UnlockRatingThey have a hideous balance sheet. They need to make money or find an investor.
UnlockRatingLosing money in the stock market: Underestimating how much it costs to be public
Many investors seem enthralled by tiny micro-cap companies, those with market capitalization of $10M or less. We guess these investors are looking for “lottery tickets.” Yes, we know one way to get rich is to buy a million shares of a 10-cent stock and watch it go to $5. But seriously, how often does this happen? Answer: not very. Speculative investors seem to forget how expensive it is to be a public company. Suppose you are looking at an $8 million market cap company. Being public, with listing fees, regulatory fees, accounting fees, lawyer fees, shareholder costs and a PR firm might cost upwards of $400,000 annually. That is a five per cent expense drag on the entire company, every single year. If your broker tried to sell you a fund with a five per cent expense ratio, you would laugh at them. Of course, this discussion doesn’t even address the fact that small companies constantly need money and dilute shareholders with continued stock issuance. And guess what? If your stock is 10 cents, and you need $1 million in capital, you are going to have to sell a lot more shares to meet your capital budget than if your stock is $5. Our thoughts: Just forget about micro caps. Let others take these risks.
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U.S. data sinks stocks
U.S. inflation in February topped 2.8%, higher than the expected 2.7% while consumer spending rose by 0.4% that month, short of the 0.5% forecast. The numbers rattled markets, stoking fears of stagflation, and sent stocks tumbling. By Friday’s end the S&P stood at -1.97%, the Nasdaq -2.7% and the Dow -1.69%. The S&P and Dow would have been positive for the week, if not for Friday, while the Nasdaq fared the worse, down 2.59%.
Major movers on Friday: Nvidia -1.58%, Tesla -3.51%, Amazon -4.29%, Alphabet (A) -4.88% and Lululemon -14.19%. The U.S. 10-year yield edged down to 4.249% while Bitcoin sank nearly 4% to US$83,875.
The TSX didn’t escape the selling, shedding 1.6% on Friday though only -0.84% for the week. Gold’s continuing record-breaking performance help the Canadian index as the shiny rock rose US$25 to US$3,082. WTI, though, slid more than 1.1% to US$69.15. Only two sectors, including utilities, saw any gains, while tech, healthcare, discretionary and industrials led the sell-off. Key names: Jamieson Wellness 3.63%, CNQ -1.24%, CIBC -1.98%, Aya Gold & Silver -15.76% and B2Gold -8.59%. On the tariff front: Prime Minister Carney spoke to Trump by phone, and both reported a positive meeting. However, all eyes remain on the next phase of tariffs due to land on April 2.
💾 NVIDIA Corporation (NVDA-Q) -1.58%
🚗 Tesla Inc (TSLA-Q) -3.51%
📦 Amazon.com, Inc. (AMZN-Q) -4.29%
🧮 Alphabet Inc (GOOG-Q) -4.88%
🛍 LuLulemon Athletica (US) (LULU-Q) -14.19%
🅱 Bitcoin (BTCUSD) (CRYPTO:BTC) -4%
💊 Jamieson Wellness (JWEL-T) +3.63%
🛢 Canadian Natural Rsrcs (CNQ-T) -1.24%
🏛 Canadian Imperial Bank of Commerce (CM-T) -1.98%
⛏ Aya Gold & Silver (AYA-T) -15.76%
🥇 B2Gold Corp. (BTO-T) -8.59%
NORTH AMERICAN DIVIDEND STOCKS & MACRO STRATEGY
UnlockRatingHe's looking for bond proxies. Things that can work if we have a growth scare or worse. You can make $$ from bear markets. For example, some names actually buy assets that have come way down in a recessionary environment, making money from those acquisitions.
This Week’s Stock Picks & BNN Top Picks Summary: AMZN-Q, CB-N and 23 Stock and 1 ETF Top Picks (Mar 21-27)
This week were 23 Stock and 1 ETF Top Picks in a wide range of industries: Consumer, Utilities, Financials, Basic Materials, ETF, Energy, Technology and Industrials. Here are this week’s Top Picks as selected by: Michael O’Reilly, Billy Kawasaki, Brian… read more
UnlockRatingOur PAST TOP PICK with BRK.B has achieved its target at $535. To remain disciplined, we recommend covering half the position at this time and trailing up the stop (from $440) to $485.
TSX flat as Wall Street fades
A day after Trump announced 25% car tariffs and mere days before the April 2 phase of tariffs, Wall Street indices lost some ground, while the TSX held at 25,161. The S&P and Dow shed a third of a percent while the Nasdaq surrendered half.
Sectors were mixed on Bay Street, but healthcare and materials made outsized gains while tech lagged the most. Major movers: Air Canada -3.51%, Tilray 7.45%, Pet Valu 5.92%, Magna -6.92% and BRP -6.84%.
Gold rose US$37 to US$3,057, while WTI added 25 cents to US$69.90. On Wall Street, Dollar Tree soared 11.18%, AutoZone 3.98%, while Nvidia closed -2.05%, Ford -3.88% and Palantir -2.37%. The U.S. 10-year yield edged up to 4.361%, while Bitcoin held around US$87,330.
🛫 Air Canada (AC-T) -3.51%
🌿 Tilray Inc. (TLRY-Q) +7.45%
🛍 Pet Valu Holdings (PET-T) +5.92%
🚗 Magna Int’l. (A) (MG-T) -6.92%
⚙ BRP INC. (DOO-T) -6.84%
🛒 Dollar Tree (DLTR-Q) +11.18%
🛢 Autozone Inc. (AZO-N) +3.98%
💾 NVIDIA Corporation (NVDA-Q) -2.05%
🚘 Ford Motor (F-N) -3.88%
💾 Palantir Technologies (PLTR-Q) -2.37%
UnlockRatingOne of the worst things for an investor or business owner is uncertainty. The latter has no idea what will happen this week, no idea over input costs, whether they should hire more employees now. The former are paralyzed and do nothing. Business will grind to a halt, which is not good for the stock market. He doesn't see an ending soon. There's a small window--inflation takes a little time to kick in, like 3-4 months, but impact on demand is immediate. People won't spend if they expect a recession. He's waiting for the VIX to spike to 40-50 before buying. What will Q1 earnings be and the full-year outlook? Business isn't bad for companies, but they are uncertain, which will dampen their outlooks. Don't panic or react to headlines. Quality companies will get through this. Most dividends will be okay. Buy a little gold, which is good in a crisis.
BUZZING ON SOCIAL MEDIAS
UnlockRating- Tesla Inc (TSLA-Q)
- General Motors Corporation (GM-N)
- NVIDIA Corporation (NVDA-Q)
- Boyd Gaming Corp. (BYD-N)
- Intel (INTC-Q)
- Realty Income Corp (O-N)
- Invesco QQQ Trust Series 1 (QQQ-Q)
- ResMed Inc. (RMD-N)
- Advanced Micro Devices (AMD-Q)
- Loews Corp (L-N)
- Main Street Capital Corp. (MAIN-N)
- Altria Group Inc (MO-N)
- Reliance Steel & Aluminum (RS-N)
- Valaris Limited (VAL-N)
- Hasbro Inc (HAS-Q)
