Wednesday, September 8, 2021 - BEFORE THE OPEN
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Wednesday, September 8, 2021
STOCKS
Source: FactSet (5pm EDT)
BEFORE THE OPEN
Source: Thomson Reuters
Futures for Canada's main stock index were little changed ahead of the Bank of
Canada’s interest rate decision. Wall Street futures were down, mirroring
European shares, as concerns over the pace of economic recovery hurt
sentiment. Japan's Nikkei ended at a near six-month high, as investors scooped
up cheap stocks. The U.S. dollar rose against the euro a day before the European
Central Bank policy decision. Oil gained as U.S. Gulf of Mexico producers made
slow progress in rebuilding output after Hurricane Ida. Gold prices were in the COMMODITIES & CURRENCIES
Source: FactSet (5pm EDT)
positive territory.
STOCKS IN THE NEWS
Source: Thomson Reuters
American Airlines (AAL):
The labor union representing American Airlines pilots said it will begin
informational picketing in coming weeks at the carrier's major hubs to protest
their work schedule, fatigue, and lack of adequate accommodation over the
summer. In August, a union representing Southwest Airlines pilots filed a lawsuit
challenging forced time off and other changes to working conditions imposed by
the airline during the COVID-19 pandemic.
Boeing Co (BA):
A Delaware judge ruled on Tuesday that the company's board of directors must GLOBAL INDICES
Source: FactSet (5pm EDT)
face a lawsuit from shareholders over two fatal 737 MAX crashes that killed 346
people in less than six months. Vice Chancellor Morgan Zurn ruled Boeing
stockholders may pursue some claims against the board, but dismissed others.
Boeing said late Tuesday it was "disappointed in the court's decision to allow the
plaintiffs' case to proceed past this preliminary stage of litigation.”
Coinbase Global Inc. (COIN):
The U.S. Securities and Exchange Commission (SEC) has threatened to sue
Coinbase if the crypto exchange goes ahead with plans to launch a programme TSX SECTORS
Source: FactSet (5pm EDT)
allowing users to earn interest by lending crypto assets, Coinbase said. The SEC
has issued Coinbase with a Wells notice, an official way it tells a company that it
intends to sue the company in court, Paul Grewal, the company's chief legal
officer said in a blog post.
THINGS TO KNOW
Source: Bloomberg Finance L.P.
The debate on Wall Street over investments in China is heating up, with
billionaire investor Ray Dalio saying the opportunities in the nation cannot be
neglected. Morgan Stanley, Citigroup Inc. and Credit Suisse Group AG are all
cautioning investors on the outlook for U.S. equities. El Salvador’s official
adoption of Bitcoin as legal tender did not go as well as might have been hoped,
with the introduction marred by technical problems and a 17% plunge in the
digital token. U.S. job openings data for July is at 10:00 a.m.
NOT FOR DISTRIBUTION TO THE UNITED STATES. This publication is a general market commentary and is provided for informational purposes only. The author(s) is not a Research Analyst and this
communication is not the product of Canaccord Genuity Corp.’s Research Department. It should not be construed as a research report or investment advice.
For important information, please see the Important Disclosures beginning on page 9 of this document.
CANADIAN Equities of Interest
Listed Alphabetically by Symbol
Enthusiast Gaming Holdings.* (EGLX: $5.44), Net Change: -$0.06, • The Coffee Sleeve
Change: -1.09%
A message from our Wealth & Estate Planning team
Horizontal expansion into casual games
• Enthusiast Gaming announced the acquisition of Addicting
1) When was the last time you reviewed your
Games (AG) this morning for US$34M/C$42.5M. AG is a
Financial Plan?
developer and distributor of 1,500+ casual games available
online or in mobile apps, and has a strong base of 10M+
2) Do you have the proper beneficiaries on your
monthly users
accounts and insurance policies?
• This acquisition adds web/mobile game developer capabilities,
new communities, in-app purchase revenue and a subscription 3) Is your insurance up-to-date?
business (Game Pass), all of which can be augmented by EGLX
media and influencer assets Developing a financial plan or an estate plan will
help ensure that you have the information and tools
Yamana Gold Inc.* (YRI: $5.43), Net Change: $-0.10, to make the right investment choices for you. At
Change: -1.81% Canaccord Genuity Wealth and Estate Planning
Services, we know how important it is to develop a
2021 brownfield exploration update
plan that will take care of your needs as well as the
• This morning, Yamana Gold released an exploration update for
ones you love. A Canaccord Genuity Wealth & Estate
its Minera Florida, Cerro Moro, El Peñón and Canadian Malartic
Planning Specialist can guide you through this
mines
process, ensuring you make the most of your
• Management notes the results indicate excellent potential to investments and follow the detailed plan that takes
add new reserves and resources, consistent with its strategy of all of your current and future financial needs and
extending mine life through annual depletion replacement
objectives into play.
