Payfare makes new partnerships in Q3 but stock lags slightly

Payfare (PAY) has been active in Q3 expanding it's usability by using customer apps.It made 3 partnerships that potentially will increase it's active user count and hence revenues.Principally it made a deal to allow instant access to Doordash delivery drivers plus a 2% cashback on every gas purchase.It made a deal to allow international money transfers from Payfare.And it made it clearer that there would be no monthly fees nor minimum account balance  required.

Q3 Highlights

Active user count increased by 37% over Q2 2021 which also had a healthy increase.This resulted in Q3 revenues of $12.7 million for a 286% increase over Q3 2020 and a 46% increase over Q2 2021.This produced a $606,000 gross profit and allowed PAY to completely pay off it's loan facility.In addition, Payfare made a partnership with a company called Plaid that allowed it to interconnect with any app.Although this blog feels that the gain in active user account of 37% was quite favorable it needs another 25% gain in active user account in the next quarter.Some revenue increase will be made by a gain the velocity of present users.But this blog feels that Payfare must expand it's customer base beyond the GIG  economy.

                                                            Forecast for Q4 

   Payfare had an increase in revenues from Q2 to Q3 of about 46%.This brought revenues to $12.7 million. And if Payfare is able to expand it's active user account by perhaps 25% and increase it's usage velocity this blog feels that revenues may hit $15.5-$16 million in Q4.But this will likely require Payfare to make one or two new partnerships.And this will bring annual revenues to about $50 million plus net income will then approach being positive.This will probably send the PAY  share price to $10.But if the active user account only shows a small percentage increase and there is a small increase in velocity this blog feels that Payfare will stay in a range between it's present level and $9 a share. 

                           

 Dale Mcintyre M.S.Sc.(Econ) is a freelance writer associated with Zacks Research and the Woodbridge Group.

Zacks Investment Research: Stock Research, Analysis, MarketBeat: Stock Market News and Research Tools

 
 

Labrador Iron Ore (LIF) still a steal at Q4 prices

   Labrador Iron Ore (LIF) has a substantial position in Iron Ore Company of Canada (IOC) which produces iron and iron is the principal element in making steel and steel pipes like the one shown above.And yes it is a steal at these prices.My blog on Wordpress (Blogdaleup dated June 2,2021) stated that the stock price movement in LIF has been chiefly caused by the doubling of iron ore prices since Q2 2020.And the World Steel Association is calling for a 6% increase in steel production in 2021.It is true that LIF is a unique stock because it controls no production decisions as it is a royalty company.This has brought it's P/E ratio down to 6.2 times earnings.On the other hand, LIF has almost no operating expenses,no debt and is flush with cash.It certainly would be a good time for LIF to start diversification.

       Iron Ore Company

      All of LIF's revenue and earnings come from Iron Ore Company of Canada (IOC).So LIF gets production royalties of 7% and 10 cents a tonne and because it owns 15% of IOC it gets a sizeable dividend from IOC.Production has only increased slightly from Q2 2020 but iron ore prices have doubled as have royalties.However the iron ore price has come down from Q2 2021 when it hit a high of $219/tonne.The price quickly fell to $90/tonne but has recovered now to $115/tonne.Analysts expect the price to move up to $150/tonne until the second half of 2022.Equity earnings from IOC were $60 million compared to $35 million in Q3 2020.

    Q3 Highlights

      Aided by Q3 prices royalty revenues were $74 million compared to $52 million in Q3 2020.And as already mentionned equity earnings from IOC were $60 million. Consequently net income (including the IOC dividend) was $1.64 per share an 82% increase over Q3 2020. And despite a longer than expected maintenance shutdown LIF produced 12.3 million tonnes of iron ore in the first 9 months or about 4 million tonnes per quarter.LIF expects to produce 4-5 million tonnes in Q4. 

 No  Debt and a Good Steel Market 

       The iron ore price is largely determined by exports to the Chinese market.And this market is expected to be stable unitl the seconf half of 2022.And in fact analysts expect the price of iron ore to greadually move up to $150/tonne.And LIF management expects that "IOC will pay a sizeable dividend but not as great as that in Q3".So it is likely that e.p.s. could be in a range of $1.50- $1.75 in Q4 and the Q4 dividend is expected to be $2.10 per share.This could send the share price back to the $45 price level if IOC sends a reasonable dividend.

