Analyst Video Conferences and Webinars

---

---

2023 Webinars and Video Replays

 

October 12. 2023
Value in Energy - Video with Darryl McCoubrey and Dan Fong

In this webinar, Darryl McCoubrey, our Head of Research and Utilities and Infrastructure Analyst, and Dan Fong, our Senior Investment Analyst, Diversified Industrials & Energy, provide specific risks and catalysts for stocks in their sectors, as well as broader perspectives on energy markets.
Utilities and Infrastructure:
•  Overall risk profiles for the three groups in Darry's sector: Regulated Utilities, Pipelines and Power.
•  Regulated Utilities: ATCO Ltd., Canadian Utilities Ltd., Emera Inc., Fortis Inc. and Hydro One Ltd. cash flow and debt metrics using Veritas adjusted calculations to normalize comparisons across the group. Why Fortis and Hydro One are on our Veritas V-List.
•  Pipelines: Enbridge Inc. and TC Energy Corp. normalized cash flow and debt metrics versus Pembina Pipeline Corp., as well as growth prospects. Why Enbridge is on our V-List and why TC Energy is a BUY.
•  Power: Capital Power Corp. and TransAlta Corp. normalized cash flow and debt metrics, as well as growth prospects. Why both are on our V-List.
Oil & Gas:
•  Oil prices and capital spending trends: High oil prices have not been matched by a flood of capital in this cycle. Cash flows are going into debt reduction and shareholder returns.
•  Constraints on supply support a higher price cycle: The current cycle is likely to oscillate within a higher range than in the past.
•  Global oil supply-demand dynamics: Physical supply and demand dynamics point to a global crude deficit; however, net positions in futures contracts are moving into an overbought condition.
•   Pressure on heavy differentials eased as extraordinary Strategic Petroleum Reserve releases concluded: Why the outlook is positive for differentials.
•   Will crack spreads crack? Refining margins remain well above historical ranges and why we have a constructive outlook.
•   Specific oil stocks: Amongst Suncor Energy Inc., Canadian Natural Resources Ltd., Cenovus Energy Inc. and Imperial Oil Ltd., which ones stand to benefit most from relative commodity exposures. Specific investment theses for each stock.
•   Natural gas market dynamics: Signs of slowing growth from shales.
•   Key demand drivers: Electricity generation and industrial (domestic), LNG (global). Renewables plus battery solutions are almost four times the cost of natural gas.
•   Gas Kings of the North: Why ARC Resources Ltd. and Tourmaline Oil Corp. are both well positioned to benefit from the macro setup.

September 29, 2023
Veritas Best Ideas: Inflation Up. Interest Rates Up. Markets Up. Now What? - Video

•   Darryl McCoubrey, Head of Research, Utilities & Infrastructure.
•   Dan Fong, Diversified Industrials & Energy: Different Strokes for Different Folks.
•   Desmond Lau, Communication Services & Information Technology.
•   Brent Levenstadt, Accounting & Special Situations.
•   Kathleen Wong, Consumer Staples & Consumer Discretionary.
•   Martin Pradier, Materials.
•   Nigel D'Souza, Financial Services.
•   Shalabh Garg, REITs & Financial Services: Recycling Capital for Growth.
•   Dimitry Khmelnitsky, Head of Accounting & Special Situations.

July 12, 2023
AltaGas: From Risk to Riches - Webinar With Benjamin Butler

In this five-minute video, Ben summarizes his investment thesis on AltaGas Ltd. (TSX: ALA), which he initiated coverage on last month. He sees ALA as an attractive investment opportunity primarily due to the following: 
•   Valuation is deeply discounted to fundamentals;
•   Inherent competitive advantages that are difficult to replicate;
•   Anticipated shift in capital allocation.

June 28, 2023
Copper Outlook: Pain Before Gain - Webinar With Martin Pradier

In this webinar, Martin outlines the key reasons why he expects a copper surplus for the next two to three years, leading to lacklustre prices. Highlights:
•   China’s real estate completions drive copper prices: Weakness in new house initiations in 2022-2023 will impact copper demand 2024-2025.
•   Understanding historic copper consumption: All the growth in copper consumption has come from China over the last 26 years.
•   China’s copper consumption is slowing down despite leading in electric vehicle, solar panel, and wind turbine production.
•   There are significant supply additions in the next 2-3 years.

June 15, 2023
ABCs of ROIC: It's All About the Benjamin$ - Webinar with Desmond Lau

Executive compensation plans play an important role in determining shareholder returns. But unfortunately, there are no easy ways to screen for effective ones. Even when exec comp is based on the right metrics, sometimes implementation creates flaws.
In this Accounting Teach-In webinar, Desmond sifts through the fine print of various executive compensation plans to look at what works and doesn't.
Highlights:
•   Why Rogers Communications Inc.’s poor incremental wireless ROIC seems to come down to a misaligned/frequently changing incentive structure (and ownership); 
•   Why Cogeco Communications Inc.'s Economic Value Creation metric shows 220% value creation over the past decade, but the shares are only up ~80% during the same period; 
•   Why AT&T's bastardized adoption of ROIC represents an extremely low hurdle that has led to 10 years of destruction to shareholder value;
•   How Constellation Software Inc.'s thoughtful and aligned incentive plans have resulted in 16 years of 25%+ ROIC;
•   What TransDigm Group Inc. (NYSE: TDG) and Markel Group Inc. (NYSE: MKL) get very right with their compensation plans. 

See also the slides from the webinar.

May 17, 2023
Leveling the Field: Oil Sands Cash Flows in Focus - Webinar with Dan Fong

As the oil sands majors pay down debt and focus on shareholder returns, free cash flow is more important than ever. But most oil & gas companies report cash flow metrics that exclude expenses that we consider to be normal costs of doing business. In this webinar, Dan covered:
•   Definitions of reported cash flow metrics vary: O&G cash flow metrics often exclude normal costs of doing business, such as leases, asset retirement obligations and stock-based compensation.
•   IFRS 16: How leases affect the balance sheet, income statement and cash flow statement.
•   Asset retirement obligations: Not undertaking AROs can jeopardize an O&G company's status as a going concern.
•   Stock-based compensation: Despite being non-cash in nature, SBC is a normal cost of doing business.
•   Reconciling Oil Sands' Adjusted Funds Flows and Free Cash Flows for comparability: Reported metrics versus Veritas calculations for each of the oil sands majors (Canadian Natural Resources, Cenovus, Imperial Oil, Suncor), as well as a selection of other large-cap Canadian energy companies (Crescent Point, Enerplus, MEG Energy, Vermillion).

