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Buzz on the Bullboards: Digesting Elections, COVID, Q3, & M&A’s

Stockhouse Editorial
2 Comments| October 29, 2020

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(Image via Fraser Health.)

In five days, the final votes in the presidential election will be cast.

New daily COVID-19 cases have spiked and talks between Democrats and the White House on reaching a fiscal stimulus deal before Election Day have stalled yet again.

As for the markets, both sides of the border have seen some instability during a busy week of Q3 earnings releases, which have dominated the attention of Bullboard posters in recent days.

Gatekeeper Systems Inc. (TSX-V: GSI, Forum), a leading provider of intelligent video solutions for public transport and smart cities, announced this week that it had received purchase orders from a school district in Virginia to equip their fleet of approximately 50 buses with the Company's recently launched Intelligent Temperature Sensing Systems (ITSS, a contactless system that can determine body temperature within 20 milliseconds) and new video camera system upgrades.

This builds upon GSI’s initial purchase order for four of its new ITSS from a leading original equipment manufacturer (OEM) school bus dealer located in Northeastern USA. Together, they will finalize the design of installation brackets and installation procedures for the many different school bus models already in service.

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Air Canada Inc. (TSX:AC, Forum) shares have been hit hard by COVID-imposed travel restrictions, but the airline has stated its approval of a joint initiative between Canada’s federal government and the Province of Alberta for a pilot project to test international and transborder travellers arriving in Alberta for COVID-19.

Earlier this year, Air Canada partnered with McMaster HealthLabs (MHL) and the Greater Toronto Airports Authority for a study on testing that continues to yield results that demonstrate the validity of testing as a means to ease travel restrictions and quarantine requirements.

Air Canada’s President and Chief Executive Officer, Calin Rovinescu hopes this step will help revive travel domestically. After all, Canadians expect the data from these test results to lead to a loosening of the federal government’s quarantine requirements immediately, allowing families to reunite and the economy to resume.

“The results from the McMaster study at Toronto -Pearson were instrumental in guiding the federal government and public health agencies to add the easing of quarantine to this latest testing initiative.”

AC’s Chief Medical Officer Dr. Jim Chung added that the preliminary results from the MHL study provide evidence that testing passengers on arrival into Canada may be an effective way to screen for COVID-19.

“The data has provided the federal government and the government of Alberta with the confidence to move forward with this new testing initiative. In fact, today Alberta Premier Jason Kenney thanked Air Canada for helping advocate for measures to safely reduce quarantine, which is an encouraging step in the continued push for a secure resumption of air travel. Rapid testing is also a means to enable governments to relax current blanket travel restrictions and quarantines in a measured way while still safeguarding the health and safety of the public.”

Another airline hit hard by the pandemic that investors have been watching is Chorus Aviation Inc. (TSX: CHR, Forum). The Halifax-Nova Scotia based company saw a recent spike in its share price and issued a statement in response to this recent share price appreciation saying that it had received a preliminary, non-binding acquisition proposal from a third party that is subject to a number of significant conditions. CHR admitted that there can be no assurance that any transaction will occur, or as to the timing, structure or terms of any transaction.

(Chorus Aviation Inc. stock chart. July – Oct 2020. Click to enlarge.)

Another company flying in the skies that is seeing a lot of Bullboard chatter is Bombardier Inc. (TSX: BBD , Forum), who is making moves in one of its major markets – Australia.

BBD announced the development of a new service centre at Essendon Fields Airport in Melbourne, this week, building on its commitment to the Australian market and establishing the next key building block in its growing global customer support network. The new OEM-operated Melbourne Service Centre will employ some 50 people, including more than 40 highly skilled technicians and boost Bombardier’s customer service footprint in the Asia-Pacific region by roughly 50,000 square feet. On November 5th, Bombardier will publish its financial results for Q3 2020.

Big news from Industrial favourite PyroGenesis Canada Inc. (TSX-V: PYR, Forum). The Canadian high -tech company has received conditional approval from the Toronto Stock Exchange to graduate from the TSX Venture Exchange and list its common shares on the TSX. Final approval of the listing is subject to PYR fulfilling all the requirements of the TSX, including the completion of the Company’s public offering, which was submitted last week.