       This blog feels that the LIF share price is too volatile because of the fluctuating iron ore price and it's lack of control over production at IOC.Furthermore it has no debt and even has some cash on hand. My last blog on LIF  suggested that it buy the 7% not needed for control of IOC from Rio Tinto.But failing that it could buy a chunk of of a steel maker that is starting to rebuild.Yes a 15% stake in Stelco would help to stabilize both company's earnings.         Zacks Investment Research: Stock Research, Analysis, & Recommendations

                             

 

 

  Dale McIntyre M.S.Sc.(Econ) is a freelance writer that writes blogs for several brokers. 

Western Forest awaits Q3 Results

Western Forest Products (WEF) has had a rough time for the last 2 to 3 years.In March of 2020 it hit a low of $.61 and even in August of 2020 it traded only at $1.20.Lumber prices had been trading around $250-$500 per 1000 boardfeet. But in the summer of 2020 the lumber cycle reversed and prices climbed to a high of $1500 per Mbdft.The revenues for Q1 and Q2 of 2021 were at record highs.With the wait in delivery times and bills being paid a considerable amount of June Q2's high prices will be reflected in Q3 not Q2.But then the price dropped to the $500 per Mbdft. area and only now is recovering to the $750 area.

  Recap of Q2 Highlights

 Q1 revenues and earnings were well above the rate seen in Q1 2020.A traditional level of earnings would have been $.03-$.05 in the 2018-2020 period.But in Q1 2021 WEF produced $.14 per share.This helped to move the almost stagnant stock price.And WEF reported e.p.s. of $.21 in Q2.So in Q2 the stock price moved up to the $2.00 level after reporting e.p.s. of $.09 per share in Q4 2020 and $.14 in Q1 2021.And in Q2 WEF started to divest all it's non-core assets like partnerships with indigenous people and a stone quarry.This money came to about $45 million and Western used it to pay off debt.Now it's debt/equity ratio is a reasonable 12%.However as the lumber price came down in Q3 WEF retreated to it's former level around $2.00.Now it awaits Q3 results but investors have bid the stock price up to the $2.35 level.This blog believes that investors will be rewarded as e.p.s. should be in a range from $.11-$.15 per share.Scotiabank foreacsts annual e.p.s. of $.47 for WEF in 2021.This blog expects $.51-$.55 per share .Because of the cyclical nature of lumber stocks their P/E/ ratio tends to be lower than the TSX average.But with a P/E ratio of 6 times investors should expect the stock price to move towards $3.00-$3.25 by December.Now WEF shareholders only have to wait until November3 to see Q3 results.     

  Dale Mcintyre  M.SC is a freelance writer working with Zacks Research.

Keeping up with Interfor and Canfor

         Western Forest has made a lot of improvements in the last 18 months.Mostly to clean up it's B.C. coastal operations.Now it's debt has been reduced and it's liquidity is solid.But it has not made acquisitions to bolster it's diversity against another shock from the lumber price cycle. WEF needs to solidify it's supply chain  by 2022. Zacks Investment Research: Stock Research, Analysis, & Recommendations              MoneySense

Acuity Ads is getting ready for Ad Automation Technology

  Acuity  Ads is a company that has been covered by this blog two times on two separate websites ( in Blogdaleup (wordpress) on October30,2019 and in Workathon (google blogger) on December15,2020).Acuity Ads has come a long way since October30,2019.Back then it's headquarters was in Halifax and thev stock traded at $1.50-$2.00 per share.It's market cap was about $75 million while now it is trading around$9.50 a share with a market cap of $375 million.In 2021 it has traded as high as $26 per share before falling to it's present price.So it has had a market cap in February of $1.5 billion.Now the market cap is about $.5 billion.Many investors had great expectations for Acuity Ads at the start of 2021.

    A good part of the reason for this change was explained in the blog dated December15,2020 in Workathon.It suggested that Acuity Ads acquire 3 "content" and advertising small caps.And it appears that they did soAn earlier blog on Wordpress (Blogdaleup dated Oct.30,2019 suggested that AT could benefit from hiring a few new recent graduates with some online experience to work with these 3 new companies.The last blog on Workathon suggested further, that after consolidating operations with the new "content" companies that AT could move to the $13-$15 price range.And this,in fact, occurred.In fact, the stock price moved to as high as $26.Furthermore Acuity made a successful equity offering on the Nasdaq index accompanied by a listing on Nasdaq.       

