Markets were down on Tuesday with the S&P 500 down 2.8%. Toronto was only down 0.7% and that was in spite of a big drop in oil prices.
The recently high flying tech names that I follow were down. Apple – down 6.7%, Shopify – down 4.4%, Amazazon down 4.4%.
Aurora Cannabis which has looked like a bankruptcy candidate for some time was down 10.8% after announcing a huge write-off.
AutoCanada was up 6.0% although it did not release any news.
Wine maker Andrew Peller was up 5.6% after releasing earnings.
Our report on the Boston Pizza Royalties Income Trust is updated and rated only Speculative Weak Buy / Hold at $6.73. The pandemic has totally changed their world and they suspended cash distribution in March. As of Q2 their revenues in the Fund were down by about 50%. This will now be improving. But the bank has imposed higher interest rates as well as a requirement to use some of their cashflow to pay down debt. The distribution is expected to be reinstated by the end of this year. But it’s probably prudent to assume that the distribution will initially be no more than about half of the former level. That would still be a good yield at just over 10%. But even that is not a certainty. It could be bought or held on speculation that things will get better but it remains risky given all the uncertainties.
If bought at this price it should be bought as more a speculation on a higher unit price as opposed to buying for a cash distribution since the distribution level that will be reinstated is unknown.
It is most unfortunate because previously it looked like a very steady provider of distributions.