See also the slides from the webinar.

---

April 26, 2023
Gold and Streamers: Highlights of Our Initiations (FNV and WPM) - Webinar with Martin Pradier

In this webinar, Martin discusses some of the main points of his recent initiations of coverage on Wheaton Precious Metals Corp. (WPM) and Franco-Nevada Corp. (FNV). Discussion points: 
•   Streamers have outperformed gold miners.
•   Advantages streamers have vs. bullion and miners: Cost increases have been a big problem for miners.
•   WPM's growth profile versus declining volumes at FNV due to contracts: If gold rises 50%, then WPM's EBITDA would increase 65% vs. 35%-40% at FNV.
•   Historic valuation of WPM and FNV.

See also the slides from the webinar.

---

March 21, 2023
Canadian Banks: Evaluating Earnings Quality - Webinar with Nigel D'Souza

In this 1-hour webinar, Nigel reviews the disclosure practices of the Big Six Canadian banks, looking at each one for consistency, clarity, and comparability of non-GAAP EPS, business segments, loan balances, unrealized losses on debt securities, net interest margins, fund transfer pricing and provisions for credit losses. At the end of the webinar, Nigel walked through an example of a low-quality consensus earnings beat and then took about 15 minutes of questions.

See also the slides from the webinar.

---

March 21, 2023
Why We Still Prefer CPKC over CNR - Webinar with Dan Fong

In this 3-minute webinar, Dan updates his view on why he still prefers Canadian Pacific Railway Ltd. over Canadian National Railway Co. after the merger with Kansas City Southern Railway was approved.  Main points:
•   CPKC possess unique upside potential;
•   CPKC has more defensive freight exposure;
•   The regulatory environment appears to favour CPKC.

See also the slides from the webinar.

---

March 14, 2023
Element Fleet Financial: Hitting a Temporary Plateau - Webinar with Shalabh Garg

In this five-minute webinar, Shalabh goes through what allowed Element Fleet Management (TSX: EFN) to post a stellar year in 2022, and why he sees earnings plateauing in 2023, but regaining double-digit growth in 2024. He sees a regain in momentum in 2024 due to the following:
•   Higher rental revenue from higher vehicles under management;
•   Higher syndication revenue;
•   Operating margin expansion; 
•   Lower preferred share dividend outflows and;
•   Renewed share buybacks.

---

February 1, 2023
Constellation Software Inc: Illuminating Lumine - Webinar with Desmond Lau

Desmond hosted a webinar on February 1, 2023, to discuss Constellation Software Inc.'s spin-off of Lumine. He aimed to answer two main questions: (1) How much value can spin-offs create? and (2) Should you buy the Lumine spin?
His analysis also included:
•   Biggest challenges of value creation: What three factors make it difficult to realize significant value with CSU's spin-offs?
•   Is WideOrbit an attractive purchase for Lumine? Lumine is acquiring WideOrbit and the combined entity will be spun off. Why does Lumine's purchase of WideOrbit only look like a 7.5% IRR deal if we assume the status quo? What Lumine can do to increase the unlevered return?
•   Similarity of Lumine to CSU: Level of Lumine's FCF deployment on acquisitions, organic growth, acquisition multiples and overall ROIC.
•   Buy or pass? What price would we be interested in Lumine and what price would it likely be too expensive?

Please also see the slides from the webinar.

 

---

January 18, 2023
Veritas Best Ideas for 2023: Bracing for Impact - Video

We held a webinar on our Veritas Best Ideas for 2023: Bracing for Impact. Our Best Ideas are centred around finding companies with sustainable cash flows and low balance sheet leverage in a time when inflation may be persistent, consumers are dealing with the shock of drastically higher rates, and a recession is likely. We think 2023 will be a year when stock picking is in vogue.

See also the slides from the webinar.

---

---

2022 Webinars and Video Replays

December 23, 2022
Consumers Caught in a Vice - With Anthony Scilipoti

On a wintry day, on the last day before the holiday break, Anthony discusses the outlook for the North American consumer heading into 2023. This three-minute video outlines the pressure on Canadian and U.S. households in an environment of violently changing interest rates and high indebtedness. 
Anthony measured the U.S. Household Debt to GDP versus the YoY Rate of Change of the Effective Fed Funds Rate going back to 1955. He compares it to Canadian Household Debt to GDP versus the YoY Rate of Change for the Bank of Canada policy rate.
While the U.S. Fed Funds rate of change has been more dramatic, Canadian consumers are getting squeezed harder because of their relatively higher indebtedness. He also quickly outlines what this means for Canadian markets in 2023.

The One Thing is an occasional quick-hit video segment in which we will present one idea, trend or data point that we believe investors should consider or may be overlooking. 

---

December 14, 2022
Who's Right: The Bond Market or the Real Estate Market? - With Anthony Scilipoti

In this three-minute video, Anthony discusses the battle being drawn between the Canadian housing market and the five-year Government of Canada bond yield. Right now, house prices seem to be absorbing the punches. But for how long? The long-term trend analysis suggests the blow could be severe. Ultimately, unemployment is the key driver to watch.

The One Thing is an occasional quick-hit video segment in which we will present one idea, trend or data point that we believe investors should consider or may be overlooking. 

---

November 30, 2022
Barrick Trumps Newmont on Fundamentals and Valuation - Video with Martin Pradier

In this 13-minute video, Martin compares Barrick Gold Corp. to Newmont Corp. First, he goes through their similarities and differences in operations, assets and shareholder returns. He then explains why he likes Barrick over Newmont, including:
•   More reserves and reserves with higher gold grades;
•   Stronger earnings and stronger profitability per ounce produced;
•   A better balance sheet with lower net debt;

See also the slides from his presentation.