 

      However the future looks like AT will generate more revenues from Ad Automation Technology which uses an AI platform.In fact, in the last quarter Acuity generated almost 20% of revenues from Ad Automation.This has acted to increase margins and lead to a 15p4% increase in adjusted EBITDA over 2020.A previous blog of mine suggested that AT would be wise to acquire an AI technology company like Nex J Systems (market cap of $15 million).As AT only has 60 million shares outstanding.A new equity issue could bring in sufficient capital to purchase a small cap like NexJ.But more equity could dilute earnings.So this blog suggests because AI is such a new field that it engage a few headhunters (likeRobert Half) and hire 10 to 25 new staff including recent graduates and this will cost less and not dilute earnings.

   Price Behaviour  

      For quite a few years Acuity Ads traded around $2 a share.But about a year ago it moved up to a high of $26 in February and then drifted down gradually to it's present $9 level.Earnings have not matched the price behaviour. Scotiaitrade shows their present earnings at $.18 per share.But AT believes that Ad Automation will increase revenues and margins.Perhaps so but only slightly in 2021 without new customers.This stock is expected to stay in a range between $8-$10 a share until  yearend without news of an interesting acquisition or a major new customer.The goal of Acuity Ads management is to convince investors that the prospects seen in January and February will be regained in 2022.  

              https://www.fool.com/ https://www.zacks.com/

Dale Mcintyre is a freelance writer that works with Motley Fool and Zacks Investment Research.

Topicus Software is Constellation Software's 20 year old European Baby

 Topicus was started in 2001 and it was a Dutch company  focused on the pan- European market since day1. It was acquired by Constellation Software on January,2021.It is headquartered in the Netherlands and has offices in about 10 other European companies.It has a market cap of $4.7 billion compared to about$47 billion for Constellation Software. On a fully diluted basis there are 129 million shares.39.4 million of those outstanding shares trade on the public market.About 39 million remain with the original Dutch shareholders. .There were 39.4 million preferred shares owned by Constellation that were converted to subordinate voting shares in February,2021.                                                                          Topicus is in the business of vertical market software which models a business's operation from the start to the delivery to the customer.This allows the Topiucus customer to improve his operation for every stage and the overall turnaround time.This then speeds up processing time and reduce individual operation cost and overall cost.

    Second Quarter Highlights

   This blog and many other analysts are betting on Topicus (TOI) following in  the footsteps of it's highly successful parent Constellation Software.To this end TOI had a 54% increase in revenue to EUR178 million in Q2 compared to EUR 116million in Q2 2020.While net income increased to EUR169million compared to EUR 14 million in Q2 2020.This translates into $.12 per share.A number of acquisitions were completed for cash considerations of EUR 5.2 million during the first half.And subsequent to Q2, TOI completed a number of acquisitions for cash considerations of EUR 50 million. Consequently TOI still has a negative free cash flow.               

 

     The Constellation Software model 

 The voting structure for TOI is complex but Constelleation Software (CSI) owns subordinate and super voting shares.Consequently CSI controls 50.1% of TOI voting shares.And as a result Topicus has been active on the acquisition trail.In Q2 it bought a number of acquisitions for cash consideration of EUR 5.2 million.And subsequent to Q2 it completed the acquisition of a number of businesses for EUR50 million.So it is following in the footsteps of it's parent CSI.

    But Topicus is different than almost all other Constellation purchases.Traditionally CSI will include the acquired property under the Constellation Software umbrella.But Topicus was given more independence and handled as a spin-off.And it too is acquiring small businesses and making them part of the Topicus operation.All of their acquired properties to date have been in Europe.And Constellation is keeping a close eye on the new operation.

    This blog has no forecast on the expected price by yearend.But it notes that the price has already come up from $57 to $128 in 2021.Investors should be cautious here until Q3 results come out especially when TOI is showing negative free cash flow (because of the expenditures on acquisitions).        https://www.woodbridgegroup.com/ 
 

Oceanagold gets Didipio mine back

    Oceanagold,in a press release,on July 16 announced that the Phillipine government which had closed the Didipio mine to study the effect on the local environment had now  given a new 25 year arrangement (FTAA) to continue operating the gold and copper mine.No date was given on the new startup date nor when normal operations would resume.However OGC said ,in it's press release,that milling would begin "as soon as possible".The staged restart will begin over the next several weeks.And in full operations it will produce 10,000 ounces of gold and 1000 tonnes of copper in a month.This will have an immediate impact on OGC earnings and stockprice as the Didipio mine contains a stockpile of 19 million tonnes of ore.The total value of the stockpile of copper and gold is estimated by this blog at $17 million or $.025 per share.