Big M&A news has topped the Energy Bullboards this week.

Cenovus Energy Inc. (TSX:CVE, Forum) is set to create Canada's third largest oil and natural gas producer by purchasing a 61% stake in its rival Husky Energy Inc. (TSX: HSE, Forum). It is an all-stock deal that implies a transaction equity value for Husky of roughly $3.8 billion (CAD).

Husky, meanwhile, stated that it anticipates it annual run rate synergies of $1.2 billion (CAD), largely achieved within the first year, independent of commodity prices. Expected free funds flow break-even at West Texas Intermediate (WTI) pricing of $36 (USD) per barrel (bbl) in 2021, and at less than WTI $33 (USD) / bbl by 2023.The transaction is expected to close by Q1 2021.

What the "Buzz"

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Its Q3 earnings season and several major energy companies will be informing shareholders on how their investments have fared during this challenging time.

Integrated energy company Suncor Energy Inc. (TSX: SU, Forum) released its Q3 2020 results on Wednesday, reporting revenue down 34% to $6.5-billion, due to both lower production and oil prices.

Crescent Point Energy Corp. (TSX: CPG, Forum) will report its Q3 2020 financial and operating results later this morning, You can find out more about how to tune in here.

Enbridge Inc. (TSX: ENB, Forum) will host a conference call and webcast to provide an enterprise-wide business update and review its Q3 2020 results on Friday November 6th, at 9am EST / 6am PST.

These reports join the likes companies big and small across the market spectrum and marks the last reports that people will see before the final votes in the US election are cast. This brings us to this week’s poll question - Do you think the US economy will be in a better place following the election?

Click the image below to cast your vote.

(Click image to vote.)

Taking a look at last week’s poll, it seems a number of you are ready for the next wave of connectivity, but the majority are fine with the current level of data speeds.

It isn’t just major energy and tech companies delivering their fiscal 2020 reports, there is a lot to hear from cannabis businesses, as well.

Investors will want to keep an eye on HEXO Corp. (TSX: HEXO, Forum) will release its complete financial results for its fiscal Q4 after market hours today. The consumer-packaged goods cannabis company will host a webcast for investors and analysts beginning at 8:30 am EST (5am PST) this Friday. You can find out more here.

Aurora Cannabis Inc. (TSX: ACB, Forum) will hold its Q1 2021 financial call on Monday, November 9th, at 8:30 am EST (5am PST) before the market opens and will also discuss its Director Compensation Plans.

Aurora’s Q4 2020 total net revenue was $72.1 million, a 5% decrease from the prior quarter. Cannabis net revenue was $67.5 million in Q4 2020, a 3% decrease from the prior quarter. Adjusted gross margin, before FV adjustments, on cannabis net revenue1 was 50%, up from 43% in Q3.

The medical and consumer cannabis company also announced this week that it had completed its At-The-Market program and because of this, it has filed a new preliminary short form base shelf prospectus with securities regulators in each of the provinces of Canada (except Quebec) and a corresponding shelf registration statement on Form F–10 with the United States Securities and Exchange Commission. ACB’s current cash position sits at roughly $272 million.

Finally, Cannabis Bullboarders have been tracking Canopy Growth Corp. (TSX: WEED, Forum) for some time, and WEED has been making headlines through its medical division, Spectrum Therapeutics.

Spectrum is supporting national mental health service provider Wounded Warriors Canada and its mental health services for veterans and first responders for the month of November through a $50,000 donation to WWC and is launching a fundraiser, matching donations from its patients and staff through the month of November up to an additional $20,000.

Next week, we’ll be able to see how the dust has started to settle in the following the release of major earnings results, and where investors on Stockhouse stand. Given the lively discussion and serious investment passion on the Bullboards, you can bet that things will get heated. For previous editions of Buzz on the Bullboards: click here.

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FULL DISCLOSURE: PyroGenesis Canada Inc. and Gatekeeper Systems Inc. are clients of Stockhouse Publishing.

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