The Canadian Investor - Telus Slashes Its Dividend, Couche-Tard Goes Shopping, and More Big Tech Earnings

Episode Date: August 6, 2026

In this episode of The Canadian Investor Podcast, we break down a packed week of earnings and market news, starting with Goodfood filing for bankruptcy protection and what went wrong for the meal-kit business. We then look at Alimentation Couche-Tard’s proposed acquisition of Poland’s Zabka Group, a deal that would be the largest in Couche-Tard’s history and significantly expand its presence in Europe. From there, we discuss Telus cutting its dividend by 55%, why the new CEO appears to be resetting expectations, and what the guidance cut says about the pressure facing Canadian telecoms. We also cover SpaceX’s first public earnings report, Amazon’s strong quarter and rising AI capex, Imperial Oil’s cash flow surge, Canada Goose’s continued struggles, and 5N Plus after its latest earnings release. Tickers discussed: FOOD.TO, ATD.TO, T.TO, SHOP.TO, AMZN, IMO.TO, CNQ.TO, SU.TO, CVE.TO, GOOS.TO, VNP.TO Subscribe to Our New Youtube Channel! Check out our portfolio by going to Jointci.com Our Website Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Dan’s Twitter: @stocktrades_ca Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Web player - The Canadian Real Estate Investor Asset Allocation ETFs | BMO Global Asset Management Sign up for Fiscal.ai for free to get easy access to global stock coverage and powerful AI investing tools. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.See omnystudio.com/listener for privacy information.

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Investing is simple, but don't confuse that with thinking it's easy. A stock is not just a ticker. At the end of the day, you have to remember that it's a business. Just my reminder to people who own cyclicals, don't be surprised when there's a cycle. If there's uncertainty in the markets, there's going to be some great opportunities for investors. This has to be one of the biggest quarters I've seen from this company in quite some time.

Welcome to the Canadian investor podcast. I'm Simo Ben-Ajie and I'm back with Dan Kent. We have a fun episode today. Believe it or not, it's pretty busy in the markets, not just the markets hitting all-time highs, but there's a lot of news, a lot of earnings going on. Lots to talk about. We're going to be talking about a lot of different stuff. So first of all, talking about good food, going for bankruptcy,

protection. We'll also talk about Alimentation Cousteau looking to make a big acquisition from Poland. Telis, recent earnings and their dividend cuts. We'll also talk about SpaceX and their first earnings report. Amazon with a blockbuster

quarter, but also some higher capex spend. We also have Imperial Oil because this one will be interesting to see how profits are going after a full quarter of the war in the Middle East, the war in Iran. see what kind of impact it's having on the actual business.

Spoiler alert, they're doing pretty well. And then if we have time, we'll finish with intact financial Canada Goose and 5N plus the recent stock that I had on my radar. If you missed it, you can go back to the Monday episode for the four stocks on radar. So that's about it. Big slate, a lot of them on the slate to talk about today. So you want to start us off with good food bankruptcy and actually Shopify if we have time toward the end as well.

Yeah, so I didn't get a lot of time to look into Shopify's quarter. Maybe we can touch base on it again next week. I got kind of the basic numbers. And I think we'll go through these quicker so we can get a little more done because, yeah, there is a ton on the slate. But in terms of good food, it looks like they're filing for bankruptcy. And the company mentions that working capital is declining, which is effectively just the current assets they have compared to the liability. So they're just a sinking ship effectively. and they don't have the capacity to pay the debt.

The company's CEO is resigning after a short six-month tenure, and apparently they've went through a few CEOs over the last few years here, but yeah, this one was pretty short-lived, and they plan to run a sale and investment solicitation process, which pretty much means they're going to see if anybody will step in and buy the company. I don't really see this happening. Pretty much every company in this space is effectively getting wrecked. HelloFresh is still going.

but if you look to a chart of Hello Fresh, they're down around 97 or 98% from highs. I'm not sure what their balance sheet looks like, but it's probably better than good foods. It kind of seems like, because we order this all the time during COVID, it was obviously it was just a thing to do, but it kind of seems like the prices have not budged

in terms of what you can get these boxes for, especially the deals and stuff like that. And when you look to the fact that food costs have effectively gone through the roof over that time frame like it's not it's almost impossible to believe that they're making money on this type of stuff especially at like the discounted prices so well it feels like they're doing a same thing and expecting a different result right it's they're they're giving these massive discounts i think the first order you get like 50% off or whatever you get four meals and then the second one 30% off third 20 last one

10% i think it's some kind of schedule like that yeah and their thinking is that people will stick around after the 10%, but they've been doing this for years now. And we've took, took, taken advantage of it. My wife and I, where we like did the first 350, 40, 30 and then we just kind of stopped it. And I think a lot of people end up doing that and then they wait until they get another deal and then it restarted again. So I think yeah, expecting a different result and doing the same thing, I think was probably their biggest issue. Once you, once you've seen it's not working after a maybe try something different. Yeah, and I think what ends up happening is you get this 50% off,

and their mentality was we'll get people in, they'll see the quality and they'll stick around. But instead, the mentality is for a lot of people, at least from us, is we cannot buy these meals for this cheap. So we'll do it until we don't get that price, and then we'll cancel. So I think it just was kind of the wrong way to go about it. And I kind of row this one out during the pandemic.

