A humorous look at the companies that caught our eye, for better or worse, this week
BRP (STAR)
DOO - TSX
You’re enjoying a quiet, peaceful Labour Day weekend at the cottage – until a bunch of idiots on Sea-Doos show up and ruin everything. Well, your loss is BRP’s gain. Shares of the company – which also makes Ski-Doos, ATVs and other vehicles – surged after BRP reported a 54-per-cent increase in revenue and 69-per-cent gain in earnings for the second quarter, helped by strong demand for personal watercraft. With BRP also raising its full-year outlook as supply chain issues ease and consumers look for ways to break the pandemic boredom, the lake isn’t going to get any quieter, unfortunately.
Zoom Video Communications (DOG)
ZM - Nasdaq
Meeting in person? With, like, everyone breathing the same air? The idea may scare you, but not as much as it scares shareholders of Zoom Video Communications. With workplaces and schools reopening and more people socializing in person, the video conferencing company projected that revenue will fall in the third quarter from the second quarter, which would mark the first sequential decline since Zoom went public in 2019. Now that user growth is slowing and the stock is down by roughly half from its peak, investors in Zoom are full of doom and gloom.
Canadian National Railway (STAR)
CNR - TSX
When regulators block a takeover deal, investors usually don’t take it well. But in CN Rail’s case, they were thrilled. Shares of Canada’s largest railway climbed after the U.S. Surface Transportation Board, citing public interest concerns, rejected the voting trust that CN had proposed for its US$29.8-billion offer to acquire U.S.-based Kansas City Southern. Evidently, investors are relieved that CN won’t be piling on billions of dollars of debt to acquire KCS at such a rich price. Which clears the track for you, Canadian Pacific Railway.
PVH Corp. (STAR)
PVH - NYSE
The biggest downside to meeting with people in person again? You can’t stay in your sweatpants all day. As offices, schools and restaurants reopen, people are once again taking an interest in not looking like total slobs, which is great news for apparel makers such as PVH. Formerly named Phillips-Van Heusen, the owner of fashion brands including Tommy Hilfiger and Calvin Klein posted revenue and earnings well above expectations and hiked its full-year guidance, helped by strong international sales. The stock is dressed for success.
Duolingo (STAR)
DUOL - Nasdaq
“Je gagne beaucoup d’argent.” “Estoy ganando mucho dinero.” “Sto facendo un sacco di soldi.” Thanks to Duolingo, investors can say “I am making lots of money” in multiple languages. Shares of the company, which went public in July, have been rising since Duolingo revealed in August that revenue jumped 47 per cent year-over-year to US$58.8-million in the second quarter, driven by an increase in paid subscribers to its language learning app. With Duolingo also disclosing recently that it is developing an app to teach mathematics, investors will have no trouble counting all the money they are making.
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John Heinzl