---

November 30, 2022
Encouraging Signs for Gold - Video with Martin Pradier

In this 5-minute video, Martin says he sees some encouraging signs that the U.S. dollar is stabilizing versus other major currencies, which is needed before we will see meaningful increases in gold prices. These encouraging signs include:
•   U.S. Federal Reserve is signalling lower rate increases going forward, as inflation has peaked and is declining.
•   Europe is increasing interest rates, reducing the rates differential with the U.S. and strengthening its currency.
•   Japan intervening in currency markets to support Yen and suffering the highest inflation in 40 years (3.7% last month vs 0.1% last year).

Please also see the slides from his presentation.

---

November 23, 2022
Algonquin Power: Recapitalization Risk Threatens the Dividend - With Darryl McCoubrey

We had several inbound calls about Algonquin Power and Utilities Corp. after it fell ~30% earlier this month on a guidance warning. Although Darryl doesn't rate the stock, he is familiar with the company as part of his peer analysis and did some extra research on this name, which he shares in this video.
He identified factors threatening Algonquin's equity value and dividend, including:
•   Liberty Utilities returns falling on rising rate base;
•   History of output underperforming Long-Term Averages with price volatility in the Power segment;
•   Debt service metrics deteriorate, with AQN FFO-to-Debt well below the 12% typical utility target;
•   Funding risk compounded by Kentucky Power transaction and its US$1.5 billion funding commitment;
•   Timing pressure from the January 2023 Kentucky Power target close date suggests a discounted bought equity deal is plausible in the coming weeks.
Equity dilution and de-leveraging suggest the dividend could be cut by 30% or more. He thinks there are better opportunities elsewhere with less risk.

---

September 22, 2022
Fertilizers: A Market Disrupted by War - Webinar with Martin Pradier

In this 12-minute video, Martin explains why he thinks potash and nitrogen prices will stay elevated. He covers:
•   Market disruption: Ukraine and Belarus exports are down, crop inventories are low, and drought;
•   Nutrien shareholder returns: He forecasts that free cash flow in the next two years will be about 35% of the company's value;
•   Catalysts: Renegotiation of potash contracts with China and India, escalation of European gas shortages, and high fertilizers and crop prices.

Please also see the slides from the webinar.

---

September 16, 2022
Housing Sentiment Explained - With Anthony Scilipoti

The One Thing is a quick-hit video segment in which we will present to our clients one idea, trend or data point that we believe investors should consider or may be overlooking. 

Please enjoy complimentary access to this replay and feel free to share with others.

In this five-minute One Thing segment, Anthony discussed adapting the Kubler Ross Stages of Grief to housing sentiment. He covered:
•   The five stages: Denial, anger, bargaining, depression, and acceptance. "We're somewhere between denial and anger. The reason why there are fewer homes listed and fewer transactions is that we're in denial."
•   Key factors that will impact housing prices. "It's really tied to unemployment. If unemployment holds up here, I think we could turn around really nicely. But if unemployment gets weaker as the economy gets weaker, then we're going to have a problem."
•   The outlook: "The Debt Service Ratio is still low because it takes time for mortgages to reprice as they get renewed and for individuals to face that. As we hit these trigger rates, that is going to exacerbate things because many people didn't know about trigger rates."

Please join us for our Veritas 10th Annual Great Canadian Real Estate Conference: Shaking the Foundations on October 6, 2022.

If you would like to hear more about Veritas, please sign up for our free News and Insights Newsletter.

---

July 28, 2022
Canadian Real Estate - Can Rising Rates Cause a Real Estate Market Crash? - Webinar

In this 25-minute video, Anthony and Nigel discuss the state of the Canadian real estate market as we experience the most aggressive series of rate hikes in decades. Highlights:
•   Household debt servicing costs: Mortgage debt service ratios reached record highs in Q1 despite still low-interest rates (this was before the Bank of Canada accelerated interest rate hikes). "Mortgage payments are only going to get more expensive for households. This is going to be a substantial issue in the terms of debt servicing costs and affordability. Housing affordability is going to take a hit," Nigel said.
•   Real estate dollar volumes: Declining for Canada but are still elevated; 
•   Sales: Volumes are declining rapidly for Canada, but are still above pre-pandemic levels (note that we look at data on a trailing-twelve-month basis to avoid short-term volatility, but this means we're still capturing some elevated activity from 2021).
House prices: Despite weakness in sales, the home price index is still well-above pre-pandemic levels.
•   Supply: Canada-wide new listings are trending upwards again, but are still well below where they were during the pandemic. 
•   Supply and demand: There is a good correlation between Months of Inventory and YoY changes in house prices. For Canada, supply needs to exceed six months of inventory to see price declines. Toronto is more sensitive, needing to exceed three months of inventory to lead to price declines.
•   Months of inventory: Currently, we're only at two months of inventory for Canada. "Despite interest rates moving up substantially, despite sales declining substantially, people are not listing their properties for sale. They're trying to wait out higher interest rates."
•   Leading indicator: MoI is a leading indicator, so even if it hits five or six by the fall of this year, we might not see a substantial price decline until spring of 2023, at the earliest.
•   Panic selling: The MoI will move sharply higher if investment property owners start panic selling because of negative sentiment or they have negative cash flow properties from rising rates on mortgages.

See also the slides from the webinar: Canadian Real Estate - Can Rising Rates Cause a Real Estate Market Crash? - Slides

Hold the date: On October 6, we will be hosting our 10th Annual Veritas Great Canadian Housing and Real Estate Conference at the National Club and virtually. More details to come.

