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The Canadian insider blog discusses news and insight found among insider and significant shareholder filings in Canada.
 
Ted Dixon is co-founder and CEO of INK Research. He is the creator of the INK Canadian Insider Index, and is the editor of the daily Morning INK and weekly Market INK reports. He is a regular contributor to the Globe and Mail's Globe Investor pages and has also worked as a part-time lecturer in corporate finance at the British Columbia Institute of Technology. Before starting INK, he worked at the Connor, Clark & Lunn Financial Group where his responsibilities included portfolio strategy and product development. He has also been an analyst at the Fraser Institute and a treasury specialist at the TD Bank. He is a Chartered Financial Analyst and member of CFA Vancouver. He holds an MBA in Financial Management from the University of Chicago, and a Bachelor of Commerce from UBC. Listen to his weekly economic commentary on Vancouver's Roundhouse Radio FM 98.3.
 
Victor Wong is a business and client development associate at Canadian Insider and an avid market watcher.
 
Nicholas Winton contributes technical commentaries on the INK Canadian Insider Index. Nicholas also writes the High on the Hog blog.

 

 

As Canada risks stagflation, insiders stick with the basics

August 4, 2015 - On Sunday, Prime Minister Stephen Harper decided to get an early start on his campaign, making an expensive early election call which will cost taxpayers up to an extra half billion dollars according to the Canadian Taxpayers Federation. Although we doubt that the extra costs have been factored into the incumbent government's razor-thin balanced budget projections, it may end up as a rounding error in any event. We say that in light of the fact that crude oil is now trading near US$45 per barrel, well below the current budget survey assumptions of US$54 for 2015 (projections get even more optimistic in subsequent years).

As broker problems brewed last fall, Home Capital Group CEO sold

July 31, 2015 - At the request of the Ontario Securities Commission, late Tuesday Home Capital Group (HCG) reported more details on its July 10th press release when it announced that a "review of its business partners led to the company terminating relationships with certain mortgage brokers." On Thursday, investors learned that these relationships with some 45 brokers in total had been been terminated because "falsification of income information had occurred" on mortgage applications.

According to the company, the mortgage broker terminations took place during the period from September, 2014 to March, 2015. During that period, CEO Gerald Soloway sold $2.6 million worth of shares into the public market. One could argue that the amounts were modest. Indeed, after years of low interest rates by the Bank of Canada and unrestrained assorted foreign inflows into the local property market, $2 million is only enough to snag a modest single family home in Vancouver. 

The sun is still out for Alimentation Couche-Tarde

July 29, 2015 - Today we revisit Alimentation Couche-Tarde (ATD) which we last featured in our morning report on October 16th. On that day it closed at $35.25 and it is up 63.3% since then, closing at $57.56 on July 28th (and setting a new 52-week high of $58.75 on July 20th along the way). There has been some recent insider selling from the CEO and CFO which is something to keep an eye on, but at this point it may be nothing more than clearing the decks for more option grants.

Alimentation Couche-Tarde is ranked tenth on the July edition of our INK Edge Top 40 on the equally weighted basis of valuations, insider commitment and price momentum. This is up thirty spots from its rank in the June edition of the list, and it appears to be the beneficiary of the trend that has seen other grocery type companies like Empire Company (INK Edge Outlook: sunny; EMP) and George Weston (INK Edge Outlook: sunny; WN) added to this month's edition of the list.

As Ottawa beggars thy consumer, insiders tag along

July 27, 2015 - The Canadian consumer put in a strong showing in May as retail sales jumped 1% over the previous month. That strength could be in jeopardy, however, as policies targeting a lower loonie may put a dent in the prosperity of most Canadians. In particular, if BMO Chief Economist Doug Porter and his colleagues are right, a weakening loonie could soon clobber the real spending growth of Canadians. According to their July 24 report, as the loonie rose from 2002 to 2008, real consumer spending growth in Canada averaged an annualized growth rate of 3.8% which compared favourably to the weak loonie period from 1992-2002 when real consumer spending rose only 2.4% per year. The bottom line, according to the BMO team, is that a weak loonie for the Canadian consumer "is bad news, period."

