July 17, 2017

On Monday, the S&P 500 was about unchanged while Toronto edged down 0.1%.

There were not any particularly noteworthy movements in the stocks on our list.

CRH Medical issued a press release explaining that it will face lower revenues in 2018 due to lower reimbursement rates for its services which are mostly billed to various government and commercial health plans. The company estimates that the changes will reduce 2018 revenue by 8.5% and EBITDA by 13.5%. Net earnings would presumably decline more than that. But the company also stated that it would continue to have an EBITDA margin of about 47% and that it was continuing to focus on acquisitions and organic growth. Overall, I suspect this will turn out to be quite a good investment at today’s price but of course there are never any guarantees. I have perhaps already sunk somewhat more than a prudent amount into this name. Nevertheless I added to that today and bought some in the account of a relative for which I have trading authority.

Statistics Canada reported on non-residential building construction investment in Q2. For the country there was small gain but several provinces had declines. The comment on Alberta was interesting:

“The largest decline occurred in Alberta, followed by Saskatchewan. In Alberta, the decrease was mainly the result of lower spending on both institutional and commercial building construction. Despite the decrease in spending, Alberta had the second-highest total spending on non-residential building construction ($2.5¬†billion), accounting for¬†20% of total spending for the country.”

So Alberta still accounted for 20% of the nation’s non-residential building construction. That may or may not be sustainable. But for the moment, any notion that Alberta’s economy has ground to a halt is greatly exaggerated. There may not be much growth in the Alberta economy. But there is also not much if any decline overall. Yes, the unemployment rate is up but the rate has also started to improve. GDP declined in 2016 but will likely grow in 2017.


I just noticed that Statistics Canada had reported new vehicle sales on Friday for the month of May. There was an absolute surge in Alberta sales (up 17%). This should mean that AutoCanada will have done well in Q2.