---

June 29, 2022
A Gold Mine: Initiating Coverage on Barrick Gold - Video With Martin Pradier

Martin Pradier, our new Materials analyst, initiated coverage on Barrick Gold as the first of many names to follow. Prior to joining Veritas, Martin worked on both the buy-side and sell-side and has almost 20 years of equity research experience.
In conversation with our Head of Research Darryl McCoubrey, Martin provides his approach and outlook for the gold industry as well as more about his initiation on Barrick Gold Corp. This 15-minute video discusses:

•   Gold as a Hedge to Inflation;
•   Sustainable Production Cost vs. Profits for Large-Cap Gold Companies;
•   Profit Drivers Across Large-Cap Gold Miners;
•   Martin's Investment Thesis for ABX;
•   Gold Royalty Companies vs. Producers; and
•   What's next for his coverage;

Clients, see also his initiation report on Barrick: Defence Wins Championships.

---

June 22, 2022
Twitter EBITDA vs Capitalized Costs - With Anthony Scilipoti

One Thing is a new quick-hit video segment in which we will present one idea, trend or data point that we believe investors should consider or may be overlooking. 
In this five-minute segment, Anthony discusses the impact of capitalized costs on EBITDA for Twitter Inc. (not rated). Specifically, he discusses:

•   How Twitter adjusts expenses for R&D, stock-based compensation, and interest, to increase EBITDA.
•   How capitalizing costs overstates the EV/EBITDA multiple.

---

June 16, 2022
Freight Industry: Is the Re-Stocking Cycle Over? - Webinar with Dan Fong

Dan release a video discussing his take on the possible inventory overhang in the supply chain, its impact on freight volumes, and why it's not as negative as it appears.
In this 4-minute video, he discusses:

•   Worries that U.S. total business inventories have surpassed pre-Covid levels;
•   How it is better to look at inventory relative to sales ratios rather than inventory on a stand-alone basis;
•   How inflation is increasing inventory values but not quantities, which is good for the freight industry since companies ship physical quantities, not dollar values.
•   Other ways that inventory value does not equate to inventory availability.

---

June 7, 2022
Trucking Around: Driving Through Weakening Spot Rates - With Dan Fong

Dan released a video discussing his take on TFI International Inc. and why he sees a buying opportunity in the recent pullback of the company's stock.  In this 6-minute video, he discusses:

•   Some of the factors behind the recent slide in Truck Load spot rates, and why TFI is less affected.
•   Why TFI remains well-positioned, despite global macro uncertainty and rising recession risks.
•   Key trends in the Less Than Truckload market, which Dan believes TFI stands to benefit from.

---

May 31, 2022
Free Cash Flow & Stock Based Comp: Shopify - Webinar with Anthony Scilipoti

One Thing is a new video segment in which we will present one idea, trend or data point that we believe investors should consider or may be overlooking. In this 5-minute segment, Anthony discusses the market's growing focus on positive cash flow at technology companies and uses Shopify's cash flow statement as an example. Specifically, he discusses:

•   Stock-based compensation: How this line item may change in 2022 based on the recent employee compensation plans.
•   Calculating free cash flow: Adjustments to consider.

Clients, please also see Desmond's recent reports on SHOP: 

•   Q1-F22 - A Long Way From Long Term
•   Profits To Remain Elusive
•   Stock-Based Consternation
•   SHOP: In Pursuit of Profits

---

May 26, 2022
GTA Real Estate: Can You Make Money? - With Anthony Scilipoti

We are trying out a new segment called One Thing in which we will present one idea, trend or data point that we believe investors should consider or may be overlooking. 
This 3-minute clip is about a topic of utmost importance to Canadian investors, housing, given its importance to the economy, consumer spending and the financial services sector. It answers one important question, 'Can you make money buying houses in the current environment?' 
Anthony discusses: 

•   Greater Toronto Area rentals yields vs. government bond yields;
•   The impact of the sharp swing in interest rates;
•   Two other key factors to watch: Months of inventory and the unemployment rate.

---

May 19, 2022
Earnings Gain Momentum - Webinar with Shalabh Garg

Shalabh released a 7-minute video discussing his take on Element Fleet Management and why he sees annual double-digit earnings growth through FY24. He discusses: 

•   Why servicing revenues are ramping up;
•   Auto production levels gradually improving;
•   Transition to capital-efficient assets continues;
•   Volatile forward P/E multiple;

Clients: For Shalabh's latest report on EFN, see Q1-F22: Earnings Gain Momentum.

---

May 19, 2022
Riding the Cycle: Stock Returns Through the Auto Cycle - with Dan Fong

In this 7-minute clip, Dan discusses the auto sector and opportunities for long-term investors, including:

•   The macro environment: Supply chain disruption, rising input costs, and North American demand drivers;
•   The U.S. auto cycle: Outsized gains for auto stocks during recovery phases.

Clients: See also his recent full sector report, Canadian Autos: Riding the Cycle, as well as his Q1 reports: 

•   LNR - Q1-F22: Mixed Outlook; Wide Margin of Safety
•   MGA - Q1-F22: Still Driving Through a Tunnel
•   MRE - Q1-F22: Regaining Traction

---

May 17, 2022
CP and CNR: Recession Risks & Railroad Freight Exposures - with Dan Fong

In this 5-minute video, Dan discussed Canadian Pacific Railway and Canadian National Railway, including:

•   CNR's and CP's freight exposures: Economically sensitive freight vs. bulk commodities
•   CP's defensive attributes and unique growth opportunities

Clients: For more, see Dan's reports on CP's Q1-F22: Near-term Headwinds, Longer-term Opportunities and CNR's Q1-F22: Eyeing a Return to PSR.

---

May 5, 2022
SHOP: A Walk-Through of Our Downgrade and Model - With Desmond Lau

In this 14-minute video, Desmond discussed what changed his mind on Shopify and what he learned from his call. Highlights:
•   The impact of rising interest rates on technology stocks;

•   Deaccelerating growth and multiples;
•   Details of our valuation model;
•   Q1 highlights: Breaking down GMV and the Deliverr acquisition

Clients: For more, see Desmond's reports Profits To Remain Elusive and Q1-F22 - A Long Way From Long Term.

