On Wednesday, the S&P 500 was down 0.1% and Toronto was down 0.4%.
Melcor Developments was one of the larger decliners on our list – down 2.7% to $12.55. That means the shares are trading at about 40% of book value. And the book value consists of real estate assets with no goodwill on the books. The stock is thinly traded and has little or no analyst coverage. It seems quite likely it will report a weak Q2. The company had bought back shares from October through March. They were only allowed to buy back a tiny amount each day, but they did so regularly for about six months. After the end of March they stopped buying. Possibly they want to conserve every last dollar at this time when their sales are lower? Or possibly they decided that the small amount was just not worth the bother. Insiders were also not buying except that one director bought just a few shares.
Due to the low share price, Melcor’s dividend yield is now attractive at 3.9%. The company has indicated that it would like to maintain a reliable dividend but that cannot be guaranteed if earnings decline too much.
Stantec was down 2.2%.
FedEx was up 2.5% despite its weak earnings report and weak outlook.
Trade uncertainties are weighing some stocks down. Checking the latest rail car loading reports published today:
U.S. rail car traffic is noticeably down compared to the two prior years. Categories that are down include intermodal (which is consumer goods), food and farm products (excluding grain), metallic ores and minerals. On the other hand, petroeum product car loads are up substantially.
Canadian rail car loadings in contrast are running slightly higher than 2018 and substantially higher than 2016 and 2017. Most categories are up but coal is down noticeably and farm products are down slightly. Petroleum car loadings are up substantially.
Oil prices including for Western Canadian Select have rebounded somewhat in recent days as has the Canadian dollar.