• Recall that Yamana's 2021 brownfield exploration budget
increased to $74 million (+44% vs. 2020 spend) and total
exploration budget to $110 million (+51% vs. 2020 spend)
• Management also noted the exploration program at the
Wasamac project has started, and it plans to drill 120,000m in
2021/2022 (including at least 68,000m of infill and 10,000m of
drilling on the broader property)
US EQUITIES OF INTEREST
Listed Alphabetically by Symbol
TransMedics Group.* (TMDX: $31.80), Net Change: $-0.87, Change: -2.66%
OCS Heart DBD FDA approved with broader than expected label
• TransMedics announced this morning that it has been granted FDA PMA approval of its OCS Heart System for use with organs
from donors after brain death (DBD)
• Importantly, the label for OCS Heart was broader than both investors and management had expected, including the ~6,000
hearts that go unused today (which was anticipated), and also opening up ~25% of the existing transplant market
• In terms of commercial launch, the registry is expected to be seamless, overlapping significantly with the UNOS registry,
inventory is on hand, reps have been trained and accounts have been targeted and engaged (via the DCD CAP program)
• The company will prioritize direct acquisition sales to the 25 transplant centers which already have OCS Heart experience via
clinical trials and expects to be fully active in Q4/21E
Wednesday, September 8, 2021
Unless otherwise noted, the above commentary is derived from research published by Canaccord Genuity Corp and/or Canaccord Genuity LLC. For more information, please contact your investment
advisor. For current disclosures, please visit our Online Disclosure Database at http://disclosures.canaccordgenuity.com/EN/Pages/default.aspx.
2INDUSTRY UPDATE
Cannabis
Canada
• August saw Canadian cannabis valuations take yet another step back with our Canaccord Genuity Canadian Cannabis Index
(CGCCI) down 6.2% during the month – with most Canadian LP stock prices more than cut in half YTD from their 2021 highs
• August also saw another strategic relationship between a Canadian and US operator with Tilray and MedMen announcing
that Tilray plans to acquire a majority stake in MedMen’s senior secured convertible notes
United States
• As has been the trend as of late, for the month of August, our Canaccord Genuity US Cannabis Index (CGUSCI) declined by
~7.6% MoM
• M&A in the sector continues to accelerate - most recently with the announced combination of MSO TerrAscend and Michigan
retail leader Gage Cannabis, while Verano and Ayr Wellness remain the most active in adding depth to their growing US
exposure
• July saw the release of Senate Majority Leader Chuck Schumer’s long-awaited cannabis reform discussion draft
Source: Canaccord Genuity Research
Oil
Market – Platts/Reuters
• WTI (October) is up 1.2% to $69.14 and Brent (November) is up 1.0% to $73.39. WTI is higher after finishing down 1.4% on
Tuesday, though it is a fairly quiet morning in the space
• US Gulf production continues to inch back after last week's hurricane disruption, as Shell has started to return crews to Gulf
platforms
• However, around 1.44M bpd, or 78% of Gulf output, remains shut, as Hurricane Ida's damage to offshore production was the
most since 2005
• The dollar also weighed on oil on Tuesday when it strengthened across the major crosses, and is stronger again this morning
OPEC+ – Platts
• Protests are brewing in two key Libyan eastern ports amid a power struggle between oil minister Oun and NOC chair Sanalla,
and demonstrations have already caused delays, with a ship at the port not fully loaded despite its arrival several days ago
• Sanalla was retained as chairman at the NOC on September 5, but the oil ministry put a statement out on September 6 noting
its recommendation for changing board directors at NOC and dismissing Sanalla
• Libyan crude output has held around 1.1-1.2M bpd in recent months, though many expect volatility in the lead up to the 24-
Dec elections
Iran – Bloomberg/Reuters
• Iran's new government has continued to dramatically increased production of uranium, while failing to resume full
cooperation with international monitors, according to an International Atomic Energy Agency report released Tuesday
• Iran has increased its stockpile of uranium enriched to the level needed for weapons by about a third in the last three months
and was expanding its production capacity
• Iran is determined to increase its oil exports despite the sanctions, which were estimated to have fallen from about 2.8M bpd
in 2018 to 600K bpd in June
Source: FactSet
Wednesday, September 8, 2021
Unless otherwise noted, the above commentary is derived from research published by Canaccord Genuity Corp and/or Canaccord Genuity LLC. For more information, please contact your investment
advisor. For current disclosures, please visit our Online Disclosure Database at http://disclosures.canaccordgenuity.com/EN/Pages/default.aspx.