I did own it. I think I bought it for like three bucks. a share back in 2020. Obviously stayed bullish a bit too longer than I should have. I should have sold it when it was 14, but I ended up exiting around five bucks a share, I think. Just a tough go for the company, but really not all that surprising. Even if the one thing I will say is even if they do find somebody to buy the company,

common shareholders will probably get nothing. It would all go to people much higher than you on the total poll. Yeah, exactly. That's a difficulty. Yeah, that is going to be. be paid first and shareholders will just get wiped out. So yeah. Yeah.

That's the thing with, you know, owning common stocks you are at the bottom of the totem pole. So there's really no saving it right now. Yeah. Not a good situation for the company. But that's it on that one. In terms of Shopify, again,

I looked at the core numbers, but I didn't get, you know, into the details of the conference call or anything, but it was a massive quarter. Revenue was up 34%. Roast merchandise volume of 32%. Free cash flow margins came in at 18%.

which is 2% more than last year, and I believe ahead of consensus. I think they were only expecting around 16% again. And 68% of gross merchandise volume now runs through Shopify payments. And this is a big bullish sign for Shopify. So the more GMV, which is total dollar volume you're selling, they can root through their own payment system. The more money they're effectively collecting over a third party taking it.

And the best part about all that is the merchant doesn't really feel any. of this because they're paying it anyway, it's just going through a different route. So it's more profit with effectively no impact to the consumer. I don't have the guidance numbers. I quickly glanced at them, but they did, I believe, upgrade guidance on pretty much every front. I think the last quarter, they were like high 20s in terms of revenue growth and they've now upgraded this to a low 30% range. And you can just tell it was a huge quarter just by the reaction of the stock price. I think at one point it was up like 22 or 23%. It's now up around 18.3.

And yeah, it's up. I believe it's about 50% off its lows. And I believe its lows were when it reported last quarter and it reported kind of a so-so quarter. But yeah, it looks like a pretty big one from Shopify. And that's all I got on that front. Okay. Let's move on here with the big announcement with Kustaw saying it will be acquiring

if everything goes well, of course. Zabka Group from. Poland. So that's Poland's largest convenience store operator. It's for approximately $8.6 billion in U.S. dollars and that equity value would be about a 9% premium to the Polish

company. It's traded in Poland. It would be the largest acquisition in Kustal's history and shareholders representing 57% of Zabka have already committed to tender their shares but the transaction still needs regulatory approval

and is expected to close by December of this year. Zabka operates more than 13,000 small convenience stores across Poland and Romania. They average only 700 square feet per store. So that's pretty, that's like a Toronto-sized condo. Yeah, exactly. Yeah. That's a dog-grade condo, actually, maybe a bit bicker, but it's quite small.

It averages 4.3 million daily transactions and has 11.7 million digital users. Zabka uses a franchise model. So it has roughly 11,000 franchises operating the store. That's something that Kustah is used to. They do have some franchises by part of their operations. So it's nothing new. Although the majority of their stores, I think it's about two-thirds are actually corporate owned.

And Zabka generated approximately $7.4 billion in revenue and $1.1 billion in adjusted Iberra and $300 million in net profit over the latest 12 months. And it would increase revenues and net income by roughly 10% for Kustah, obviously, give or take and maybe a percent there. Strategically, it does give them a major growth platform in Central and Eastern Europe, and it reduces its dependence on fuel. The combined company would have roughly 30,000 stores with Europe representing around 60% of the store base now.

and Kushtar expects about $250 million in annual synergies by year three. Now, the biggest risk here is the balance sheet. The transaction is being financed entirely with debt, and that's pushing leverage approximately 3x net debt to EBTA, and Kustah is paying roughly 10 times Zabka's trailing EBTA. So it's not cheap, it's not kind of expensive. There is some growth there, but also for context on the debt side, that would see their debt increase by 50%.

So it is something that obviously Kuchat has an amazing track record for acquisitions, but it would be their biggest acquisition to date and they're attacking on a lot of debt. So it's not without its risk, but they seem, you know, obviously they're not going to say it's not going to be a good acquisition in a news release, but they seem to be pretty bullish on that acquisition. I mean, it's a lot lower than what they were going to pay for seven and I. Obviously not the same size of company, but I think they were going to have to take on like tens of billions of dollars in debt and equity dilution was seven and I. But yeah, it's a pretty interesting acquisition.

I think we talked about Custard's earnings last quarter and I had mentioned that they were scaling back the share buybacks and it just kind of seemed like they were prepping for some sort of deal. They're very good at making acquisitions. This is a large one, but it's not like, it's not like to 7 and I acquisition, which was like dangerously high in terms of price. And if something were to go wrong, it would go very wrong. This one is obviously big, the biggest in their history. But it's an interesting buy. It now kind of shifts because I'm pretty sure the bulk of their operations were in the U.S., but this now is such a big acquisition.

