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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 Fed gives up on inflation, insiders signal US stocks may get cheaper

Markets are in the process of resetting as the US central bank effectively put to rest any notion that it was going to do anything more to help inflation get back to its 2% target. On Saturday, Fed Vice Chairman Stanley Fischer addressed the Kansas City Federal Reserve economic symposium at Jackson Hole, Wyoming where he more or less repeated the same old line that the Fed expects inflation to move back to target. Mr. Fischer's speech was a polite way of saying that the Fed is going to let the inflation chips fall as they may and more tightening is on the way.

Number Cruncher: Insiders see opportunities in these 15 TSX stocks

What are we looking for?

We are halfway to the next semi-annual rebalancing of the INK Canadian Insider Index, which will be implemented on Nov. 20. Today, we look for the stocks that are leading candidates for inclusion in the 50-stock index used by the Horizons Canadian Insider Index ETF (HII). A stock already in the index before rebalancing date stays so long as it is in the top 30 per cent of all stocks ranked on the basis of the INK Edge V.I.P. criteria (valuations, insider commitment, price momentum). We replace index drop-outs with the top ranked V.I.P. stocks which are not already index members. To identify where insiders see the best opportunities right now, we focus on the top 15 INK Edge ranked TSX stocks.

Insiders are buying, but is a Canadian lost decade ahead?

As we suggested in our INK subscriber Monday market comments, we expect market participants to be fixated on what Fed vice-chair Stanley Fischer says about inflation at a key speech to be given at the end of this week in Jackson Hole, Wyoming. For more than a year we have been writing about the Fed's failure to achieve its annual inflation rate objective of 2%. The Fed's chickens are coming home to roost as market participants are calling the institution out on its claim to be working towards that 2% aim. So why are insiders buying?

Canadian real estate: last bubble blowing?

Will Canadian housing suffer the same fate as the oil and gas sector? While in our view the answer is ultimately yes, insiders are signalling if so, not just yet.

CFO buying at Valeant Pharmaceuticals

August 6, 2015 - Today we look in on Valeant Pharmaceuticals (VRX) which we last featured in our morning report on April 1st. On the day, the stock closed at $249.15. Since then, it has advanced 39% to close at $346.32 (and setting a new 52-week high of $347.62) on August 5th.

Valeant Pharmaceuticals has caught our interest again because their new CFO has been spotted buying recently. Mr. Robert Rosiello was appointed as CFO this summer on July 1st. Although the terms of his compensation are not yet disclosed, we suspect that he like other executives at the firm is required to hold shares in the company. Mr. Rosiello does not appear to be wasting any time putting in buy orders. 

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.

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