       Past Blogs

    This event has been covered by several other of my blogs including Workathon dated May2 and January 25,2021.There was some speculation that the Phillipine government might be asserting  that it intended to take an ownership position in the Didipio mine.This blog suggested that OGC might ask the Australian government to intervene on it's behalf to sign a new FTAA agreement.But none of that took place and OGC has remedied the problem by returning 1 - 1.5% of it's gross revenue to the Phillipine government in order to assuage the environment problems that might occur from the mine.And according to the OGC managerment Didipio will be sarting up again in several weeks.Furthermore Oceanagold management has increased it's production guidance by about 20,000 ounces for 2021 because of the startup.

   Q2 Highlights 

 Oceanagold had a good second quarter aside fron signing a new FTAA agreement. Revenues were $183 million versus $149 million in Q2 2020 while adjusted EBITDA was $95 million and e.p.s. was $.05 per share compared to $.02 in Q2 2020.First half production was at $177,000 ounces and as a result management revised annual guidance to 350,000-370,000 ounces excluding production from Didipio.While Didipio is expected to produce 18,500 ounces of gold and 3500 tonnes of copper in the fourth quarter.

     Back to Work 

    Oceanagold had a setback when the Phillipine government shut down the mine almost 2 years ago.But it was not dormant during this period as it developped the Martha Underground Project and the Waihi mine.Also it bought a lot of property surrounding the Waihi mine.So production has not fallen during this period;it has actually increased.And, in addition,it has a stockpile of gold and copper ore on the Didipio mine worth about $17 million.It has been suggested that OGC pay 1-1.5% to the provincial government but this may only last for 1-2 years.But the new production is expected will add up to 18,500 ounces and 3500 tonnes of copper in the last quarter.As a consequence this blog sees that e.p.s. may hit $.16 -$.20 per share in 2021.This should be enough to gradually push Oceanagold shares back to 2019 levels when it was trading around $3.50.Right now the price of gold has fallen but should not stay down with all the government liquidity still pouring in to the economy.

https://www.woodbridgegroup.com/
 

Crescent Point (CPG) buys Duvernay assets and sells Saskatcewan non-core assets

   Crescent Point Energy is another property not previously covered by any of my websites.It is also a stock that has traded as high as $11 in 2018.Crescent Point has been a casualty of the fallen price of oil.Yet as the oil price has regained most of it's lost ground crescent Point (CPG) has not recaptured it's old price.But most analysts agree that it will gradually move closer to it's old price level as prices and earnings and cash flow start to rebound.

  Crescent Point sold it's remaining non-core assets in southeast Saskatchewan for $93 million.And it used it ,with other funds, to reduce debt by $220 million.As the oil price rebounded this property was becoming more profitable.But CPG preferred to acquire the largely unexplored Kaybob Duvernay asset which CPG says is immediately accretive to earnings.

                      First Quarter Highlights

  Production for Q1 was 119,380 boe/day which was made up of mostly oil and natural gas liquids.Guidance for 2021 was given as between 132,000-136,000 boe/dayThis is largely because CPG is enhancing with water injection may of it's formerly inactive wells.This increase in production will flow through to earnings,especially with the increased oil price.Adjusted funds flow of $263 million translates to $.49 per share.And Cresent Point management expects to generate 2021 cash flow of $525-$650 million at a price of $55-$65 a barrel for 2021.                         

 

                           The Price of Oil                                                                                                                 Crescent Point management has been quite conservative in their price of oil and forecast of excess cash flow. This blog expects the price of oil to be $70-$75 a barrel for 2021.This would mean excess cash flow will likely be $600-$725 million for 2021.This is significant because CPG reduced debt by $135 million from excess cash flow in Q1.And has reduced $750 million of debt from it's total $2 billion debt since 2020.It is entirely possible that Crescent Point could reduce another $400-$500 million in 2021.Then it's debt/adjusted cash flow would be around 1 for the first time in several years.

                        Stock Price for 2021  

    CPG earned $.49 of adjusted cash flow per share in Q1.But production is expected to rise with it's new wells drilled and new wells to be drilled. in Q2,Q3 and Q4.Also production from it's Duvernay assets will be coming onstream soon.Crescent Point predicted $525-$650 million of excess cash flow with the oil price at $55-$65 a barrel.But this blog sees $70-$75 a barrel as more likely.There is also an outside chance that oil hits $80 a barrel in the hot summer.Therefore a forecast of $1.12-$1.20 of excess cash flow per share is a fairly conservative prediction.And this excess cash flow could even further reduce debt.In addition, with a P/E ratio of 6 to 8 times earnings this means that the price should be in a range of $6.75 -$9.00 with a median price forecast of $8.00.   https://www.zacks.com/,Home - Ontario Teachers' Pension Plan (otpp.com)