---

March 10, 2022
Why We Favour Energy: V-List Performance Overview February 2022

In this 11-minute video conference (above), Anthony Scilipoti, Veritas President and CEO, and Darryl McCoubrey, Head of Research and Head of our Investment Committee, discuss the performance and approach of our V-List model portfolio.
They discuss:

•   What is the V-List? The process is a bottoms-up, equally-weighted model portfolio of 12-25 companies. Names must be large caps and liquid. The V-List is also sector agnostic and has low turnover. 
•   Performance: Our V-List model portfolio is up 3.06% year to date, versus the S&P/TSX Composite negative 0.12%, as of the end of February. Since its inception in 2004, the V-List has outperformed S&P/TSX Composite by 335 basis points annually.
•   Defensive bias: “We’re favouring stocks with downside protection with catalysts to the upside,” Anthony said.  
•   Energy: Why the V-List went overweight energy and avoided technology in 2021. “If we don’t drill more, we’re going to have a lot more inflation. That’s clearly going to be a big issue given affordability constraints,” Darryl said.
•   The War in Ukraine: How the spike in energy prices affects our outlook on the sector.

Find out more about our Track Record.

---

March 9, 2022
Digging into the Energy Outlook
Webinar with Darryl McCoubrey

In this 9-minute webinar, Darryl and Anthony discussed the outlook for energy while prices spike because of the invasion of Ukraine. They discussed:

•   The supply/demand outlook: Historic energy demand correlation with population growth and GDP. Why the International Energy Agency's forecasts typically understate demand.
•   Natural gas versus renewables: Costs of natural gas versus wind and solar with storage, and how those costs change with decarbonization policies. 
•   Carbon capture and storage (CCS): “I think Canada is going to go with relative vigour behind the economics of carbon capture,” Darryl said. “I think you could see a decisive shift towards CCS. The caveat being that this 90% gas with CCS is not proven at scale.” Why CCS may benefit some of Veritas's top picks.

---

February 18, 2022
Interest Rates: Who's Right? Who's Wrong?
Webinar with Nigel D'Souza

Nigel delivered a 13-minute webinar containing the results from a recent client poll on interest rate expectations. He compared the results versus the number of hikes priced in by fixed income markets, and the implications for Canadian banks.
As he discussed, the divergence between equity and fixed income markets on the outlook for interest rates has material implications for Canadian banks. Coming out of the oil and gas crisis in 2018, the Bank of Canada hiked rates four times over 12 months while the forward P/E multiple for Canadian banks declined from a peak of 12.0x to 9.0x as investor sentiment shifted. 

---

January 31, 2022
Veritas Top Ideas for 2022 Webinar: Picking Our Spots in a Market of High Uncertainty

The webinar covered:

•   20,000-foot Overview with Head of Research Darryl McCoubrey
•   Financials with Nigel D’Souza (starting at 1:55 minutes); 
•   Auto parts suppliers with Dan Fong (starting at 11:20 minutes); 
•   Consumer and retail with Kathleen Wong (starting at 15:22);
•   Tech with Howard Leung (starting at 20:48);
•   Telecom with Desmond Lau (starting at 29:20);
•   Construction and industrials with Dimitry Khmelnitsky (starting at 38:05); 
•   Infrastructure and Utilities with Darryl (starting at 1 hour).

 

Clients: See also the slides from the presentation.

---

January 27, 2022
Banks Webinar – Picking the Winners When Rates Rise
With Nigel D'Souza

Nigel held a 40-minute webinar following the Bank of Canada's January rate announcement. It included:

•   Reaction to the Bank of Canada’s rates announcement and a recap of the rapid shift for interest rate expectations since Q4-F21 due to inflation;
•   A walkthrough of the balance-sheet components that contribute to net interest margins;
•   Important disclosure for modeling and forecasting net interest margins and net interest income, as well as a ranking of bank loan portfolio duration and analysis of funding mix;
•   A ranking of the Canadian banks under our coverage on the sensitivity of earnings to changes in interest rates. What else is priced in for each bank?
•   Questions from participants.

Clients: See also the slides for his presentation.

---

 

---

---

2021 Webinars and Video Replays

December 6, 2021
Canadian REITs: Opening Up The Compensation Can of Worms
With Howard Leung and Anthony Scilipoti

Howard has written two reports recently covering the fairness of executive compensation plans for 21 of Canada’s largest REITs. In this 18-minute video conference, Howard and Anthony discussed:
•   Why study management compensation during the pandemic? REITs underperformed significantly in 2020. We wanted to see how boards reacted during the pandemic shock so that we could gain insight into how they will react in the next shock.
•   How are compensation plans structured? The difference between short-term (STIPs) and long-term incentive plans (LTIPs).  What Howard learned about STIPs.
•   Transparency: What makes a compensation plan more transparent than others? What KPIs should investors favour and why? What REITs use KPIs that are not clear?
•   Is there a relationship between good compensation structure/disclosure and good performance? Yes, but it is complicated. “Some of the REITs that I’m favorable on, I can see why they structured their STIP the way they did, and it looks reasonable.” What REITs need to make improvements. 

See also Howard's Accounting Vigil How REITs Use FFO to Determine Bonuses and part I on his REIT compensation study Canadian REITs: A Trip Into STIP (part II on long-term incentive plans still to come).

---

November 15, 2021
Telcos - Board Man Gets Way: What's Next?
With Desmond Lau

In this 34-minute webinar, Desmond covered:
•   Is Edward right? Yes, Rogers has underperformed, but was it CEO Joe Natale’s fault?
•   Grading Joe Natale: Evaluating Rogers’ Unlimited strategy, capital allocation and non-core assets. What are the risks in acquiring Shaw?
•   Reading between the lines: What was the disagreement within Rogers that led to the board fight?
•   Top Picks in the sector.

See also the slides for his presentation.

---

November 2, 2021
Suncor Energy versus Imperial Oil: Was Q3 an Inflection Point? 
With Jeff Craig

In this 8-minute webinar, Jeff discusses:
•   Why SU has underperformed IMO over the last year;
•   Why SU outperformed IMO after Q3 results last week;
•   Differentials: Heavy oil differentials have widened while light crude differentials have narrowed. Why this is good for SU but not IMO.
•   Downstream: Gas stations and utilization drives SU’s outperformance.
•   Shareholder yield comparison: Our forecast is for higher shareholder yields from SU, yet it is trading at a discount.

