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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.

 

 

Shopify rallies $8 after being featured in Insights

On Monday night we published and distributed our weekly Canadian Insider Insights newsletter, Will the bulls keep up the energy to win? Our insider of the week was Shopify (SHOP) CEO Tobias Lütke. In the report, we highlighted that thanks in part to his large holdings in the company, the stock ranked very high in terms of insider commitment.

Shopify CEO Tobias Lütke*

We suggested this was bad news for short-sellers as our INK short signal for the stock was pointing to a potential short-squeeze. Generally, we believe short-selling strategies are best targeted at stocks that do not have strong insider commitment rankings. More often than not, we expect the insiders to come out on top of a short-selling challenge.

Shorts hooked on High Liner Foods

High Liner Foods is the most shorted stock on the TSX based on IIROC and INK data. Shorts added to their positions as the stock rallied 11.8% since March 15th. However, their bets may still pay off. Based on INK signals, the stock appears at risk of a bearish set up based on a combination of relatively large short-selling and average insider commitment.

Will James Bay lead the way for a junior resource stock revival?

In his April 4th Discovery Watch broadcast, John Kaiser bemoans the continued grinding lower of junior resource stocks. He closely tracks the state of the junior resource area on his website KaiserResearch.com, and he does not like what he sees. Looking at the average traded price and traded value of the junior resource stocks on the TSX Venture exchange, he notes that the traded value of resource stock is a fraction of the total traded value on the exchange, with the rest being non-resource including cannabis-related stocks:

What's really discouraging is that not only is there no rise in the traded value of resource juniors, but the traded price is flat and has been flat for some time now. We are now in the 8th year of a junior resource sector bear market

For a turnaround, Mr. Kaiser is watching for developments that could get traditional mining investors excited about the group again. Mr. Kaiser identifies two key investing audiences for junior mining.

Sorry shorts, housing finance stocks make a comeback

Have we reached peak housing pessimism in Canada? The word has been out on the street now for months that mortgage growth has slowed, giving investors plenty of opportunity to sell their financial stocks and head for other areas. But, has most of the bad news been factored into prices? The answer may be yes given some of the new additions to our April INK Top 40 (available for Canadian Insider Club members).

First National is trading near 52-week highs (click for larger).

High profile lender Home Capital Group (HCG) joined the list along with lender First National Financial (FN). For investors, who find the Home Capital story too risky, First National may provide more appeal. Not only does the company focus on the prime mortgage market, but the stock also offers a prospective annual dividend yield of 6.1% giving investors a bit of a safety cushion. The stock is a member of the INK Canadian Insider Index.

Insights: A real rally requires some Energy

We have just published our April 1st Insights A real rally requires some Energy. We are a bit later than usual this week as we have been busy rolling out and working on lots of new features for our INK Research and Canadian Insider users. Last week, on Canadian Insider we introduced INK Edge outlooks along with a new look for our company pages. Over at INKResearch.com, we have been implementing a faster SEDI feed that delivers more frequent filing updates and alerts. We are going to be making some big changes at Canadian Insider on that front as well, so stay tuned!

As for this week's newsletter, we zero in on the oil patch which is a bright spot in terms of insider sentiment. Don't forget, if you want to receive the newsletter in PDF format via email, you can do that in your alert settings if you are a Canadian Insider account holder. If you are not already a member, sign up here.

New value-added features on Canadian Insider

We have reworked the company pages on Canadian Insider, and they include two new value-added features. First, we now show INK Edge outlooks for all Canadian and US stocks that we rank. For a stock to rank, it typically needs to have a market cap of over $25 million and a trading history of at least 6 months.

INK Edge outlooks and short data now on Canadian Insider

The INK Edge process is 100% data-driven with no subjective input from INK analysts. That means no stock promotions. Canadian Insider is supported by our Canadian Insider Club subscribers and we do not accept payments from companies or their promoters for coverage or ratings.

US transports insider sentiment is sinking again

In our March 27th INK subscriber US market update, we noted the divergence in insider sentiment between the Oil & Gas Exploration and Production (E&P) industry and the Industrials sector. The former was behaving in a bullish fashion and remained at a healthy level with our indicator above 100%. That means there are more stocks in the group with key insider buying that selling. In contrast, sentiment in the Industrials was depressed, with our sector indicator in the danger zone below 20%. Industrials insiders were taking money off the table while E&P insiders were adding to their positions.

US transportation stock insider sentiment is at a depressed level

The Industrials sector is home of transportation stocks, a group followed by many market participants. Drilling down to this industry level, we see that insiders in transportation stocks are in profit-taking mode. In fact, our Transportation Indicator is back to the depressed levels we saw early last fall, right around the time the iShares Dow Jones Transportation ETF (IYT) peaked.

Trump nominee Moore has a point: Focus on commodity prices

(Updated with chart) - Trump perma-critics should take a step back from their criticism of his nominee Stephen Moore. The latest attacks against Moore evolve around an opinion piece in the Wall Street Journal suggesting that the Fed focus on targeting stable commodity prices. If one believes that the Fed should be targeting consumer price inflation, a concept that is debatable on its own, focusing on commodity price inflation makes more sense than promoting asset inflation which is what the Fed, the Bank of Canada and other central banks have been doing for the past decade. 

Stephen Moore: Fed should seek stable commodity prices (picture Gage Skidmore)

 

Moreover, where have the Moore critics been as central banking made a mess of asset markets while implementing policies that undermined their cherished goal of reaching 2% consumer price inflation?

Insights: Another Fed egg face

This week's edition of Canadian Insider Insights is now available: Another Fed egg face.

Jerome Powell

Markets haven't reacted well to the Fed's 180 degree turn on the economy and we take a look at what we are watching now to assess the risks. The weekly archive is here and registration is not required.

On credit spreads: Narrow, widen, repeat, and die?

While it may be one thing for the S&P 500 to fall 1.9% in one day as it did on Friday, it is quite another when it happens as bonds soar, the Treasury curve inverts, and credit spreads widen. That combination was in full effect Friday and has put global investors on edge. So, does this signal the death of the 2019 stock market rally? In his Friday evening March 22nd broadcast, Bob Hoye from chartsandmarkets.com is watching for the next move in credit spreads for clues.

While stocks tumbled Friday, the 3 to 7-year Treasury ETF soared as the yield curve inverted

As is usual, the market historian looks at where we have been in order to narrow down the possibilities of what might happen next.

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