In today’s briefing:
- Ohayo Japan | A Cautious Mood
- Update on Some of the HK Commodity Stocks We Follow
- Finding the Next Takeout in Canadian Small-Caps – Part Two
- Furniture/Furnishings Weekly – May 13, 2024
- The Highlights – Cannabis News for the Week Ending May 10, 2024
Ohayo Japan | A Cautious Mood
- Amidst cautious anticipation of impending inflation data, the U.S. markets saw minimal movement on Monday
- The Bank of Japan signaled a hawkish stance by cutting its purchase of Japanese government bonds; the move suggests potential interest rate hikes following the first increase since 2007.
- Softbank shifts its business model towards AI-focused ventures, aiming to lead the AI revolution.
Update on Some of the HK Commodity Stocks We Follow
- Continued tailwinds for oil tanker stocks with tight markets keeping rates high
- The copper supply and demand story is becoming more widely known and speculative interest is rising
- Oil corrects as the geopolitical premium subsides,but the longer-term story remains intact
Finding the Next Takeout in Canadian Small-Caps – Part Two
- Since our last note in November, there have been 9 more acquisitions in Canadian small-caps, all at significant premiums.
- In this report, we analyze how the 9 newly acquired firms fit into our 6-part framework for identifying takeout candidates.
- Our potential takeouts watchlist was up 22% vs. the TSX up 14% and XCS up 15% since November.
Furniture/Furnishings Weekly – May 13, 2024
- Furniture and furnishing stocks performed well last week. All three of the WTR indexes outperformed the broader market, led by Residential Manufacturers & Suppliers (+3.3%), Commercial/Contract Furniture (+3.2%) and Home Goods Retailers (+2.7%), which outperformed the broader markets (- 0.1% to +0.8%) and the Mass Retailers Index (+0.1%).
- Mattress demand remains weak. Tempur Sealy International (TPX) CEO Scott Thompson noted in his 1Q24 remarks, “You’d have to say the bedding industry is in a depression and has been in one for a number of quarters” , with demand down an estimated 15% industry-wide in the first three months of the year.
- For TPX, sequentially, demand was weakest in January and improved (though erratically) through April, where it was ‘flattish’. Higher- end price points were a bright spot.
The Highlights – Cannabis News for the Week Ending May 10, 2024
- Despite relatively strong earnings, the US cannabis MSOS ETF fell 3.52%, while the global YOLO ETF dropped 2.21%.
- With four of the five Tier 1 MSOs reporting, on average they have beaten revenue consensus by 2.27% and adjusted EBITDA consensus by 9.15%. See page two for more details on Tier 1 earnings results.
- Verano (NEO: VRNO, OTCQX: VRNOF) reported better-than-expected results last week and Co- Founder, Chairman, and CEO George Archos joined us on Higher Exchanges.
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