See also the slides for his presentation. 

---

October 28, 2021
Supply Chain Disruption Winners: TFII, CP
With Dan Fong and Anthony Scilipoti

In this 11-minute webinar, Dan and Anthony covered:
•   Stress in the supply chain: Are there signs that it is easing up? Why companies will build more resiliency into their supply chains with higher, more distributed inventories. 
•   Why TFI International and CP Railway will benefit. 

---

October 25, 2021
Focusing on the Essentials: V-List Overview Q3 2021

We’re very proud of the performance of our V-List model portfolio, which now has a 17-year track record. 
In this 11-minute video, Anthony Scilipoti, Veritas President and CEO, and Darryl McCoubrey, our Head of Research and Head of our Investment Committee, discussed our approach for picking stocks for the V-List and the performance through the first three quarters of the year.
They discussed:
•   Performance: Since its inception in 2004, the V-List has outperformed S&P/TSX Composite by 314 basis points annually (as of the end of September). It is also outperforming this year.
•   The process: It is a bottoms-up, equally-weighted portfolio. Names must be larger cap and liquid. The V-List is also sector agnostic and has low turnover. “Our level is diligence is deeper,” Anthony said. “Our analysts cover fewer names, and they spend more time looking at the details associated with those names.”
•   Focusing on cash-based returns: We focus on actual cash-based returns instead of longer-term growth stories dependent on low-cost equity funding. Our Buys have outperformed the S&P/TSX Composite by 377 basis points over the past 20 years, while our Sells have underperformed by 446 basis points. 
•   Inflation: Our current strategy focuses on companies that provide essential goods and services. “It is important we focus on essential things: real estate, energy, food. These are the kinds of things that can pass along inflation and safeguard our returns,” Darryl said. Specifically, we increased our allocation to traditional energy while avoiding renewable energy due to its premium valuations.

Find out more about our Track Record.

---

October 25, 2021
Rogers: Big Picture Thinking on Boardroom Turbulence
With Desmond Lau and Anthony Scilipoti

In this 13-minute video conference, Desmond and Anthony covered:
•   What is Edward Rogers thinking? Desmond reads between the lines of Edward’s statements to understand his motivations
•   What’s next for Rogers’ management? Desmond evaluates CEO Joe Natale’s performance and whether criticism is warranted.
•   How does this play out, and what does this mean for the stock?

---

October 5, 2021
Canadian Autos Slides: Chipping Out of the Rough
With Dan Fong

Dan has put together a four-minute webinar on the auto sector chip shortage. He discussed:
•   New vehicle inventories are at record lows: How bad is it?
•   A tale of two chip disruptions: Where are bottlenecks? 
•   Steering auto back on track: Production rates and normalized demand.

Extended slide deck: Chipping Out of the Rough - slides

---

September 22, 2021
Veritas Best Ideas: Just The Essentials

The markets are at a new stage. As the euphoria of the re-opening trade wanes, we face the realities of a potential fourth wave, as our supply chains remain a mess and inflation looms. Our award-winning analysts share their top picks and pans to close out 2021 in telcos, technology, financial services, retail, energy, utilities, transportation, industrials and REITs.

---

September 14, 2021
Our Best Picks To Take Advantage of Natural Gas Prices
With Jeff Craig and Anthony Scilipoti

In this 7-minute video conference, Anthony and Jeff discuss:
•   Natural gas prices: Supply and demand picture for North America and Europe. 
•   Natural gas and the oil sands: What the natural gas picture means for the oil sands producers.
•   Our top gas pick. 

---

September 9, 2021
Telcos: Wireless Back to School Fundamentals
With Desmond Lau

In this 30-minute webinar, Desmond discussed:
•   Limitations of free cash flow: All telco definitions exclude spectrum auction spending since those amounts are excluded from capital expenditures. However, $9 billion, $7 billion and $3 billion have been spent on spectrum by RCI, T and BCE, respectively, in roughly the past decade. 
•   Incremental wireless Return on Invested Capital: Comparing the three incumbents.
•   Networks: RCI.B has spent the most, but its network still ranks lower than BCE and T. 
•   Device financing: Adoptions rates, ARPU growth, margins and churn impact, and accounting disclosure explained;
•   Which telco is best in class

---

 

 

 

 

 

 

 

---

September 1, 2021
Canadian Rails - CP Pulls Ahead
With Dan Fong and Anthony Scilipoti

In this 6-minute video conference, Anthony and Dan discuss:
•   Canadian National Railway’s options: Terminate the merger, appeal or proceed without a trust? “I went through the STB’s decision, and the tone of their rationale was extremely aggressive and very deliberate.”
•   Canadian Pacific Railway’s options: “I think CP is in a win-win situation..”

Full reports:
•   CP: A Win-Win Situation
•   Canadian Rails: A Twist in the Track - CNR Denied; CP Re-Engages

---

July 28, 2021
Canadian Insurance: Why we favour MFC and SLF over GWO
With Nigel D'Souza and Anthony Scilipoti

In this 8-minute video conference, Anthony and Nigel discuss:
•   Great West Lifeco: A brief overview of Nigel’s recent initiation on GWO (Betting on Synergies) – a walk through the catalysts and the risks.
•   Manulife and Sunlife: Near-term risk of exposure to Covid variants in Asia and longer-term upside (Earnings Beta to Delta Variant).

Full reports:
•   Betting on Synergies
•   Canadian Lifecos: Earnings Beta to Delta Variant

---

July 22, 2021
Krispy Kreme's Sugar High: Understanding its positioning in the restaurant industry
With Kathleen Wong and Jacob Liu

In this 15-minute video, Kathleen and Jacob discuss:
•   Rich valuation: M&A multiples, EBITDA and FCF yield comparisons;
•   Store economics: Franchise acquisitions will be margin dilutive;
•   De-franchising strategy: Top-line growth from 2016 to 2020 was primarily attributable to franchise acquisitions;
•   Market penetration: Execution risk in new markets and stiff competition.
•   Accounting: Supply-chain financing conceals leverage.
•   Stock price: A question about where the stock should be trading.

