inflation however rose in July in both the US (3.2%) and Canada (3.3%) on an annual basis. Canada's economy unexpectedly contracted in the second quarter at an annualized rate of 0.2% and growth was most likely flat in July. In contrast, the US economy grew at an annualized rate of 2.2% (lower than expected) in the 2^nd quarter. In Canada, consumption expenditures seemed to be slowing, and unemployment is ticking up. The Chinese economy seems to be in some trouble and the Ukrainian conflict muddles along. With this background the following table presents the top and bottom performers in August.

Altus Group Limited (AIF)

The number one performer in August was Altus Group (AIF) whose stock was up 18.19% and 2.68% for the past year. During the year, it had a high of 60.60 on February 20, 2023 and a low of 40.44 on May 8, 2023. Results for the quarter ended June 30,2023 were much improved over the first quarter : profit was $11.9 million compared to a loss in the first quarter, and pretty much in line with the comparable quarter in 2022 with revenues of $205.2 million. This was announced on August 10^th and appears to have been the proximate cause of the rise in the stock price.

AIF is a leading independent provider of real estate consulting services, real estate software applications and data solutions. With operations in four key geographies (Canada, the U.S., the UK and Asia Pacific), its products and services are used by banks, pension funds, insurance companies, accounting firms, real estate-oriented organizations, industrial companies and investors to evaluate real property assets.

Revenue growth continues to be driven by strong Recurring Revenue performance, which is where the Company’s go-to-market efforts and investments are focused. Management noted: “ The steady execution of our strategy, alongside the improvement in our Analytics New Bookings, reinforce our outlook for the year to deliver sustained top and bottom supported by steady new customer additions”.

Chartwell Retirement Residences Units (CSH.UN)

The second best performer in August was Chartwell Retirement Residences (CSH.UN) whose stock was up 14.5%, up 21.6% YTD, although down 3.3% over the past  year. The stock opened one year ago on a high from which it fell jaggedly to a near term low of $8.28 on April 3,2023 from which it has risen to its present close.

CSH.UN is an open-ended real estate trust governed by the laws of the Province of Ontario. It indirectly owns and operates a portfolio of 192 seniors housing residences across the continuum of care, all of which are in Canada.

On March 31, 2022, CSH.UN entered into definitive agreements to substantially exit its Long Term Care Operations in Ontario, which is expected to produce some $269.2 million on closing in October 2023. It contributed $4.8 million net income in the 2^nd quarter 2023

Results for the 2^nd quarter of 2023 from continuing operations showed total revenue of $180.8 million (Resident $161.7 million) up 2.8% over the prior comparable period; net loss of $12.3 million compared to a loss of $3.4 million in the prior period; the negative change in fair value of financial instruments accounts for most of this difference. Funds from continuing operations (FFO) amounted to $25.9 million  ($0.11 per share), up 0.7% over the prior year period. Same property occupancy was 80.4% in July and is expected to climb to 81.7% in September. Management expects to see continued occupancy growth in 2023 and beyond, supported by accelerating demographic growth, shortages of long term care beds and fewer senior housing construction.

Primo Water Corporation (PRMW)

The third best performer for August was Palm Water (PRMW) whose stock was up 10.92% and 22.13% over the past year. During the last year, the high was 22.01 in mid February 2023 and the low was 16.58 in late June rising to the close.

PRMW is a leading direct provider of bottled water to consumers and water filtration services in North America and Europe, having withdrawn from Russia in the 2^nd quarter of 2022

Results for the second quarter of 2023, posted August 10^th, were strong giving a good lift to the stock price: Revenues at $593.3 million were up 3.5% over the prior comparable period ; net income was $21.3 million ($0.13 per share) compared to a loss of $22.5 million. An impairment charge of $29.1 million coupled with an unrealized loss on foreign exchange in the prior period offset by an unrealized gain in the current period account mainly for the result. Adjusted EBITDA at $216.5 million was up 10.5% and PRMW had $86 million cash on hand and unused credit of $86.8 million. Management is projecting high single digit organic revenue growth over the long term.

BRP Inc. (DOO)

The worst performer in August was BRP Inc  (DOO) whose  stock was down 14.82%, although up 14.2% over the past year. The stock hit a high at the end of July and has fallen since.

DOO is a global leader in the design, manufacturing and marketing of powersports vehicles. It has leading market positions in the snowmobile, personal watercraft (PWC), all-terrain vehicle (ATV), side-by-side vehicle (SSV), boat market, and the on-road threewheeled vehicle segment.

It is hard to reconcile the stock price movement with the results announced on September 7^th. Revenues for the quarter ended July 31^st, 2023 were up 14% over the prior year comparable period  to $2.8 billion; net income up 43% to $339 million ($4.26 eps diluted); normalized EBITDA up 13%  to $474 million. Management expects to deliver record year in fiscal 2024 with revenue growth of 7-10% and normalized eps in range of $12.35 to $12.85. There may be some concern that macro factors may impact discretionary spending on its products in the future.

Leon’s Furniture Limited (LNF)

The second worst performer in August was Leon’s Furniture (LNF) whose stock was down 14.45% for the month, but up 12.24%  over the past year. LNF is the largest network of home furniture, appliances, electronics, and mattress stores in Canada. It was the best performer in April 2023.

Results for the quarter ended June 30, 2023 , announced on August 11^th, appear to have been the proximate cause of this decline: Revenues at $593.8 million were down 8.2%; operating profit at $41.5 million  was off 39.3%; net income at $27.4 million ($0.40 per share) was off 45.3% compared to the comparable prior year period. This result was attributed largely to the macro environment continuing to pressure consumer household spending. Management noted, however,  that the market is showing resilience and a more constructive demand picture has emerged during the final weeks of Q2 that has continued into early Q3, giving the Company a more positive outlook for the second half of 2023.

Magellan Aerospace Corporation (MAL)

The third worst performer in the month was Magellan Aerospace (MAL) whose stock was down 10.43% in August, and off 1.58% over the  past year. It peaked at $10 per share in late December 2022 when it was the 3^rd best performer, sinking to a low of $6.94 in mid April 2023, rising through July and falling in August.

On May 30, 2023, Mal announced the signing of a contract extension with Boeing providing for the continued manufacture of large and complex nacelle exhaust systems for the Boeing 767 program.

MAL is a diversified supplier of components to the aerospace industry. It designs, engineers and manufactures aeroengine and aerostructure components for aerospace markets, including advanced products for defence and space markets, and complementary specialty products. In  the second quarter of 2023, 43% of business was in Canada; 27.7% in USA; 29.3% in Europe.

Results announced on August 8^th   for the 3 month period ended June 30, 2023, were not well received: Revenues at $220 million were up 14% over the comparable prior year period, (led by strong results in the USA) administrative and other expenses were up 53% , and net income at $2 million was up significantly. On a sequential basis, however, revenues were down slightly and net income was about half the net for the first quarter. Foreign exchange is a significant  factor and was a positive influence in the recent quarter. Cash on hand was reduced to  $1.8 million due to large negative change in non cash working capital, offset by an increase of $11.4 million in bank indebtedness. On June 14^th, MAL extended its credit facility to June 30, 2025 comprised  of  $75 million fixed and $75 million uncommitted accordian provision. $14.3 million was drawn at quarter ending on this facility.

Record breaking commercial aircraft orders were announced at the Paris Air show in late June and ongoing tensions in Ukraine and Asia- Pacific suggest demand for military aircraft will continue. Both these trends bode well for MAL.

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Disclosure: The analyst(s) responsible for this report do not have a financial or other interest in the securities mentioned.