    

Enerplus increases N. Dakota acreage by 4 times and increases Dividend

  This was the first time that Workathon has covered the Enerplus story.And this coverage  was partly because Enerplus had a very active year in 2020.Enerplus is a rare entity as it gets a substantial amount of it's oil and gas production from American properties.Enerplus acquired two sizeable pieces of acreage in the Williston Basin in North Dakota.In fact, their acreage in North Dakota which is a core asset, is now 4 times bigger than in 2020.And the oil produced in the Bakken area in North Dakota earns W.T.I. prices not Western Canadian Select prices.Their timing appears to be excellent as oil prices have increased by almost 60% since the summer of 2020.Enerplus management has seen their stock price move from $2.50 a share in the summer of 2020 to $8.50 in 2021.  

First Quarter Highlights

 Production  showed a slight drop in output from Q1 2020. While funds from operations (FFO) increased from $1.51 in Q1 2020 to $2.08 in 2021.Most importantly e.p.s. went from $.01 to $.06 in Q1 2021 while adjusted net income went from $.09 to $.023 per share.And cash flow was robust enough to increase their dividend by 10% to $.033 per share which is considered a quite substantial dividend hike. 

 Williston Basin Properties

Enerplus produced only 6300 barrels from their first acquisition called the Bruin property in Q1 .It should probably get 35,000-40,000 barrels of production for the rest of the year.It also got 204 MMcf of natural gas from their Marcellus property.Since the acquisition, ERF has drilled 3 new producing wells in the Williston Basin.And Enerplus tells shareholders that it intends to spend 80% of their capital budget in the Williston Basin drilling 42 new well during 2021.

Annual Guidance

It is hard for ERF to accurately estimate what their production of oil,gas and liquids will be for the rest of the year.They offer an estimate of 111,000-115,000 of Barrels of Oil Equivalent (BOE) for total production in 2021.If true this would indicate a 20-30% increase.But this likely includes very little production from their new producing wells plus their wells just being drilled.And likely their revenues and earnings forecasted will be low as this blog sees further increases both in the price of oil and natural gas in 2021.The price of natural gas has doubled since the summer of 2020 as it moves with the price of crude oil.This blog sees that the adjusted net income reported for Q1 ($.23 per share) should be increasing every quarter of 2021.Consequently adjusted net income should be in a range of $1.10-$1.25 for 2021.And the P/E ratio could be as high as 8 to 10 times so this could put the price by yearend at $10-$12 per share.Investors need to watch the production and net income results in Q2 to see if this forecast will be accurate.

Zacks Investment Research: Stock Research, Analysis, & Recommendations

Oceanagold increases reserves in U.S.A (Martha Underground) and New Zealand (Golden Point) will meet Annual Guidance

First Quarter Highlights

On May11, Oceanagold (OGC) reported it's first quarter results and they were better than expected.By now all OGC shareholders know that their Didipio mine in the Phillipines was closed by the Phillipine government in late 2019.See the blog on April8,2020 in my Wordpress EconothonII website.And now it is being studied for environmental damage by the Phillipines Ministry of Environment.Didipio contained 1.3 million ounces of proven reserves.But shareholders are starting to learn that OGC has replaced their lost reserves with previously undiscovered reserves in their U.S.A mine (Martha Underground Project)and their New Zealand mine( Golden Point in the Macraes discovery).But even less shareholders realize that production in 2021 is up from 2019.

Quarterly Highlights

Total production of gold by Oceanagold  in Q1was 83,000 ounces and this is up from 80,000 ounces in Q1 2019.And adjusted EBITDA is also slightly ahead of the 2019 value.While earnings per share has recovered from a ($.04) loss in 2020 to a $.02 profit in 2021. Q1Yet the share price remains about half of the price before the Didipio mine closing.                

Meeting their Guidance

Oceanagold has  replaced both the lost reserves and production from it's Didipio mine in the Phillipines.And this blog believes possibly that the ore body at the Macraes mine is still underestimated.That aside,production at this point is sufficient to meet annual guidance given at the first of 2021.In addition,the price of gold is moving up again slowly partly dependent on the huge American deficit.Many analysts,including this blog, see the price of gold breaking old price records.So OGC should be back at $4.50 where it was in 2019.And earnings per share is on track to hit 2019 levels.

