English: Bombardier CSeries mockup Italiano: Modello dimostrativo del Bombardier CSeries (Photo credit: Wikipedia)
BBD.B : TSX : $4.64
Shares of Bombardier were higher after press reports indicated that EasyJet is on the verge of a large new order that may include BBD’s CSeries commercial jets. As reported by LesEchos, the British company, which reported a significant improvement in half-yearly results, is preparing a new giant order of more than 100 aircraft in the coming weeks, which would incorporate Airbus A320 or Boeing 737, as well as Bombardier CSeries. “Our future order will focus on Airbus or Boeing, but also on Bombardier,” said Carolyn McCall, Executive Director, at the presentation of the half-year results.
Recently, BBD reported its Q1/13 report where the company reiterated its 2013 and 2014 guidance.
Key points include: BBD expects 190 business jet deliveries, up from 179 in 2012, and 55 regional airliners, an increase from 50 units in 2012.
BBD’s Q1/13 business jet orders of only 27 units were on the low side.
Canaccord s Analyst David Tyerman think this is temporary. Management reiterated that it is cautiously optimistic about order prospects
given the company’s pipeline, especially in larger aircraft types. Regional airliner orders were very weak in Q1/13, with no regional jets ordered and only four turboprop orders secured. However, as with business jets, these orders are lumpy.
BBD continues to believe it has a good shot at larger U.S. airline orders as those airlines up-gauge smaller regional jets. In addition, the company is positioned to capture further orders from Garuda from option conversion and Russia, China and Africa hold some promise.
Posted by jackbassteam on May 21, 2013
Official seal of Lloydminster (Photo credit: Wikipedia)
TBE : TSX : C$2.12
Twin Butte Energy Ltd. is an intermediate producer focused on heavy oil development along the Lloydminster fairway of Alberta and Saskatchewan. The company adopted a yield plus modest growth strategy upon closing its acquisition of Emerge Oil & Gas in early 2012.
Twin Butte released first quarter results largely in line with its guidance and CG/consensus estimates. Despite headwinds from wide heavy oil differentials, strong condensate prices that factor in its blending costs, adverse weather, and isolated production challenges at Primate, Twin Butte maintained a payout ratio below 100% with average production down only 1.6% QoQ. We have maintained our BUY rating on the stock and target price of C$3.20, based on a 1.0x multiple to NAV and reflecting a 2013 EV/DACF multiple of 6.8 times.
Q1 in line, no surprises. Production averaged 17,254 boe/d, in line with our estimate of 17,326 boe/d and consensus of 17,190 boe/d. CFPS of $0.13 was also in line with our $0.13 and consensus of $0.12.
Prudently scaled back CAPEX in January but narrowing differentials could enable re-acceleration in H2/13. Capital spending was previously scaled to $85 million (from $110 million) given isolated issues at Primate and widening heavy oil differentials. Given an improved differential outlook, we see potential for a H2/13 CAPEX increase of $5 to $10 million.
Payout ratio remains best in class; current dividend is solid. Twin Butte maintains one of the lowest total payout ratios amongst the high yield Intermediate E&P group with a total payout ratio pre/post DRIP of 100/95% on our 2013 estimates.
Twin Butte trades at a 0.7x multiple to CNAV, a 5.2x EV/DACF multiple and $41,800 per BOEPD based on our 2013 estimates, compared to peer group averages of 0.7x CNAV, 7.8x EV/DACF and $64,400/BOEPD.
Posted by jackbassteam on May 16, 2013
TEAR : NASDAQ : US$7.96
TLB : TSX
TearLab Corporation has commercialized a proprietary tear testing platform, the TearLab Osmolarity System, that enables eye care practitioners to test for highly sensitive and specific biomarkers using nanoliters of tear film at the point of care. Their first product measures tear film osmolarity for the diagnosis of dry eye disease (DED). The company is headquartered in San Diego, California.
TEAR crushed our Q1 bookings estimate driven by strong growth in its
Master’s program with large ophthalmology practices. We expect the
strong ramp to continue through FY13. We raise our price target to $10
Strong Q1. TEAR reported very strong Q1 revenues of $2.5M (up 54% sequentially), which topped our/Street’s $2.2M estimates. TEAR booked 388 orders, well ahead of our 234E. TEAR placed 324 instruments in Q1, well ahead of our 114E and up from 103 in Q4.