Full report:
Krispy Kreme's IPO -Sugar High

---

June 28, 2021
What To Consider As Oil Stays Elevated
With Jeff Craig and Anthony Scilipoti

In this 9-minute video conference, Jeff and Anthony discuss:
•   Why the supermajors will divest their oil sands projects;
•   The advantage of a fully Canadian-owned oil sands;
•   What deals could be on the table; 
•   The impact of inflation on the oil and gas industry and where investors can find inflation relief.

Full reports:
•   Flash: Hedging Inflation in Oil and Gas (PSK, TPZ)
•   Climate Policy Creates A Buyer’s Market (CNQ, SU, CVE, IMO)

---

June 24, 2021
Dye & Durham: The Jury Is Out
What Should You Do With Management's Intention To Offer?
With Howard Leung

In this 38-minute webinar, Howard covered:
•   Operations: Why DND has a strategic advantage over competitors and can get away with raising prices.
•   The real revenue mix: Why is management so reluctant to disclose revenue mix between business and real estate law? We estimate the revenue share of each business line and the implications of the mix.
•   Discussing synergies: When Dye & Durham makes an acquisition, what revenue and cost synergies do they bake in? We look at past acquisitions as case studies.
•   Sales below zero: Last year, DND reported negative revenues in their UK segment.

Full report: Flash: The Jury's Out

---

June 23, 2021
How Much Is A Higher Moat Worth? CNR, KCS
With Dan Fong and Anthony Scilipoti

In this 9-minute video conference, Dan and Anthony discuss:
•   What the market is missing in the CNR/KCS combination: Building a competitive moat and the Mexican rail opportunity 
•   Can they get the deal done? “Twenty years ago, the U.S. Surface Transportation Board developed a new framework for evaluating class one railroad mergers. The STB is setting a precedent here, so they will be careful and they are going to take their time deliberating. But if you look at it on the surface, in terms of competition, a lot of competition remains.”
•   What should investors do? 

Full report: Expanding the Moat

---

June 10, 2021
Brookfield Infrastructure and Brookfield Business Partners: Comparing Inflation Resiliency
With Dimitry Khmelnitsky, Henry Yu and Anthony Scilipoti

In this 7-minute video conference, Dimitry, Henry and Anthony discuss:
•   How to frame inflation: What are the input costs, and can companies pass along costs to end consumers? Are contracts tied to indexing? Are consumers willing to pay more? Operating as well as Capex input costs; Foreign exchange effects;
•   Interest rates: Impact on debt service costs, asset and liability values, and discount rates; Impact on market’s perceived value;
•   Inflation resiliency: BIP’s operations are more resilient to inflation than BBU; however, BIP’s valuation is higher and therefore more vulnerable. 

Full report: BIP & BBU: Thinking About Inflation

---

June 10, 2021
REITs OUTLOOK | Return To the Office, Lease Obligations and Inflation 
With Howard Leung and Anthony Scilipoti

In this 14-minute video conference, Howard and Anthony discuss: 
•   Organic growth: The outlook for this year and next for each real estate sector;
•   Return to the office: The push and pull between employees and employers to return to the office; What is happening in other markets that have already opened up;
•   Lease obligations: Comparing the lease obligations for Tech Sector companies before and after the pandemic and why this is so important to the Canadian office REITs outlook;
•   Inflation: Debt ladders and what REIT sectors are most protected from rising interest rates.

---

June 7, 2021
Canadian Banks - What To Watch As We Exit The Pandemic 
With Nigel D'Souza and Anthony Scilipoti

In this 8-minute video conference, Nigel and Anthony discuss:
•   The market’s response to Q2-F21 and what it is looking for next.
•   The loan growth outlook for Canadian versus U.S. banking.
•   Which bank stands to do best when loan growth picks up as we exit lockdowns.
•   Dividends, buybacks and M&A.

---

June 2, 2021
A 25% Catch-Up Trade: SU, IMO 
With Jeffrey Craig and Anthony Scilipoti

In this 6-minute video conference, Jeff and Anthony discuss:
• Why has Imperial Oil (IMO) outperformed Suncor (SU)? How do SU and IMO stack up against one another?
• How do the valuations stack up? “That’s the crux of our thesis here – the dramatic difference in valuations,” Jeff said. “When we issued our report last week, SU was trading at a 40% discount to IMO on both price to cash flow and free cash flow to equity. That’s now 35% after a few good days of trading, but we think that’s a massive discount. While we wouldn’t expect the gap to close 100%, we think there’s probably a 25% catch-up trade.”
• SU’s torque to higher oil prices: At US$60 WTI, SU’s Free Cash Flow climbs 30%, compared to an increase at IMO of 18%.
• Oil prices: “In the mid-US$60s [WTI], it seems like a nice Goldilocks position where things don’t get too hot and these companies can make a lot of money, a lot of free cash flow, [and provide] big dividend raises and huge deleveraging.”

Full report: IMO and SU: Here Comes the Sun

---

May 18, 2021
Seeing Through The Glare: A Study of Non-GAAP Metrics in the Residential Solar Industry
With Dimitry Khmelnitsky & Jacob Liu

In this in-depth 60-minute webinar, Dimitry and Jacob discuss our recent report on the U.S. residential solar leasing sector, focusing on the three industry leaders: Sunrun Inc. (RUN), Sunnova Energy International Inc. (NOVA), and SunPower Corporation (SPWR). 
These stocks were down 30% to 40% from peak when our original report was published last month and are down 16% to 27% at the time of the webinar.
 