It kind of shifts it to Europe being the kind of the main driver, which is, yeah, a little more diverse. Yeah. It's still, I think the biggest thing to keep in mind is they have a track record, an amazing track record of acquisitions. But the other thing to keep in mind, it doesn't solve the organic merchandise growth. No. Problem that they have. That's still a problem. And there is a little part of me in that worries that they're trying to mask that growth with acquisitions and will make growth look better.

But at the end of the day, you just have to be careful because sure, they may. opening some more stores in Europe under that banner, but at the end of the day, if the same store sales are flat or slightly increasing, but below inflation, you're still looking at kind of some pretty big problems for that company and, you know, going forward if that's the new norm. Yeah, you definitely want to see them growing organically because you don't want them to have to go out and spend 11 billion Canadian dollars to to grow through acquisition. Obviously, you want a combination of both, but, you know, acquisition or sorry, grow through acquisition only, as you can see by this deal is a lot more expensive. So they kind of have to turn that around

internally. And if they do, this will only add as they move forward. Yeah, exactly. Having cash on hand is essential for any business. Traditional business account, hit you with high fees while paying little to no interest on the cash you need for day-to-day operations. That was our experience too, until we switched to the new EQ Bank business account. Now, every dollar earns high interest with no monthly fees and no minimum balance. You also get free everyday transactions like EFTs, bill payments, mobile check deposits, and 50 outgoing and 100 incoming free interrachee transfers. And to sign up, quick and fully online, no branch visits because, let's be honest, no business owner has time for that.

We use it for our own business and it's the first account that actually helps our money work harder while keeping operations simple. Check it out today at EQBank.ca slash business. There is an old saying in investing. It's not about timing the market, but time in the market. The most successful investors aren't usually the ones trying to catch every top and bottom. They're the ones who spend the most time in the market. I've been a quest trade user for over five years, and the reason I stick with them is that they remove the friction of regular investing.

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So the big news, Telis is cutting its dividend, Dan. I think you raised concerns quite a few times on the podcast that that could be coming. And here it is, they cut the dividend by what, 55%? Yeah, it was larger than a lot of, a lot had expected. And I kind of took a flyer out on Tellis. It was probably at the start of 2025 and I ended up selling it. It was in the high teens. So it ended up working out pretty well.

Even when I had bought the company, I figured, you know, it was kind of a coin flip that the dividend would get cut. But as we move forward and forward, it was becoming more and more likely, especially as, you know, the globe and a lot of investors came out and, or sorry, a lot of analysts came out and pretty much advocated for it. But yeah, the dividend is down 55%. It was pretty much a kitchen sink quarter from the new CEO. He's the old CEO from CIBC. So, oh, yeah, that's right. Yeah. And I mean, when you look at this, obviously, this goes without saying yield does not equal return.

There's no sense in obsessing over a high dividend yield if it, if it craters a stock price. And this is pretty much precisely what it did. I mean, Tellis was raising the dividend through all of this. They had like a multi-year dividend growth plan where they would raise it two or three percent every six months. Eventually that's stopped. And, you know, there's a gradual progression that leads towards. a dividend cut. It's usually dividend growth slows, then dividend growth stops, and then the dividend gets cut. The one thing, at least, in my opinion, at least, is I do not believe, because the one

thing I would have said is that the dividend cut was priced in. I don't think the dividend cut is what caused the bombing and share price. I think it was the brutal slashes to guidance. So the company had kind of maintained $2.4 billion in free cash flow guidance by the end of the year and growing at a 10% pace moving forward. So this quarter, they cut it down to 1.8 billion and free cash flow and growing at a 10% pace moving forward. So this is a 25% cut to guidance. And when you do that, the company, or sorry, the market is going to rewrite the company downwards. I'm surprised it actually didn't fall by more than that, considering they slash free cash flow guidance by, you know, 25%. It looks like, what's his name? Victor Dodeg is kind of ripping the bandaid off, getting all the bad

news out early and the recovery is now kind of in his hands. They expect to save around $2.7 billion through the end through to the end of 2028 with the dividend cut because they cut the drip as well so they don't do the dividend reinvestment plan. That's kind of a cheap way for them to get around paying cash to the dividend. They just consistently issue new shares, which eventually dilutes and ultimately requires them to pay more dividends on those new shares. So they should save quite a bit of money. The dividend will now be 40 to 60% of free cash flow out target. I believe their previous guidance under Ent Whistle was 75%. So this is a pretty steep decline in dividend policy. And it's not really all that surprising considering he came from a big bank. They have to be very prudent when it

comes to their payout ratios, their dividends in general. Like you'll rarely ever see the banks, except for some rare circumstances, pay out any more than 50% of their earnings. So not really surprised in this regard. The quarter was just bad overall as well. Revenue was down 1%. earnings down 27%. Churn increased. Mobile ARPU keeps falling.

They only added around 17,000 mobile phone ads, which is horrible. That's what I'm showing here for joint TCI. Just going back to March of 2021, where the average revenue per user for mobile users, which is, by the way, their biggest segment. So they have, of course, they have internet and they have, I think, even TV and connected devices, but still primarily a mobile provider

when you look at their revenue stream. And back in 2021, they were looking at 56.1 for RPU. And it went all the way up to almost 61 in September of 2023. And now it's done pretty much a round trip and is back to March 2021 level. That's despite, you know, likely higher cost that this business is facing. Subscriber counts are what you said, they're declining, I guess, in part. They're not declining.