Master’s program paces growth. Multi-instrument placements into high-volume group ophthalmology practices accounted for over 40%
of its 388 bookings. Use of implementation specialists is helping practices implement testing.
Strong ASCRS sets up Q2. TEAR had a good show at ASCRS, which gives us added confidence in our Q2 forecast of 375 orders.
Sales force. TEAR ended Q1 with 27 direct reps, up from 23 in Q4.
Model update. We increase our 2013 and 2014 revenue estimates to $15.5M (from $13.4M) and $30.1M (from $27.1M), respectively, as its Master’s program gains traction. Additional investment in sales and marketing spend keep our EPS estimates intact.
We raise our price target to $10 from $8, which assumes a 5x P/S multiple to our 2015E sales of $65M, discounted at 15% to 2014.
Posted by jackbassteam on May 15, 2013
Montney, British Columbia Location (Photo credit: Wikipedia)
CR : TSX : C$6.45
Crew Energy is an intermediate oil and gas company with a large portfolio of exploration and development opportunities in western Canada. The company has a two-pronged approach to corporate development, supplementing organic growth with strategic acquisitions.
All amounts in C$ unless otherwise noted.
IT’S ALL ABOUT THE MONTNEY
Crew released first quarter results which met our estimates but fell slightly shy of consensus on both production and cash flow. We believe the market will look beyond the quarter given the resumption in production levels which in our view clearly positions Crew to meet its average and annual guidance targets. Most importantly, it released an independent resource assessment on its 292 net sections of Montney rights in NEBC which in our view clearly validates management’s strategic shift towards resource capture in the play. We are maintaining our BUY rating and C$10.00 target price based on an unchanged 1.0x multiple to NAV and reflecting a 2013 EV/DACF multiple of 8.5 times.
Q1 in line with CG, a bit light versus consensus. Q1 production averaged 25,961 boe/d, generally in line with our 26,267 boe/d estimate but modestly below consensus of 26,765 boe/d. Operating CFPS was $0.28, also in line with our $0.28 but below consensus of $0.30. More importantly, Crew has resumed production levels with an average of 28,000 boe/d in April and is on track to meet its annual average and exit
rate guidance targets.
All about the Montney, tremendous value upside potential in both oil and gas windows of the play. Sproule Associates estimated 33.7 Tcf of gas in place and 7 billion barrels of oil in place (over four times larger than ARC Resource’s recent TPIIP estimate). Precedent strategic gas transactions suggest its 2.3 Tcf of contingent resources could be valued between $0.15 to $0.35/Mcf, implying $2.80 to $6.60 per share to Crew.
Crew currently trades at a 0.6x multiple to CNAV, 6.2x EV/DACF multiple, and $42,400/BOEPD based on our 2013 estimates, versus peer group averages of 0.7x CNAV, 7.8x EV/DACF, and $64,100/BOEPD.
Posted by jackbassteam on May 15, 2013
Mila (concept car division of Magna-Steyr) Alpin, 2008, seen at MOTOR SHOW ESSEN 2010 (Photo credit: Wikipedia)
MGA : NYSE : US$64.71
MG : TSX
Magna is a one of the world’s largest and most diversified Tier 1 automotive components suppliers, active in 25 countries. The company also provides
complete vehicle assembly services through its subsidiary, Magna Steyr.
Substantial Q1/13 upside surprise, guidance increased MGA reported EPS of $1.57, ahead of our $1.44 and the consensus mean $1.44. Positive surprises versus our forecast were on European sales and margins. 2013 guidance was also modestly increased.
We boosted our near-term forecast slightly given the guidance and boosted our mid-term forecast more significantly to model better European margins (but consistent with management’s goals). EPS was also boosted by our assumption that all of MGA’s current 12 million share buy back will be utilized, per management’s commentary.
Solid EPS growth expected
MGA produced 18% EPS growth in 2012 from strong North American sales and improved European margins. We forecast annual EPS growth
to slow to high single-digit to low double-digit rates through mid-decade from expectations of slowing industry growth in North America,
eventual gradual recovery in Europe, and modest margin expansion. Solid upside, with additional potential
We continue to recommend BUYing MGA for solid EPS growth, modest multiple expansion, and the potential for additional value creation from
cash deployment and/or business streamlining.
We expect EPS growth from forecast low- to mid-single-digit sales growth, based on booked business and gradual margin improvements in
Europe and Rest of World (ROW) segments.