3MORNING INK REPORT
Global Atomic positioned for the uranium bull market
Source: INK Research
As of: Tuesday, September 7, 2021
Company Highlight: Global Atomic (GLO)
• Uranium stocks appear to have entered into a bull market that has some legs, as last week, Global Atomic (GLO) moved into
the sunny INK Edge category, making it only one of three uranium-focused stocks to reside in the top 10% of all stocks ranked
• GLO has confirmed a 90% ownership stake in the Dasa project, a uranium deposit 105 kilometres south of the uranium mining
town of Arlit, in the Republic of the Niger
• The company hopes to complete a feasibility study on the project in 2021, and if all goes well following the release of the
study, GLO hopes to bring the 12-year Phase I of the project into full production by the end of 2024
• A 2020 preliminary economic assessment estimated the project had an after-tax net present value of US$211 million at a
uranium price of US$35 per pound, which is about where the spot price was last month
• On August 20, Global Atomic CEO Stephen G. Roman bought 6,705 shares at $2.35. He now holds 12,753,777 shares
representing 7.8% of all stock outstanding
• Earlier, on June 18, Director Dean Ronald Chambers (AIR, MPVD) bought 17,000 shares at $2.89
• Global Atomic has above-median ownership (direct & indirect holdings) by Officers and Directors compared to other small-
cap stocks in the Financials sector according to SEDI filings as of September 6, 2021
Global Atomic Chart (GLO)
Source: INK Research
Wednesday, September 8, 2021
Unless otherwise noted, the above commentary is derived from research published by Canaccord Genuity Corp and/or Canaccord Genuity LLC. For more information, please contact your investment
advisor. For current disclosures, please visit our Online Disclosure Database at http://disclosures.canaccordgenuity.com/EN/Pages/default.aspx.
4MARKET MOVERS
Source: FactSet
Wednesday, September 8, 2021
Unless otherwise noted, the above commentary is derived from research published by Canaccord Genuity Corp and/or Canaccord Genuity LLC. For more information, please contact your investment
advisor. For current disclosures, please visit our Online Disclosure Database at http://disclosures.canaccordgenuity.com/EN/Pages/default.aspx.
5ASSET CLASS PERFORMANCE
Source: FactSet
*All numbers presented on the table below are based on total return
Wednesday, September 8, 2021
Unless otherwise noted, the above commentary is derived from research published by Canaccord Genuity Corp and/or Canaccord Genuity LLC. For more information, please contact your investment
advisor. For current disclosures, please visit our Online Disclosure Database at http://disclosures.canaccordgenuity.com/EN/Pages/default.aspx.
6MACRO-EVENT SCHEDULE
Source: Bloomberg Finance L.P.
EARNINGS
Source: Yahoo Finance
Wednesday, September 8, 2021
Unless otherwise noted, the above commentary is derived from research published by Canaccord Genuity Corp and/or Canaccord Genuity LLC. For more information, please contact your investment
advisor. For current disclosures, please visit our Online Disclosure Database at http://disclosures.canaccordgenuity.com/EN/Pages/default.aspx.
7MOST READ NEWS
Source: Bloomberg Finance L.P.
1) Stocks, Futures Fall Amid Growth, Valuation Risks: Markets Wrap
2) Deutsche Bank Calls End of Honeymoon Phase With Remote Work
3) Bitcoin Nurses Losses in Wake of El Salvador’s Glitched Rollout
4) DalioSays China, Singapore Opportunities Can’t Be Neglected
5) Morgan Stanley to Citigroup Turn Sour on U.S. Equity Outlook
6) U.K. Blinks First on Covid Deficits With Tax at 70-Year High
7) Wall Street Lends Corporate America ESG Credibility for 0.01%
8) Credit Suisse Names Compliance Chief After Twin Scandals
9) Evergrande Credit Rating Cut by Fitch on ‘Probable’ Default
10) The Simple Flaw That Sank Greensill’s Complex Financial Empire
THE LAST DROP: “Growth and comfort do not coexist.”