They're just, yeah, stagnating. Like 17,000 mobile additions for Telas is not very many. It kind of seems like a lot. It's a large number, but it's really not even close to what it used to be. The drop in the bucket. But that, I think it just goes back. We talked about it for all the telcos. It comes back to, you don't have a.

whole lot of population growth and people now more than ever, I think, realize that they can actually shop their plans, especially if they own the phones. And the companies are forced to offer better deals. If not, they lose the user. And you're better off keeping the user at a reduced price than losing them because you're fixed. You have a whole lot of fixed costs when you're a telco. And then this is the kind of thing that happens is the chart, the mountain chart. So it goes up pretty quickly, but down as well. So I think that's just a good visual and explains what kind of headwinds these telcos have been facing. Yeah, and it's kind of hard to imagine a way out. Like, these, these companies just feasted on large immigration and cheap debt, pretty much

coming out of the financial crisis. And they absolutely crushed it until the last few years here. And now they've, they've kind of had their reckoning. They downgraded guidance pretty much across aboard. So revenue is now flat to down 2%. It was 2 to 4% growth. EBDA was low single digit growth. Now they expect 2 to 4% declines. And they mentioned, so previously they had said they'll get to a sub 3x leverage ratio, which would be net debt to EBTA. They said they would get to that. I think it was by the start of 2027 or maybe the end of 2027. And now they're pushing that out to the end of 2028. And the worst part is they mentioned that the second half. half of the year is going to be worse than the first half.

They asked, they asked Dodeg if another dividend cut was possible. And he said they kind of made sure to cut to an appropriate level. So it's, it's once and done. However, right now, they're, they're pretty much hovering around their new top end of free cash flow range. So if it gets any worse, it is not impossible that we would see a second cut. I highly doubt it, but it's not impossible. I mean, at this point in time, BC, BC, Intelis have, as I had mentioned, kind of had their

reckoning. I don't really expect Rogers to primarily because Rogers doesn't really care about the dividend coverage ratios are pretty solid because I don't think they've grown it since 2019. They're more so focused on buying sports team. So yeah. Yeah, exactly. I mean, my main question here, because when I own TELUS, I kind of took the the guidance at face value, but I mean, now that you have somebody else at the helm, like, what were they thinking in regards to this guidance? It was pretty, it was pretty clear now that you see these new targets, the new leverage ratio is being pushed out like multiple years. Like they had zero chance. They were hitting this guidance. I'm not saying it was obvious in a no-brainer either. Like I said, I kind of took it at face value. But yeah,

he came in pretty much cut everything down to rock bottom expectations, I would say, and now you get a re-rating of the stock. Only one way to go by that up, right? That's probably what they're betting on. And I think it's just a reminder. For those who love to invest in dividends, I think it's great. But you have to be careful investing in companies that investors are just looking at them solely for the dividend or the dividend yield is very high or the company relies on that to attract investors. When you start looking at those payout ratios and if they start not making sense or being elevated, even though the company could have years, decades of track record, that's when the warning bells should go off. So investing in dividend, look, it's fine. I prefer going the total returns route.

But again, I can make some really solid argument, especially from a psychological standpoint because you get paid even if there's a market downturn. So I totally get that. But you also have to make sure that the dividend stocks that you own are actually saved dividend stocks. And you can't just look at it, you know, in a vacuum one year. You have to stay on top of it, which would have been easy to do for a telecony. our bills. So I think it's just a reminder for a dividend investor. Just know what you own because sometimes you might think something is a blue chip. It'll never cut and then you get something like this. Yeah. Yeah. I mean, in my sake, like I knew the payout ratios were a bit suspect on a

trailing basis, but, you know, according to their guidance, they had mentioned that the dividend will be covered by 2027. So again, I kind of took him at face value on that. I'm sure a lot of retail investors did and now they're they're kind of sitting here with a you know their income's been cut in half and because they reduce guidance the stock is also taken a absolute beating but yeah we'll see how they do bc cut and really didn't i don't think they've reacted very well to it at all i think they had a short pop right off the bat but they've effectively gone nowhere i don't really know where tell us goes from here on out but i do not plan to get back into the space anytime soon i will say that. Okay. Well, speaking of space, SpaceX came out with its first ever public earnings report. Revenues

were up 92%. Net loss was about half of what it was last year. And the spec segment, so I'll give just a quick overview of how each segment did. So the space segments, so think about the rocket launches here. So launches were down 17% year. Space revenue was up 29% to just shy of a billion dollars. the segment loss, 542 million. That was up from a loss of $369 million last year. It was interesting, though, on the call, they said that Elon actually said, like, they encourage competition. Like, they encourage other companies to compete with them.