We have boosted our valuation 0.5x to a 5.5x EV/NTM EBITDA multiple, as we think there is increasing investor interest in consumer growth
cyclical stocks like MGA. Our valuation and target is supported by our $77.61 DCF analysis.
Our target was boosted nicely (17%) this quarter based on the forecast increase, benefit from our usual one-quarter valuation period roll forward,
and the valuation boost.
Posted by jackbassteam on May 14, 2013
A petroleum drilling rig capable of drilling thousands of feet (Photo credit: Wikipedia)
TDG : TSX : C$7.06
TDG.DB : TSX
Trinidad Drilling Ltd. is a Canadian based drilling contractor with operations in western Canada, southern US and Mexico. Trinidad’s rig portfolio is largely comprised of deeper rigs. The company also operates coring rigs, surface hole rigs and barge rigs.
All amounts in C$ unless otherwise noted.
EPS (ex-FX gain) of 29c came in ahead of consensus of 26c. EBITDA of $85 million beat consensus of $80 million but was just shy of our $88 million forecast. The consensus beat is attributed to better than expected results from the company’s Canadian drilling division. TDG’s Canadian fleet realized 73% utilization vs the industry average of 58%, due to both high demand for the company’s relatively high performance fleet and management’s ability to crew virtually all of its rigs in a seasonally busy period. The division’s result drove overall company outperformance, as TDG’s -3% y-y decline in total company revenues and -8% y-y decline in total company EBITDA represented outperformance vs peers (other drillers active in both Canada and the US reported flat to -21% y-y declines in revenues and -10% to -27% y-y declines in EBITDA over the quarter).
However, we note that in order to satisfy high customer demand, TDG pushed the repairs and maintenance costs it typically incurs in the first quarter into the remainder of the year. Considering this near-term cost reallocation, but also our belief that TDG has a higher performance rig fleet that should continue to outperform longer term, we have revised our 2013/14E EPS from 60c/75c to 57c/80c. Rolling forward the estimates used to derive our target price from 2013 to 2014, our target price increases from C$8.10 to C$8.50. We note our revised target price reflects 4.5x 2014E EV/EBITDA and 10.6x 2014E P/E target multiples.
Divergence between higher vs lower performance fleets continues to surface:
On TDG’s 1Q13 results call, management noted that “older style equipment is being particularly impacted” during softer pockets of demand. We note not only are higher-performance rigs competing for the same work as lower-performance ones, but also that the ownership of NAM oil and gas assets is generally shifting towards larger-cap E&Ps, NOCs and supermajors who place higher value on top-tier equipment vs their small-mid cap E&P peers.
Posted by jackbassteam on May 13, 2013
VSN : TSX : C$13.40
Veresen Inc. is an energy-focused company with operations in the pipeline, power and NGL businesses. Veresen holds a 50% interested in the Alliance Pipeline and wholly owns the Alberta Ethane Gathering System. In the midstream business the company has a 42.7% interest in Aux Sable and 100% interest in Hythe/Steeprock gas gathering and processing complex. It also owns several power generation entities in Canada
and the United States.
All amounts in C$ unless otherwise noted.
SOLID Q1/13 DESPITE LOWER NGL FRAC SPREADS
Veresen reported first quarter recurring cash flow of $0.25 per share, modestly above our $0.23 estimate and just below the $0.26 consensus
estimate. We note that our recurring cash flow calculation removes about $0.02 per share of funds that were released from a reserve account at the East Windsor cogeneration facility. Both the Hythe/Steeprock natural gas processing facilities and the Power business delivered solid results. As expected, continued low ethane and propane-plus margins negatively impacted cash flow in the first quarter although Aux Sable generated $6.3 million (or ~$0.03 per share) of margin based cash flow that was not recognized in the quarter. If frac spreads remain at current levels or improve during the remainder of the year, we expect the company could recognize in excess of $0.12 margin based cash flow from the first quarter and from remainder of the year.
The company has narrowed its 2013 distributable cash flow guidance range to $0.97 – $1.15 per share from $0.92 – $1.19 per share, previously. While we are making no changes to our 2013 and 2014 CFPS estimates, we are raising our target price modestly to C$14.00 from C$13.50 to reflect stabilizing NGL fractionation spreads (and our view that frac spreads will improve modestly through the year) and to account for some liquids rich natural gas transportation contracts the company has signed on Alliance Pipeline.
