Coffee is great, but nothing will give you a jolt like finding out one of your speculative investments just became the world’s next favourite meme stock. Unfortunately my speculative bets portfolio is mini and I put only as much as I am willing to lose. Or as my husband says when he looks at it, “What is this, a portfolio for ants?”
There’s no shortage of negativity in the real estate sector but Jeff Olin, one of Canada’s top real estate investors, believes there are opportunities to be had. The President & CEO of Vision Capital has built a track record of finding value in real estate when others miss it, and he shares where he’s bullish, where he’s cautious, and why supply and demand is his ultimate “North Star.” Listen now on Apple, Spotify, or YouTube Music.
Hullabaloo: Markets surged to a fresh record in Canada and the US on the back of record gold prices and a mid-day surge in tech stocks. In Canada, the TSX is less than 50 points away from hitting 30,000. In the US, tech stocks caught a bid after Nvidia and OpenAI made a $100 billion deal to build data centres. This morning, futures are flatlining as we await a speech from US President Donald Trump at the UN and a speech from Federal Reserve Chair Jerome Powell at lunchtime. This will be the first time investors are hearing from Powell after the rate cut last week. After the bell we will get earnings from Micron, which is trading near a record and boasts a 96% gain so far this year.
Easy go: Shares of goeasy were the worst performing on the TSX yesterday (-10%) after a short-seller called it a “classic subprime loan time bomb.” Jehoshaphat Research put out a 54-page report yesterday alleging the subprime lender is sitting on $300 million worth of “improperly delayed credit losses” and “serious delinquencies” buried in the balance sheet. Jehoshaphat Research was founded by Victor Bonilla, a fund manager who specializes in financial fraud. His bio doesn’t suggest he is a fly-by-night blogger, Bonilla went to Wharton, was a portfolio manager at AllianceBernstein and says his shorts have underperformed the S&P 500 by an average of 40%. goeasy held a call with analysts yesterday afternoon to refute the claims of the report. One of the ways goeasy is hiding losses is through excessive use of borrower assistance tools, according to the short report. Analysts say they know this is going on and it is a common practice in the industry. goeasy said it is happening far less than the report alleged. “Fewer than 1 in 10 customers utilize the support, not the one-third outlined in the report,” according to John Aiken at Jefferies who covers the stock and was on the management call. “Management claims that the allegation of using multiple different tools at once is not accurate, and use of tools is an exception, not the norm.” This was a top holding of small-cap fund manager Jordan Zinberg of Bedford Park Capital. He was on the podcast back in March and gives a good explanation about what the business does. “If you own it, hold it. If you don’t own it, I think it’s a great time to buy it,” he said in the episode. Full disclosure, I am a shareholder.
Better gets better: Shares of Better Home & Finance surged more than 45% yesterday after newly minted meme lord Eric Jackson said it was his next big idea. It is up another 36% in the pre-market and has already been halted for volatility. Recall, Jackson is leading the Opendoor army hoping to revive the embattled home sales platform. So far Opendoor is up 975% since he announced his position in July. Opendoor fell 12% yesterday presumably on concerns that Jackson has a new shiny object to play with (which he refuted on X saying when your wife has another child you don’t stop loving your existing children). Anyway, now he is all-in on Better which is an embattled mortgage lender that he calls the “shopify of mortgages.” Faithful listeners of the podcast will recall three months ago when Daniel Lewis of Orange Capital touted this as one of his Pro Picks. That’s when I picked it up and have been a happy shareholder! Eric Jackson will come back to the podcast next week! If you’ve got a question for him send them to questions@inthemoneypod.com
Take two and call me in the morning: Shares of Tylenol maker Kenvue are rebounding this morning 5% after yesterday’s announcement by President Trump that it is linked to autism in children. However, there was no new data or scientific evidence brought forward. Citi says they don’t expect renewed legal risks on the back of the announcement and a sales hit would be minimal/already priced in. “We estimate Tylenol is ~10% of (Kenvue’s) global sales, and ~12-15% of (Kenvue’s) operating profit,” wrote Citi’s Filippo Falorni, “Even assuming a 10% sales/profit decline for the brand, we’d estimate a modest -$40M to -$50M profit impact, or ~1-2 cents to EPS (~1-2%).” Falorni believes that was well accounted for in the stock’s drop yesterday.
Notable calls: Analysts are coming away positive from a CAE dinner hosted by new CEO Matt Bromberg and Executive Chairman Calin Rovenescu. The flight simulation company faced activist pressure at the end of last year which resulted in sweeping management changes and strategic shifts. “While it is still early days, Mr Bromberg has a clear roadmap on how to leverage CAE’s core competencies,” wrote Desjardin’s Benoit Poirier. “We consider CAE among the best ideas in our coverage universe over the next 12 months as the set-up reminds us of (Bombardier) and (Atkins Realis) in the early stages of their turnaround journeys.” His price target is $46/share implying 21% upside from here. Lululemon was cut to sell at Baird on “low near-term confidence” in the retailers ability to turnaround. While valuation is compelling, analyst Matt Altschwager says growth and margin concerns are keeping him at bay. Americold Realty was cut to sell at JPMorgan due to lower volumes and reduced occupancy. The cold storage and logistics company is already trading at a record low. Jeff Olin mentions this on the podcast, he’s not pounding the table on this one acknowledging the headwinds but says for the very long term investor now could be a good entry point in part because the “moat” around these companies is strong (not easy to just prop up cold storage facilities and make distribution contacts).
Don’t miss our next episode on resource stocks!