They don't use patents to protect their business because they said, look, it's hard to launch stuff into space. And they encourage competition, I guess. And I think he was actually being genuine with that, because. I think Elon goals are definitely for humanity to travel into space. And if more competition means that this will be done faster, I think he welcomes that. So that's just my interpretation of it. I think he doesn't, obviously it's easy to say, doesn't care about money when you're richest man than the world on paper. That's exactly what I was going to say. But I don't think

he really cares about it all that much if I'm being perfectly honest. But, you know, I guess you get to some certain amount of money, you know, after a few billion, I think you're, you're, you're okay. It's hard to tell what's going on in his head. Exactly. So Starlink, Starlink is the, definitely the brightest spot in terms of it's the only profitable part of the business. Revenues were up 65% to $4.3 billion. Income from operations were up 79%, so very profitable business there. On the AI side, that's where the loss are getting steeper and steeper. So revenues more than triple to $2.6 billion. The segment lost $1.3 billion, less than the $1.5 billion. It did last year, but AI CAPEX more than double versus Q1, so not even year over year the

previous quarter. It hit 15.9 billion. And so far this year, AI CAPX has 7X compared to last year. But this is just AI CAPX, right? So if you're looking at the whole business, capital expenditures have increased four times compared to last year for the first six months. It's gone from $7 billion to $28 billion. They mentioned a few interesting things on the call in terms of the business.

First, they expect ARR, so annual recurring revenue of $100 billion by December of this year. So that would be quite defeat its ambition, but they believe it's achievable once the cursor acquisition is completed. Cursor was announced, I think, well, maybe a month or month and a half ago, I don't remember exactly, but it's an AI-powered coding platform that helps developers right, understand, and fix software using natural language instructions. And they also talk about Starlink V3. They're currently on V2.

They think it will help to boost sales significantly. They believe it will capture a majority of the internet traffic worldwide in the next 10 years. So we'll have to see. I just did a little bit of research kind of comparing. Apparently it's going to be much more comparable in terms of speed compared to fiber. Because right now Starlink is quite good, especially if you're in areas that fiber is just is not. available. But when I was looking for, you know, getting a better price on my internet, I looked as Starling as a possible option. And from what I saw, it wasn't even close. A good fiber

connection is still much better than Starlink. So we'll have to see. But if it does really improve on that, yeah, speed, it could become more competitive even in more urban markets. Yeah, I know most of the people I know who use Starlink are kind of rural area where they really You can't get fast internet speeds and it's a huge advantage there, especially for the, even for the upfront cost. You got to lay out. But this one, how did it do after earnings? I think it was not doing very well.

Oh, it's down 11% today. Yeah. Or 13. Okay. It's getting worse as it takes. So yeah, it's down around 34% since it's IPO. Yeah, but you have to keep in mind to, I think what, wasn't the IPO price 135? I believe it was in the 130 range and then it opened at like 160.

So the IPO price, I think it was 135. And you have to keep in mind, we've talked about it before, but the, I believe the share unlock is going to be tomorrow. So we're recording this on Wednesday around 2, 3 p.m. Eastern time. And I believe the share, the first tranche of share unlock is happening tomorrow, August 6th. So it could definitely put some downward pressure on the stock. as more, they're going from 5% to I believe around 20% of shares that will now be available for trading. Doesn't mean that everyone that has new shares on lock will be selling them,

but there is the possibility of a lot more selling pressure. So keep that in mind. But overall, interesting quarter, it's not a company like quickly before we go to Amazon that I would never buy. I think if it gets cheap enough, it'll probably still be expensive. but if it goes down like half in price from here or more, I'd probably consider it as like just one or two percent allocation just as a more like future, just kind of bet on the whole space exploration part of the business

and just see how it does. I would not put a whole lot of money into it, but again, I've said it time and time again, it's hard to bet against Elon. It's just even if you think Elon can do a lot of big things, just evaluation and IPO that was pretty crazy though yeah yeah there's a lot of IPOs you would have had a ton of success if you had just kind of weighted it out i mean facebook would have been one they kind of bombed after they IPOed and then uh i mean look at it now it the difficulty is if you bought

this thing through well symbols IPO you're you're down a bit and now you're probably still locked up yeah so you can't sell it or else you won't be able to buy any other one so there's a lot of fear there if it goes any lower like how much are you going to lose but on the flip side i don't know a lot of people who got a lot of dollar value or dollar volume in this appeal because it was so popular so they probably bought it at an even higher price when it actually was trading so that's the issue right like pretty much anyone like everyone who's bought SpaceX right now once since it's been public is down like that's the reality so yeah some people are down more than 50% if they bought at the peak so keep that in mind, buyer beware. We talked about it before the IPO that tends to do, you know,

IPOs tend to not do all that well, especially the hyped up one in the next couple of years. So just something to keep in mind. Having cash on hand is essential for any business. Traditional business accounts hit you with high fees while paying little to no interest on the cash you need for day-to-day operations. That was our experience too. Until we, we switch to the new EQ bank business account. Now, every dollar earns high interest with no monthly fees and no minimum balance. You also get free everyday transactions like EFTs, bill payments, mobile check deposits, and 50 outgoing and 100 incoming free interackey transfers.