The only drawback facing Oceanagold now is the slow decision by the Phillipines to return the Didipio mine to production.Oceanagold trades on the Canadian TSX exchange.But it is listed in Australia also.This blog feels that asking the Australian government to negotiate with it's smaller neighbour,the Phillipines, might speed up the return to production.And any news here will send OGC back to it's 2019 levels or maybe even $5.00.

 https://www.moneysense.ca/

Northland Power beefs up the Balance Sheet by buying Poland's Baltic Power

Northland Power (NPI) is an utility covered many times in both my Workathon and Blogdaleupsome websites.It has gone from a regional energy provider to a global energy source.One major step was the construction and financing of three world class wind farms in the North Sea.Since 2017 NPI built Gemini (369MW) off of the Dutch coast and Nordsee One (285 MW) plus Deutsche Bucht (250MW) off of the German coast.However the North Sea is a volatile environment with the strongest winds in the world.And so the second step was acquiring solar powered operations in Mexico and Columbia .And in addition, building 3 more wind farms offshore Taiwan of which they owned 60% of 1044 MW.It is true that the second step has not been totally completed.This blog considers their investment in Poland  with Baltic Power to be a major third step.

Baltic Power

Northland Power has acquired a 49% interest in Baltic Power from PKN Orlen of Poland.Poland offers the largest market in central Europe and PKN Orlen is the largest utility in central Europe.Poland is considered to be a substantial market for power in Europe. Baltic Power is considered to be in mid-development stage.Yet it has the potential of generating 1200 MW of power; the same power generation as the 3 wind farms offshore of the German-Dutch coast.Before this plant is completed NPI must invest another $110 million CAD.When it is completed Northland expects a 25 year power purchase agreement.

Fourth Quarter Highlights

On February 22 (after the Baltic Power agreement) Northland reported it's fourth quarter results.It is not clear whether Q4 results included results from their new New York winds project.However annual revenues and earnings showed good improvement over 2019.Annual e.p.s. were solid  and on track to hit $1.75-$1.85 per share for 2020.But this blog believes that e.p.s.will show only a slight increase over 2019.

2020 Forecast

The annual report showed that e.p.s. for 2019 was $1.75 per share.Guidance states that annual e.p.s. for 2020 will be in a range from$1.60-$1.70.This blog agrees with this assessment.The New York winds project will contribute to 2020 earnings.But Baltic Power will not be able to generate earnings likely until 2022.However there is capacity for a total of 4-5 GW of power for the entire Polish  project.While Hai Long 2 and 3(offshore Taiwan) will not contribute until 2025.In summary, 2021 may be an average year for Northland but investors who can wait for Q4 of 2021 or Q1 of 2022 will be amply rewarded.  https://www.fool.ca/

 

Past Workathon Blog Predictions on Go Easy Financial

 In the past, my blogs have been based on the change shown in the present quarter made in the subject company from the last quarter and the past year.This blog will look at predictions made in Workathon and Blogdaleupsome blogs which are both a part of Google Blogger.There will be less emphasis on comparing the data from one quarter and one year to the present quarter.Instead more emphasis will be put on the change in direction from the past quarter and past year. As well as the direction predicted in past Workathon blogs.                               The two blogs that I will rely on for these predictions are- February25,2020 and October4,2020 on my Blogdaleupsome website.And the direction predicted ,in general, was that the growth in revenues must get back to the levels seen in 2017,2018 and 2019.In addition, they must keep up their work on controlling the delinquency rate on loans.Lastly they should increase their stake in the small online payments company called Paybright.

       Predictions

   So the first blog was done on February25,2020 and it stressed the importance of increasing it's non-prime lending and leasing  to include loans for customers to pay off bills and debts.This has been done and loan originations have risen in response.The February blog also recommended tightening up it's loan process so as to reduce it's delinquency rate and this has been a big success in GSY increasing it's margin.And it has now had continuing record high adjusted EBITDA.This blog also recommended buying a small furniture company like GBT in Quebec in an attempt to increase revenues on it's consumer goods side.This did not happen yet.

