Friday’s trading session ended with the S&P 500 up 0.3% and Toronto up 0.6%.
Costco reported earnings after the close that were said to exceed expectations for both revenue (where expectations were already high) and earnings. But the shares fell a bit in after -hours trading becasue th e COVID-related costs were higher than expected. Costco is still paying a $2.00 per hour bonus and plans to continue, they said at least through October. Good for them!
I have added Alcanna Inc. to our list rated Speculative Buy at $3.14 (It closed today a bit higher at $3.20). This is primarily an Alberta liquor retail chain with 194 liquor stores in Alberta and 32 in B.C. It also has 31 Cannabis stores in Alberta and 1 in Ontario and plans to open about 6 more in Ontario this fall. The company is under relatively new management.
It actually has quite a poor recent profit history until Q2 2020 when it had a large GAAP profit mostly on selling its stores in Salsa and was also reasonably profitable on a adjusted basis due to a surge in liqour sales with the pandemic. It seems all but certain that it will have had strong sales growth in Q3 as well. The insider trading signal is quite strong. So, the thesis in buying this is that this is a recovery from prior poor results that will continue due to better management and due to the ongoing pandemic. And also the decision to buy is supported by the insider trading signal. But this is a speculative pick considering its poor recent history.
We actually had this company on the list for a number of years under its former name Liquor Stores N.A. We had given up on the company and concluded that the management at that time was very poor. The last rating on it was Sell and that was as of August 29, 2014 at $13.37 and it was rated Sell to start 2015 at $15.40. It was rated Sell at the start of 2016 at $8.37 but managed a gain that year. It was dropped from our list by the start of 2017. New management took over in 2018 and appear now to have probably turned things around finally.
Here is some good news: The Edmonton Airport will pilot a saliva test that gives a positive or negative result in under one minute. It is true that people could still be positive but not yet testing positive. But the risk that a traveler is positive after testing negative in a saliva test would seem to be very low. That combined with the masks and distancing we are all doing should be enough to eliminate the 14 day isolation (for those testing negative) if there is any sanity left. But that sanity part is very questionable because those people who never travel are liable to loudly protest eliminating the 14 days isolation.