North American oil & gas insiders showing caution

While Canadian insiders continue to signal that the Energy sector is undervalued, they are being much more cautious in their buying during the current pullback in oil & gas stocks than they were in early winter. The muted response of insiders may be partly explained by trading blackout restrictions. Alternatively, insiders might be content to wait to see how oil markets settle out given the risk of more Iranian crude hitting the market next year on the back of the 6-nation nuclear deal struck in Vienna.

CEO buying at NioGold

While yesterday we featured a junior stock which was a contrarian situation, today we look at an example of relative strength in NioGold Mining (NOX). We last featured NioGold here on April 15. The stock has been relatively flat since the report which translates into strong relative performance against the broad iShares S&P/TSX Global Gold Index Fund Units (XGD) which over the same time period is down 25.5%.

The stock has come to our attention because CEO Robert Wares (featured on our Power Player blog last year) was a cofounder of Osisko Mining and has been buying recently. It is also notable that Osisko Gold Royalties (INK Edge Outlook: cloudy; OR), a spin off of Osisko Mining, is the largest insider equity holder at NioGold with 19.36% of shares outstanding.

Oversold signals at Foran Mining (FOM)

The share price of base metals junior Foran Mining (FOM) has tumbled since we featured it in our morning report on May 4th when the stock closed at $0.265. The share price last closed at $0.14 on July 17th (and hitting a new 52-week low on the day of $0.13). The stock has been dealt a double-whammy of renewed US dollar euphoria on the back of a promised but undelivered rate hike, and a wave of risk aversion stemming from concerns over Greece and China. Certainly, China has played havoc with commodity markets over the past 48 hours as a tightening of rules governing non-bank lending may have contributed to broad selling of precious metals. Many industrial metals including copper were dragged down for the ride.

Who is clapping for Canada's central bank planned economy?

July 20, 2015 - If there was any doubt that the current government in Ottawa has thrown in the philosophical towel on free market oriented economics, it was removed last week when its central bank governor cut rates back down to great financial crisis levels. The lack of a crisis did not deter the central bank from pushing overnight rates into emergency status, a situation last seen during 2009 when the global economy was on the brink in wake of the Lehman bankruptcy.

On Wednesday, central bank governor Stephen Poloz even had to admit that the rate cut could negatively impact financial stability "vulnerabilities." This rolling of the dice has brought out the critics, which now even include some Bay Street money-bank economists. 

Make that two Poloz rate cuts to go!

Bank of Canada rate cuts may well have been the most popular item at global convenience store operator Alimentation Couche-Tard (INK Edge outlook: sunny; ATD.B) Wednesday, if not with their customers certainly with shareholders. The stock was the best performing name (+4.2%) in the INK Canadian Insider (CIN) Index as insider stocks rallied on the back of a quarter point drop in the central bank's overnight rate. However, the Poloz cut did not lift all boats. While both the INK CIN Index (+0.14%) and the S&P/TSX Composite Index (+0.43%) rallied on the rate news, both the S&P/TSX Completion (-0.37%) and Small Cap (-0.44%) indices dropped. Perhaps most surprising was a drop in the Dividend Aristocrats Index which suffered a -0.47% loss.

Insider sentiment remains upbeat despite China and Greece woes

July 13, 2015 - As of early Monday morning, there were only a few details available of a deal reached between Greece and its creditors for another bailout. Early indications suggest the agreement will on balance support growth. It may also increase the chances that the Federal Reserve will be able to raise rates later this year.  

Meanwhile, in China it may be too early to tell whether the summer collapse in the stock market signals either a growth or political set back for the world's second largest economy. In particular, China-related margin calls may well have been primarily responsible for the plunge in metals markets last week. It will take some time to see whether there was more to the metals wipe-out than simply the margin clerks at work.

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