Markets were up on Tuesday as the S&P 500 gained 0.65% while Toronto edged up 0.1%.
Cameco was up 8.35% after releasing earnings and a stronger outlook.
We finally got some relief from the ever declining Brookfield Office preferred shares that are on our list. One of those shares was up 10.6%and the other 6.0%. I don’t see any news to explain that. Possibly one analyst or buyer decided that it was too cheap to resist. Unfortunately these should still be considered to be quite risky.
As I mentioned in my comment earlier today, I am puzzled why Canadian Tire has to take a “charge” as it buys back the 20% of its banking arm that it sold to Scotia bank almost ten years ago. Maye it is the fact that that they are buying an asset that they had earlier sold. They sold the 20% for $500 million. Subsequently it had been quite profitable and has grown a lot. Now they buy it back for $895 million. Possibly they are required to return it to their books at the same price as sold year ago. That would be a loss of $395 million pretax. Assuming a capital loss tax rate of about 12.5% (half the 25% corporate tax rate) then that would be $345 million after tax which is pretty close to their $328 million charge. Perhaps a coincidence. I continue to think they should have explained the reason for the charge. Again, my sense is that this is a meaningless accounting loss.