By Jeff Sanford
Toronto, Ontario — September 4, 2017 — This week’s Tuesday Ticker brings us news on Boyd’s amazing 10-year return number, surprisingly big growth in Canadian GDP, analysts increase estimates on Uni-Select’s earnings and much, much more!
– Canadian economic analysts were surprised, and in a good way, when the latest stats on economic growth in this country came out last week. Stats Canada released the latest GDP numbers for the Canadian economy and they showed the economy to be growing at a blistering pace of 4.6 percent, much faster than just about any analyst expected. The biggest chunk of the growth—accounting for 2.3 percent of the expanding GDP—were exports of goods and services. Bitumen from the tar sands north of Fort McMurray and natural gas represented the biggest share of that growth. We’re also seeing continued growth in non-residential business investment, after seven quarters of declines, going back to 2014.
Another positive trend in the data: Disposable income is growing a bit faster than spending, a good sign that Canadian consumer spending will continue to be resilient. All in, the second-quarter growth rate was the fastest since the third quarter of 2011. Bay Street analysts had been expecting a growth rate around 3.7 percent. It was only this past July that the Bank of Canada predicted the rate would be 3.4 percent.
BASF
The massive Germany chemical and paint maker BASF said on Wednesday that its major chemical production sites at Port Arthur and Freeport in Texas have continued to operate throughout Hurricane Harvey. The company also said it is keeping a close watch on potential supply line issues. Logistics in Texas are tough right now. BASF sites in Beaumont, Bishop and Pasadena, Texas have been shut down, according to the company.
Genuine Parts Company
Genuine Parts Company (GPC), the parent company of UAP/NAPA, has announced this week that the board of directors has elected P. Russell Hardin as a new independent director of the company. Hardin is well-known in the philanthropy sector. He is President of the Robert W. Woodruff Foundation, the Joseph B. Whitehead Foundation, the Lettie Pate Evans Foundation and the Lettie Pate Whitehead Foundation. Hardin also practiced law with the Atlanta firm of King & Spalding, the elite law group in Alabama where GPC is headquartered. Tom Gallagher, Chairman of GPC, said, “We are pleased to welcome Mr. Hardin as our newest director. Russ is an extremely talented executive with a wealth of management, business and legal experience and knowledge that makes him a valuable addition to our board. We look forward to his contributions as a director of the company.”
Uni-Select
Analysts at National Bank Financial increased their estimates for Uni-Select earnings in the third quarter of 2017. National Bank Financial analysts now expect the company to post earnings of $0.59 per share for the quarter, up from a previous estimate of $0.55. National Bank also issued estimates for Uni-Select’s Q4 2017 earnings at $0.51 per share and full-year 2017 earnings at $1.89 per share.
Boyd Group Income Fund
A report on the Motley Fool notes that over the entire course of the existence of Boyd Group Income Fund, stock in the fund has done “extremely well.” According to the story, units in Boyd have appreciated 3,300 percent. Over the last five years alone shares have risen in value almost 520 percent. According to the report, even after a recent 10 percent dip in the price of units, Boyd Group Income Fund still delivered total returns of about 8 percent over the last 12 months. That’s a better return than the TSX composite index, which is up only a bit above 6 percent over the same period The analysis goes on to note that Boyd Group Income Fund has increased net income at an annual rate of 29 percent. That cash flow has translated into a growth rate of units in the fund of 18 percent on a per-share basis.
Related Market Notes
– In Houston, Texas, residents contain to deal with the aftereffects of Hurricane Harvey. A story in Wired magazine notes that as many as a million cars may have been destroyed by the flooding. By the end of last week insurance companies had received more than 100,000 claims for flood-damaged cars. Car dealerships that were not damaged in the storm have already experienced a surge in business. Estimates are that 30 to 40 percent of replacement vehicles will be brand new. The big problem, according to the Wired reporter, is that some ruined cars won’t be replaced. According to the writer “roughly 15 percent of Texas vehicle owners don’t have any kind of car insurance.” There may be up to 100,000 people who will have to pay for a new car from their own money at the same time they are replacing lost homes (many of which do not have flood insurance).
Auto resellers and recyclers will be watching out for a flood of “title washing,” which sees criminals rewrite the accident record of a vehicle. Using forgery sellers will try to hide the fact that car had been through a major event like Harvey. The story cites a 2014 study by Carfax that found, “… there were nearly 800,000 cars on US roads that had been through this sort of fraud; 650,000 of those were flood damaged or salvage vehicles.”
– Sales data from the period following Hurricane Sandy in 2012 suggests that, while car sales dipped in October, “… the recovery was equally swift in November/December.”
– Shares of a company called TrueCar rose nearly 1 percent in one day last week, while the stock gained nearly 3 percent price appreciation over the week. What is TrueCar? According to Wikipedia the firm runs an, “… automotive pricing and information website for new and used car buyers and dealers.” The service is paid for by dealerships that then obtain potential buyers’ contact information. Potential car buyers receive an online report illustrating what others have paid for cars. The company’s shares have appreciated 34 percent so far this year.