They discussed:
• Why solar non-GAAP metrics matter
• Industry conditions, economic subsidies and business model: Think of residential solar companies as financing companies.
• Key non-GAAP metric definitions and management’s assumptions: 
• How much of the current share price depends on management’s assumptions.
• Key risks to management’s assumptions.
• Veritas adjustments: Our adjustments versus management’s assumptions
• Alternative ways to assess performance: Revenue yield
• Adjusted EBITDA and operating cash flow pitfalls
• Executive compensation



Full report: Blinded by the Light: Highlighting Solar Non-GAAP Risks – NOVA, RUN, SPWR

---

April 23, 2021
Solar Industry: Making Sense of Complicated Non-GAAP Metrics
With Dimitry Khmelnitsky, Jacob Liu and Anthony Scilipoti

In this 10-minute video conference, Dimitry, Jacob and Anthony discuss highlights of our recent report on the U.S. residential solar leasing sector, including three industry leaders: Sunrun Inc. (RUN), Sunnova Energy International Inc. (NOVA), and SunPower Corporation (SPWR).
They discussed:
• Why we stepped across the border to take an in-depth look at this sector: “Analysts are cheerleading, almost competing with each other on who is more bullish on the prospects. So we decided to take a look.”
• Aggressive non-GAAP metrics: Why U.S. GAAP financial statements aren’t very useful for this sector and how this opens the door for management teams to use aggressive non-GAAP metrics.
• Why these are some of the most-complicated non-GAAP metrics that Dimitry has seen in his 15-year career at Veritas.
• Key risks to the non-GAAP metrics:  These include assumptions for zero churn rates and zero default rates over the next 20 to 30 years. 

Full report: Blinded by the Light: Highlighting Solar Non-GAAP Risks – NOVA, RUN, SPWR

---

April 22, 2021
What Happens Next in the CNR/CP Bunfight for KCS?
With Dan Fong and Anthony Scilipoti

In this 10-minute video conference, Dan and Anthony discuss:
• Why KCS is so attractive strategically for both CNR and CP.Which partner will KCS likely align with and why?
• Which bid is likely to receive more regulatory scrutiny?
• Can CP afford to raise its bid? Could another player come in with another bid?

---

April 22, 2021
Canadian Oil & Gas – A Quick Walk Through Our Top Picks
With Jeffrey Craig and Anthony Scilipoti

In this 8-minute video conference, Jeff and Anthony discuss:
• Oil was trading at about negative US$37 a barrel a year ago. What have we learned from the past year as investors?
• A lot has changed in the last few months in the sector. Why are you more optimistic about commodity forecasts for 2021 than previously?
• Top picks in the sector: CNQ, SU, ERF and ARX
• Why should Suncor sell its gas station business, and what is it worth?

---

April 19, 2021
Why Overwaitea May Be the Next Domino To Fall
With Kathleen Wong and Anthony Scilipoti

In this 11-minute video conference, Kathleen and Anthony ddiscuss consolidation trends in the grocery industry and why she thinks George Weston (WN) should pursue a purchase of Overwaitea. They discuss:
• The math on why a purchase of regional-grocery Overwaitea Food Group makes more sense for WN than buybacks or buying out the remaining shares of Loblaw that it doesn’t already own.
• If Overwaitea is for sale, then Loblaw, Metro and Empire would also be interested. How much is Overwaitea worth? Who wins a bidding war and why?

---

April 12, 2021
Getting Comfortable With A Complex Beast
With Dimitry Khmelnitsky and Anthony Scilipoti

In this 14-minute video conference, Dimitry and Anthony discuss our recent initiation on Brookfield Business Partners (BBU) and how Dimitry was able to get comfortable with the complexities of BBU’s operating subsidiaries and the opaqueness of its disclosure.
They discussed:
• What we found when going through the filings of the operating subsidiaries in various jurisdictions around the world;
• Non-GAAP metrics and how to get an accurate picture of sustainable free cash flow;
• Why investors need to evaluate maintenance Capex carefully;
• Which subsidiaries present key risks and why.

---

March 26, 2021
REITS: The Reopening Play
With Howard Leung

Howard’s 1-hour STREIT Smarts webinar discussed:
• Interest Rate Risk: With higher bond yields and whispers of inflation, which REITs have the highest exposure to rising rates? 
• (Un)fair Values? COVID disrupted rent collections and growth. Did any trusts try to get around that by changing methodologies or messing with cap rates?
• The Fate of Offices: The economy is set to reopen but may not include office tenants. What does that mean to landlords?

---

March 26, 2021
What the Street is missing on bank earnings
With Nigel D'Souza and Anthony Scilipoti

In this 12-minute video conference, Nigel and Anthony discuss:
• How the run-off in excess deposits supports net interest income and top-line revenue
• How reversals of credit loss provisions are a tailwind for earnings
• Why BMO is our favourite ban
• How will OSFI follow the FED’s decision to remove restrictions on dividends and buybacks for US banks 

---

March 24, 2021
Railways: Golden Age for Freight Stocks
With Dan Fong and Anthony Scilipoti

In this 10-minute video conference, Dan and Anthony discuss Canadian Pacific’s $29-billion merger with Kansas City Southern and why Dan is positive about it despite the stocks taking a hit yesterday after the companies announced the deal.
Highlights:
• They discuss the re-opening and ongoing re-stocking of the North American economy.
• Why the deal makes strategic sense. What are investors missing?
• What other deals do you see in the North American rail space?

---

February 1, 2021
Telus International: Agents of Change
With Desmond Lau

Desmond’s 55-minute pre-IPO webinar covered:
•   Can TI’s strong culture be considered a moat? 
•   How does a compensation scorecard similar to Telus’ lead to high employee engagement and low attrition?
•   What logical adjustment to FCF does TI need to make that would reduce this metric?
•   Is a “material weakness” in internal controls cause for concern? 
•   Should investors be concerned about TI’s net debt?

---

January 31, 2021
Manulife Financial: Mispriced and Misunderstood
With Nigel D'Souza
Click here to view the presentation slide deck

In this 14-minute webinar, Nigel discussed MFC’s strong capital position, limited COVID impact on its insurance business and a return of core investment gains. MFC’s invested assets are also well-diversified with high-quality holdings.

---

January 28, 2021
2021: Investment Themes and Ideas Webinar
With Anthony Scilipoti and Darryl McCoubrey

In this 1-hour webinar, Anthony and Darryl provided an overview of some of the macro indicators that we’re watching closely as well as the firm's TOP PICKS.