    The second blog was posted on October4,2020.First it predicted that the annual earnings for 2020 would be between $6.50-$7.00 per share.These figures underestimated Go Easy as GSY reported annual earnings of $7.57.Once again showing an increase in the margin while revenues were close to the estimate.Secondly this blog approved the minority interest taken in a small online payment company called PayBright.In fact,this blog recommended increasing their stake here.As it would further modernize Go Easy and could increase their P/E  multiple.However instead GSY sold it's stake in Pay Bright to a company called Affirm.Although it made a handsome profit this could restrict future growth in the growing online area.                                           

 

      Future Predictions

  Now Go Easy has a market capitalization of about $2 billion.If it is going to get to $4 billion then some of the changes already made must continue and some new ones implemented.The improvements on the delinquency rate should continue.But the growth in revenue is waining.Go Easy must make a few acquisitions on the consumer goods side such as a small furniture maker or  a small appliance maker to bolster consumer goods sales.But the biggest change recommended is to continue it's relationship with PayBright and to find another online payment company to include under the Go Easy umbrella.In order to increase it's growth in revenue GSY must have a greater online presence and the profits made from PayBright  should make it easy to do.As said in the earlier blogs this will increase it's P/E ratio and send the price towards $135 per share.     

     https://www.woodbridgegroup.com/ 
 

Aimia is almost over Aeroplan ;Moves on to new Investments

 

 Aimia is a Canadian company with loyalty solutions;it is not tremenduously popular and has a market cap of only $425 million.But Workathon has been interested in it for some time when it suffered embarrassment after it sold it's chief asset,the very popular Aeroplan loyalty program, for little proceeds.This was an embarrassment but now Aimia is almost over this fiasco and is starting to move on.Consequently in the last quarter it collected $66 million from one account and $3.5 million for another.And Aimia is using the proceeds to invest in new companies that are providing it with income.

      Third Quarter Highlights 

   Aimia made several new initiatives in Q3.It had already acquired Mittleman Investment Management in Q2 with assets under management (AUM) of $201 million.And in Q3 it invested $9.2 million in an Australian entertainment company called Village Roadshow.And it also invested $10.5 million in a leader in outdoor advertising called J.C.Decaux.But,of course, the big item will be the receipt of about $70 million from their Aeroplan program.Aimia also tells shareholders that it's 49% owned loyalty program called Kognitiv will have a positive adjusted EBITDA and cashflow in 2021.However Q3 will show a net loss of $.15 per share in comparison to $.11 per share income in 2020. 

    Aimia needs more Loyalty

    This is a bit of a pun because Aimia needs more loyalty from it's shareholders which will then bid the share price up.But taken in another sense this blog believes that Aimia should stick to it's core business of loyalty programs like PLM.There is almost $70 million coming in as retribution for Aeroplan in this quarter but is this enough?Aeroplan is still the biggest loyalty program in Canada by far.And it took 17 years for Aimia to build Aeroplan to it's present successful state.Basically Aimia got $450 million plus all liabilities covered with a few sweeteners for a $2.5 billion loyalty program.And that is why the old board members are no longer with Aimia.          

     Right now this blog feels that the new board lacks focus in it's new investments.Although Kognitiv shows promise this blog thinks that almost all of the $70 million coming should be spent on loyalty programs.For example,why not buy Avion or a good chunk of it from Royal Bank.If Aimia is still short of a majority position surely Air Canada (the new Aeroplan owner) will throw in another sweetener to a very sour deal.

                          https://www.aimia.com/

Blackline Safety Posts Record Year

     Blackline Safety (BLN) had a record year in 2020 - a year not great for business because of the pandemic.But annual revenue,at $38 million, was 15% better than 2019 and Q4 revenues were up 31% to $7 million.But BLN was more proud of it's recurring revenues which at $25 million were ahead 42% from 2019.BLN was proud because they recorded these gains in the year of the pandemic.And there were fewer products shipped because of the pandemic.Fourth quarter revenues were especially strong with a 31% increase to $12 million.

     Annual Highlights  

    BLN had a moderate growth year in 2020 with revenues increasing by 15%.And their gross margin showed some improvement because of BLN's better market share.As a result BLN showed significant improvement in adjusted EBITDA from $.5 million in 2019 to $5.5 million in 2020.But still does not record any net income as they showed a small net loss in 2020.BLN expects revenues to grow only to $35-40 million in 2021.But using the fourth quarter as a benchmark this blog thinks that annual revenues should be $45-$50 million.And this increase might improve their margin by another 1%.Blackline must increase adjusted EBITDA and show a small net income in 2021.         

 

     If Blackline cannot improve it's overall market share then it must make one or two small tuck-in acquisitions.Revenues must be increased to cover overhead costs and earn a net income in 2021. It could be said that 2021 is close to or is a breakeven year.It is time to show earnings and e.p.s. for it's shareholders and new investors.