- Ginni Rometty
Wednesday, September 8, 2021
Unless otherwise noted, the above commentary is derived from research published by Canaccord Genuity Corp and/or Canaccord Genuity LLC. For more information, please contact your investment
advisor. For current disclosures, please visit our Online Disclosure Database at http://disclosures.canaccordgenuity.com/EN/Pages/default.aspx.
8Appendix: Important Disclosures
While this product is drawn from sources believed to be reliable, the accuracy and completeness of the information contained herein is not guaranteed. Any reference
to a research report or a recommendation is not a solicitation to purchase or sell any security and it does not consider the individual investment objectives, financial
situation, suitability or risk tolerance of any person or corporation. Accordingly, investors should obtain advice based on their own specific circumstances before making
any investment decision. Canaccord Genuity Wealth Management is a division of Canaccord Genuity Corp. Member – Canadian Investor Protection Fund (CIPF) and the
Investment Industry Regulatory Organization of Canada (IIROC).
Quest®: Canaccord Genuity’s proprietary online valuation and analytical tool which combines consensus market figures with the Quest® Discounted Cash Flow (DCF)
Valuation Model.
Quest® triAngle is Canaccord Genuity’s proprietary 15-factor, stock-picking tool, which systematically measures Value, Quality and Momentum and presents the results
in a simple, easy to understand score. It takes a multi-pronged approach to Value, Quality and Momentum using five factors for each component, which adds more
consistency of performance unlike a reliance on one single measure. It uses a mix of historic and forecast data, and combines absolute valuation data with comparisons
relative to history. The triAngle is designed to generate stock ideas and provide a consistent framework for analysis of portfolio holdings.
Quest® Methodology
Quest® is an analytical tool that involves use of a set of proprietary quantitative algorithms and value calculations to derive a number of corporate performance and
valuation metrics, including assigning a Default Quest® value per share and generating a triAngle Score, which is a relative ranking based on a number of operational
and valuation metrics. These algorithms and value calculations are consistently applied to all the companies included in the Quest® database. Third-party data (including
consensus earnings estimates) are systematically translated into a number of default variables and incorporated into the algorithms. The source financial statement,
pricing, and earnings data provided by outside data vendors are subject to quality control and may also be adjusted to more closely measure the underlying economics
of firm performance. These adjustments provide consistency when analyzing a single company across time, or analyzing multiple companies across industries or national
borders. As the third-party data are updated, the triAngle Score generated by Quest®, and the Default Quest® value per share may change. The default variables may
also be adjusted by the user to produce alternative values, any of which could occur. Additional information about the Quest® methodology is available on request.
Canaccord Genuity Quest® Disclosures
Quest® is at this stage registered in the UK and in the USA, and common law trade mark rights are asserted in other jurisdictions. Quest® is non-independent research
and is a marketing communication under the FCA Conduct of Business rules. All rights reserved. Quest®, CITN®, Companies in the News™, CFROC®, and triAngle™ are
all trademarks of Canaccord Genuity Limited. E&OE. © Canaccord Genuity Limited. For important information and company-specific Quest® disclosures please see
Important Disclosures at the following website (provided as a hyperlink if this report is being read electronically): https://disclosuresquest.canaccordgenuity.com/.
Please note that analyst data and Quest® data may differ due to different sources and calculation methods. The Quest® platform may be found at the following website
www.canaccordquest.com
* Canaccord Genuity and its affiliated companies may have a Corporate Finance or other relationship with the company and may trade in any of the Designated
Investments mentioned herein either for their own account or the accounts of their customers, in good faith and in the normal course of market making. The authors
have not received, and will not receive, compensation that is directly based upon or linked to one or more specific Corporate Finance activities, or to coverage contained
in the Morning Coffee.
Canaccord Genuity is the global capital markets group of Canaccord Genuity Group Inc. (CF : TSX)
The recommendations and opinions expressed in this research report accurately reflect the Investment Analyst’s personal, independent and objective views about any
and all the Designated Investments and Relevant Issuers discussed herein.
Canaccord Genuity (Australia) Limited is the Australian affiliate of global capital markets group Canaccord Genuity Group Inc. (CF : TSX). The recommendations and
opinions expressed in this research report accurately reflect the Analyst’s personal, independent and objective views about any and all the designated investments and
relevant issuers discussed herein.
Wednesday, September 8, 2021
Unless otherwise noted, the above commentary is derived from research published by Canaccord Genuity Corp and/or Canaccord Genuity LLC. For more information, please contact your investment
advisor. For current disclosures, please visit our Online Disclosure Database at http://disclosures.canaccordgenuity.com/EN/Pages/default.aspx.
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