Our 12-month target price is based on a net asset value approach and a combination of sum-of-the-parts valuation. NGL fractionation margins
are volatile and difficult to predict, and we have assumed longer-term fractionation margins are below the average of the last three years.
Posted by jackbassteam on May 10, 2013
Drilling companies most often lease the rights to drill for and produce oil. (Photo credit: Wikipedia)
POU : TSX : C$35.44
Paramount has a 35-year history of successful operations in Western Canada. It takes a long-term approach to exploration and development activity of both oil and natural gas, and boasts over 50% insider ownership. Near-term growth is focused in the Deep Basin of Alberta.
All amounts in C$ unless otherwise noted.
Paramount reported Q1/13 results largely in line with CG/consensus estimates. The company remains capacity constrained at Valhalla; however, third party restrictions have begun to abate at Musreau leading to potentially higher volumes near term. Construction of its Musreau deep cut gas plant remains on time and budget.
We have increased our expected NGL yield on its Resthaven Montney gas wells given increased long term confidence by the company, which plans to add a 12,000 bbl/d expansion to the condensate stabilizer system at its Musreau plant in 2014 at a cost of $35 million. We are increasing our
target price to C$44.00 (from C$40.00) based on a commensurately higher NAV estimate and an unchanged 1.0x multiple, while also increasing our rating to BUY (from Hold), given a potential return to target of 24%.
Q1 a slight beat; third party constraints abating. Q1 production averaged 22,591 boe/d, largely in line with CG/consensus of 22,186/22,375 boe/d.
Operating CFPS was $0.15, also in line with CG/consensus of $0.16 and $0.17. March production averaged 23,600 boe/d, a record volume.
Step change in growth approaches; contemplating another step. Its 200 MMcf/d Musreau deep cut plant remains on schedule for commissioning
in late Q3. Additionally, it now plans to add a 12,000 bbl/d expansion to the condensate stabilizer system in 2014 to handle higher condensate
yields. Finally, Paramount is in preliminary stages of planning an additional natural gas processing plant for its Deep Basin core area.
Paramount currently trades at a 0.8x multiple to CNAV, 33.4x EV/DACF, and $169,200/BOEPD based on our 2013 estimates, versus peer group
averages of 0.7x CNAV, 9.9x EV/DACF, and $75,600/BOEPD.
Posted by jackbassteam on May 9, 2013
RIM BlackBerry 7230 (Photo credit: Wikipedia)
BBRY : NASDAQ : US$15.63
BB : TSX
BlackBerry Ltd. is a designer, manufacturer and marketer of wire less solutions for the mobile communications market. Through development and integration of hardware, software and services, the company provides solutions for access to information including email, messaging, Internet and intranet-based applications
Canaccord says that its global surveys indicate mixed BlackBerry sell-through trends, with weakening sales of the Z10 over the past month but strong initial demand for the limited supply Q10.
Given the weaker Z10 sales levels combined with more limited initial supply of the Q10 than our expectations, we are lowering our BB10 selling
estimates for the May quarter from 3.3M to 2.8M units. While we anticipate stronger near-term results for BlackBerry as higher margin BB10 smartphones sell into the channel, we do not believe BlackBerry can achieve sell-through market share levels to return to sustained profit
levels. Therefore, we reiterate our SELL rating and $9 price target.
Given store surveys indicated slowing Z10 sales at Verizon, AT&T, and T-Mobile combined with lower supply levels of the Q10 with a physical keyboard than our expectations, we have reduced our May quarter BB10 smartphone shipment estimates from 3.3M units to 2.8M units.
With new BB10 smartphones facing increased high-end competition from the Samsung Galaxy S4 and the HTC One, we anticipate Z10 sales could further weaken in the consumer retail channels. However, we anticipate a strong ramp in Q10 sales over the next several months could more than offset the slower Z10 sales.
While we have lowered our BB10 estimates, we modestly lower our 2013 LPS estimates given our belief BlackBerry may temper nearterm
marketing plans until supply levels of the Q10 improve.
Given our lower BB10 estimates primarily from our lowered Z10 sales assumptions, we reduce our F2014 LPS estimate from ($0.37) to ($0.44). Our F2015 LPS estimate of ($0.75) remains unchanged.
Posted by jackbassteam on May 7, 2013