     It is true that BLN had a record year but it's guidance at $35-$40 million will not increase EBITDA and net income sufficiently.It is time to make some nimble moves to increase revenues.Guidance should be in the $45-$50 million area.And this will take at least one accretive acquisition.If this is done then it's shareholders can expect the share price to move gradually towards $9.50-$10.00.      https://www.zacks.com/   https://www.moneysense.ca/ 

 
 

Tucows reports 4th Quarter Results on February 9

     Yes the CEO,Elliott Noss, is working on the fourth quarter report in order to be ready for the February 9 publication.Both Tucows and it's CEO have been the subject of several blogs on Workathon,Blogdaleupsome on the Blogger website  and Econothon on the Wordpress website.The message has been to stop total reliance on registering and cataloguing internet domaine names for their earnings.And also to make more than one acquisition in a separate but closely related field.As Tucows has relatively few shares outstanding and little debt (recorded on it's balance sheet).Still this blog is aware that Noss has hired two top talented staff to work for it's subsidiary called Ting,a mobile internet service.So what can Elliott Noss tell shareholders in it's fourth quarter and 2020 annual report?

       Domaine Names

   Mr. Noss has not completely ignored the messages given on Workathon dated July1,2020 and Blogdaleupsome on November14,2020.The message is the same as the one given several times in 2019.Whether because of this advice or for other reasons Tucows started to sell off domaine names in Q2 of 2019.This bloated earnings and cash flow but reduced revenues.It also appears that some of their high salaried board members($500,000/yr.) have been dropped which, if true,has created significant savings.So revenues have been reduced but expenses have been pared down.Although e.p.s. has remained substantial their P/E ratio moved from 20 to 50.            

         But the Share Price is just Fine

    So e.p.s. remains substantial but the P/E ratio has increased.This is because the share price has fallen only slightly from it's high reached in 2019.Investors remain confident that Elliott Noss will produce new earnings.And,in fact, the share price has not suffered tremenduously.It has drooped, down to the $85 area, but then bounced back up in the $100 area where it now remains.This blog feels the secret is connected to the arrangement made for it's small mobile internet company called Ting in southern U.S.A. with the DISH network.It has even taken on new staff to manage Ting.Tucows has told shareholders that it has little equity left in Ting.But Noss has been silent on his position and the equity in the high-flying DISH stock.Although no new shares have been raised to buy DISH stock Tucows may have an option to buy at an earlier,cheaper share price.Right now many shareholders are hoping that is true but we should know more on February9.  www.woodbridge.com   ;www.canadianmoneysense.ca 
 

Interfor looks forward to Spring

 This man may not seem to have any connection to Interfor (IFP) but because of the pandemic he now works at home. And so he is able to spend more time fixing up his house and grounds.And it is apparent that the "repair and renovation" trade has improved sales of lumber and lumber products.This has helped IFP increase sales and earningsOnly slightly in Q2 but substantially in Q3.In fact,sales in Q3 2020 were 60% higher than in Q3 2019.

      A Modest second Quarter

   Interfor saw lumber prices and demand pick up slightly in the second quarter.But it was only able to earn $43 million of adjustable EBITDA and net earnings of $3 million or $.09 per share.This resulted in the share price dropping to $5 in April,2020.At the same time IFP was still  able to reduce it's debt to $239 million while having a capital expenditure of $120 million.This was necessary as Interfor produces 3 billion board feet of lumber every year.Over the last 3 years this was an average quarter but IFP was ready as the cycle turned up and prices increased in Q3.

     Q3 is Better

  Lumber prices remained buoyant in Q3 and sales were $645 million compared to $397 million in Q2.Adjusted EBITDA was $222 million while net earnings were$181 million or $1.81 per share.The price in April was $264 per million board feet and now was $910 per million board feet.This allowed IFP to reduce a significant amount of debt so that debt was now only 8% of  the capital structure.In addition, Interfor bought back 6 million shares or 10% of their float.This was pretty close to a clean balance sheet.      

    Lumber prices in Q4

 Lumber prices move in cycles and Interfor may have expected prices to drift downwards.But in fact lumber prices remained at $900 level in December and are expected to be there in January also.RBC Capital expects lumber prices to be above $800 for the first half of the rear.In fact,Interfor is expecting a good spring.Q4 results should be out in early February and this blog expects IFP to clear out any remaining debt and buy back more of it's shares.It will also modernize most of it's mills.On average analysts predict annual results of  $2.85 and reduce it's P/E ratio to less than 8.However most investors are aware of the wild swings in net earnings and e.p.s. so risk adjusted P/E might be 11-12.This should still enable IFP share prices to hit $25 by March.And investors can look for a small tuck-in acquisition as has a very clean balance sheet.    https://woodbridgegrp.ca/