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open and fund your account with code TCI and receive $50. Conditions apply. So now let's move on to Amazon here. Yeah, so I would say they reported probably the best quarter out of the mag seven and and it's been a while since amazon's posted like a blowout quarter and this one was up huge post earnings i think it was something like 15 or 16 percent and i don't know how much it's down today but if i i did my notes yesterday i looked over the last week and it was up over around 25 percent since those earnings yeah so it's it's still had a heck of a week so revenue was up 20 percent operating income up 43 percent a w s revenue up 37 percent and And also some of the fastest growth in AWS in nearly five years.

And the advertising revenue side kind of continues to grow as well up 26%. AWS margins are approaching 40%. And the segments operating income was actually up 63%. You know, as this segment of the business just continues to dump more and more into the build-out, profit. Profitability is actually expanding, which is kind of a huge positive. Backlock now just shy of $500 billion. And it is effectively two and a half. next since last year.

I don't know if fiscal keeps the backlog. Do they have the backlog of Amazon? I can bring it up while you keep. Yeah. So backlog is up a ton. And I think the main thing here and why not all hyperscalor spending is the same is Amazon is mostly spending on contracted future work while something like meta is kind of spending for internal indirect methods of return, I guess you could say.

Like I could be wrong on that, but I do believe that like meta's spending is more so to increase the platform. Let's just say efficiency of its advertising, things like that. Like I don't think they sell any compute. I mean, they're not sure on what they're doing meta. So that's essentially what the call was. So they're not sure whether they want to keep some of the compute capacity for their own usage to make the business better to potentially develop tools that will be useful to them and that they can sell. Or if they want to sell of the compute capacity to. and potential buyers, like, you didn't name them, but like open AIs or antropics of this world,

that would need the additional compute capacity. So they, that was one of the criticism for them is they're not quite sure which direction they're doing. And I guess an Amazon is more sure. Yeah. And that's kind of what I mean by not all the spending is the same. And I mean, don't get me wrong. I'm not saying meta spending is bad and Amazon's is good.

But at this point in time, I would just say the market probably likes Amazon's more because it's more quantifiable, I guess you could say, whereas, you know, even somebody like Alphabet, who kind of said, like, they don't know what the return will be on that spend. Amazon is a bit more upfront in terms of, you know, what they're spending it on, what it's going to go to, and the returns, they'll likely expect to see from it. They'd give an RIC or no? Not a direct RIC. They just use, like, qualitative words, I would assume, right?

It's kind of coming out in the realm of a lot of growth in terms of AWS, things like that. So it's it's just more you can see the results right now. Whereas meta, I think, you know, just with them being uncertain, the market's probably reacting a little bit negatively. Like, meta's spending could end up being genius five years from now. But right now it's just a little more, you know, there's a little more clarity as to where Amazon's is going. Same with any of the other hyperscalers. Free Cash will came in negative. It's probably going to be, well, I don't want to say all hyperscalers, but some of them, Alphabet being one of them.

It's probably going to be a recurring trend across a lot of these companies. The wild thing is operating cash flow increased nearly 35%. So like you have these huge increases in operating cash flow and they still can't stay profitable on a free cash flow basis. They're spending so much. They mentioned on the call that even with 220 billion worth of spending, they will not have the capacity to keep up in 2027. So 2027 capacity is all gone and 2028 is starting to fill up. They mentioned that they haven't done anything yet, but they're having conversations with companies about potentially buying their tranium chips.

These are all used internally right now. If it does, you kind of have a brand new addressable market, which pretty much targets NVIDIA. I guess I would say I'm not an expert on the chip area, but I would imagine that would be kind of the customer base they would be going after. They also mentioned that a lot of its AI workloads are tracking ahead of schedule in terms of margins. It was kind of an interesting conference call.

They seemed to be, again, as I mentioned, a bit more bullish and comfortable in saying how positively it's going versus Alphabet is kind of saying they don't know what the end result will be. They didn't put any absolute numbers on it, but they're clearly bullish on the future. They're guiding to yet another 30 to 50% growth quarter next quarter in terms of operating income. And it's kind of funny, like you sit through an Amazon quarterly report now and it's pretty hard to look away from Amazon Web service.

the advertising, all that type of stuff. But this is still the largest retailer in the world. I mean, I guess Walmart would be bigger as a pure retailer, but nobody really pays attention to the retail segment anymore. It's all this side because, yeah. Yeah. And I know they had mentioned that the KPEX targets are bumping from 200 to 220, and I think they mentioned that all of that is coming from increase in memory prices.

So we've been talking about that for quite a while. memory is a is a hot commodity right now and since 2020 AWS is compounded revenue at around a 22% clip while the online stores has been around 6.3% so I did some quick math well I didn't do the math I threw it in Gemini but these paces are kept AWS will be the largest revenue generator of the business by 2031 so you're talking like five years and you've got one of the largest retailers on the planet like I said with a massive retail exposure where AWS could eclipse that in the next half decade. And if it continues to accelerate growth, it could be even before that period, which I would

not doubt it's going to do. I mean, if you don't get AWS accelerating in terms of revenue growth with all this spending, you probably got issues. But yeah, it was a very good quarter. The market liked Amazon's quarter for the first time in a while, I think. Okay. Yeah, so let's move on here to Imperial Oil. So completely different business.

But like I mentioned in the intro, I think it's pretty interesting to see what's happening over there. Just to see, like, you know, how are these Canadian oil companies going to fare this quarter with the first full quarter since the war in Iran started? Because if we remember, the end, like, Q1 would have been just one month worth. And then you had, like, full three months. So I think it'll be interesting. And we're also already getting a glimp here with imperial oil. So the price of oil has been pretty elevated during most of the quarter. WETI was above $80 a barrel for most of the period and above $90 for a big chunk of it,

even hit above $100 quite a few times. Of course, I know it's not the same pricing that's used in Western Canada, the Western Canadian select, but it's still usually a discount off of WETI. So WTO is a good just benchmark to show, okay, it's rising. So of course, WCS will rise as well. head income was more than doubled year over year and quarter over quartered hit 2.2 billion was the highest profit for a quarter since Q2 of 2022. Same thing for free cash flow. So the last time they generated that much free cash. I think was Q4 of 2022. They now have over $2.8 billion in cash on the

balance sheet, although debt hasn't really move all that much, but they did have some production issues during the quarter, which led them to say that their full year production guidance will be on the low end of the 2026. So that's not great for an oil producer is you definitely, you know, you want to see more production because that is one of the things you control, whereas the price don't really have any control over it. So that is not great. But they renewed their share repurchase program for another 12 months that would allow them

to buy back up to 5% of the outstanding shares. And the dividend wasn't increased, but they said they were. remain committed to return surplus cash to shareholders in the form of dividends and buyback. So if Imperial Oil is any indication, Canadian natural resources, Uncor, Sanovas, you name it, they should have some pretty strong quarters coming out, not that it comes at a big surprise giving to where the price of oil was at. Yeah, I mean, these oil companies print money they have for quite a while, especially at 80 plus dollars in terms of oil,

but just chronic underinvestment in them. I guess he would say for a very long time. I mean, most of them trade at free cash flow multiples that are what 10, 12x. They might be a bit more now, but yeah, these companies are top tier. All of them, I guess I would say Imperial CNQ and Suncor, but they're generally going to follow the price of oil.

If oil goes down, no matter how much money they're printing it, They generally go down. The market probably would have priced this into the stock well before it hit because when oil sits at 100 a barrel, they know Imperial is going to come out with a massive quarter, which, yeah, it did. Yeah, I'm just looking here. I'm just kind of curious. So if you held in the last five years, if you held the Imperial oil, you would have made 493% on your money total returns. Canadian natural resources, 309%.

and if you held the S&P 500, just looking here, you would have had 86.8% total returns in the last five years. So you could have done worse, and it's looking pretty good. Like if you look three years, three years is where like the S&P 500 is close to matching Canadian national resources. And then one year, obviously, they've crushed it. So you could have done a whole lot worse than owning Canadian oil company over the last little while. Yeah, the only difficult. is back when oil crashed in 2014, if you held them for six, seven years then, I think Imperial was down like close to 80% off those highs in 2014. It's just a wild industry to invest in,

but they're all high quality companies for sure. Yeah, exactly. I think the underinvestment we've seen over the last, what, decade and a half, I think we'll make these some pretty compelling investment going forward. So that's why I have a pretty sizable position in Canadian natural sources, Suncor and Sonovus, about 10% total, all three. I'm, you know, I'm putting my money where my beliefs are. Maybe I'll be wrong, but we'll have to see. So did you want to go over? We're pushing on time a little bit. So should we keep intact maybe for the next time? And I can go over quickly Canada Goose and 5N plus. Yeah. Yeah, let's do that. Okay. So Canada Goose. This one is a company we haven't talked about in quite some time. The stock is down more than

30% year to date. And the revenues increased 9% year over year with strong growth in the oil wholesale segment, which increased 65%. China was definitely the highlight here of the results. And I'm just trying to pull this up here. So yeah, it was the highlight of the result with sales up 44% followed by 24% growth for the rest of Asia Pacific region. Now, the problem is no. North America, more specifically the U.S. Like, it's a big problem. Sales in the U.S. actually declined 19% from last year. Granted, it's not their biggest quarter. Obviously, it's more of a company that will sell a whole lot in Q3 and Q4, and I guess Q1 a little bit as well. But U.S. sales actually declined with Canada now surpassing U.S. cells, which is not good.

This is not good. So it's overall, they said they made. progress with their product diversification. They're trying to make a push and making it a more year-round lifestyle brands. I guess that makes sense with opening a store in Hawaii. Remember when we had done it a while back and they're like, oh yeah, we open a store in Hawaii. Maybe they're trying to sell some of those year-round product. They did reaffirm their guidance this quarter, saying that revenues would grow in the low single digits for the year. But definitely a company that has been on a harder time. I always thought it was a strong brand, but I don't know, maybe not all that much. Maybe the products are too expensive. I'm not quite sure here what the issue is. But yeah,

we'll have to see. It's, yeah, it has been better. I guess people are pinching their wallet a bit more. It only has a 1.2 billion market cap now. Yeah. In Canadian dollars. Yeah. Because when this one IPOed, because I owned it shortly after it IPOed, is a huge brand. And one of fastest growing too and then it just fell off a cliff like i don't see anybody with the jackets anymore and 10 years ago well yeah it's summer then well of course gets pretty cold here though i don't even see anybody with them in the winter yeah um yeah i see i see people i mean i i think maybe they're a victim that their jackets are too good quality and they're expensive so people buy them and keep them for like 10 years right they're not changing every other year yeah oh yeah

you're not going out and buying a new well i guess you could if you had enough money, but a $1,400 jacket every winner. Yeah, it's been a tough fall for them. They were, they had a lot of promise back when they first IPOed. And it just shows you how volatile these, these fashion brands are. If the brand falls out, it's over for these companies. And yeah, you're looking at, is that since the IPO? So it's down 41% since the IPO. And at one point, it was up three or 400% I think. Yeah, and it's down like 75%. I think in the last five years. Yeah, 76%.

So it's been a rough go. I mean, I wouldn't be surprised if they'd be an acquisition target at this price. I mean, you'd have to think so. Even like a PE firm, like it's, there's still like some pretty good brand recognition. And at this price, it's, it's pretty cheap. An EV of a $1.9 billion. So I don't know. Or luxury brands.

Yeah, that I would. 12 and a half free cash flow. Yeah. It's pretty cheap. It's not, not expensive. But let's move on here. here to the company that I actually, like I mentioned earlier, we talked on our four star stocks on our radar, which is five in plus ink. So it's funny that I talked about it earlier

this week and they just came out with their earnings. I think it was actually on Monday. So Monday because it's not a stat holiday in Quebec. So I guess that would make sense that they would release their earnings on Monday. And if you missed it, like I said, go back to Monday's episode. I did a deeper dive into it. It's also posted on YouTube. So if you wanted to see some visuals there. On the surface, it seemed like a good quarter, but the stock was down as much as 15% on Tuesday, the day after the earnings release, but revenues were up 28%, earnings up 29%. They saw strong demand for specialty semiconductor segment with strength in the terrestrial renewable power and space solar power. The reason the stock was down was really because they

experienced some operational challenges with unplanned equipment maintenance and suboptimal operation. as well as higher input costs. So these was kind of the trifecta. The suboptimal operation is always a good one here. Yeah. But that's weird. Yeah, but because of the margins, because of that, of course, margin took a hit for the quarter,

but they set on the call, they expect these challenges to be temporary, or if you want to use Jerome Powell term, transit, transitory. Transitory. Transitory. The word of the 2021, 2021, 2022. On the bright side,

they have 420 million worth of backlog, which represents pretty much a full year revenue for them. They said that their capacity is fully sold for the rest of 26 and 2027. They reduced their debt significantly as well compared to last year and the prior quarter. And they did reaffirm their guidance for the full year. So not overall, I mean not a bad quarter. I would say aside from those operational challenges, if you're looking at the past month here,

the stock is down like 30% and it's still up for a year to do. date, so 66%. So it's down quite a bit in the last month, but I think the valuation is becoming a little more attractive, but still not cheap. You're looking at P of 29 and a price of free cash around the same around 30. So not cheap, but again, if you think this is a company like I mentioned in Monday that could be strategic from a national kind of security or national independence, whatever you want to call that term, perspective, then it could be a potentially intriguing play for years to come. Yeah, I think a lot of these quarters, when they say some short-term operational issues,

the market will generally dump them. And I'm not saying this will be an opportunity. But if it does end up being short-term issues, it generally rebounds in the future. I mean, you looked at dollarama when we used to cover them. And then they kind of blamed the bad quarter on the weather, which was really, really weird. But it ended up being the next quarter they came out, said the issues. were resolved and I made fun of them so I yeah my words afterwards yeah yeah so there is opportunity sometimes when this absence is just when you get suboptimal conditions that exist for a long time

that my defense whether it was actually weather related or it's just them using it as an excuse and then the next quarter was better like who knows but yeah you never know you never know but yeah i think that wraps it up for today we had a lot to go through we went a bit faster just because we wanted to go through as much as we could. Hopefully you enjoyed it. It's still the thick of earnings. I think we'll have more than enough to talk about probably for the next two, three weeks. So it's always fun. Lots of easy content to do for the podcast. So we really appreciate you listening to the podcast as we've been doing the Monday episodes, not this one, is available on YouTube. It was just posted Tuesday because I was coming back from a trip. So please forgive me for that, but it is available Monday's episode now on

YouTube. We'll be doing every Monday episode and maybe eventually we'll do the Thursday as one, maybe with a little bit of a delay. But hopefully you're enjoying that. Subscribe to our YouTube if you haven't done so. Dan Foch and I will be doing the Thursday live now. I think we'll be doing them on Thursday. That was a better turn now. I think it's just easier in this summer for people to tune in on Thursday. So we'll be doing that today if you're listening to this on Thursday morning. So make sure you tune in. If not, thank you for the sport. And we will be back. next Monday for a regular episode. The Canadian Investor podcast should not be construed as investment or financial advice.

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