Key points:
- Aerospace
- July Air Traffic + Boeing & Airbus 20-year outlook updates
- Focus List stocks + names to watch
- Defense
- U.S. DoD budget – strategic shift towards modern weaponry and equipment
- Focus List stocks + names to watch
Author: Andrew Kessner
Andrew Kessner is an equity research analyst covering the Cannabis and Capital Equipment sectors. He is a member of the Global Focus List Committee, which approves all equity recommendations for developed, emerging, and frontier markets. Andrew joined the firm in June 2018. He has a B.A. in Economics from Bates College and an MBA from Columbia University.
July 25, 2019 – Cannabis Industry Webinar
A number of issues continue to weigh on cannabis stocks. In Canada, Bruce Linton’s firing from Canopy Growth, the CannTrust debacle, and lackluster sales numbers have driven weakness. In the U.S., antitrust concerns, share unlocks, the failure of adult-use bills in New Jersey and New York, and stricter rules on state-level license caps are among the factors weighing on investor sentiment.
With many cannabis stocks now sitting at or near year-to-date lows, in this webinar, William O’Neil + Co. Research Analyst Andrew Kessner will share his views on the current state of the U.S. and Canadian industries and where he sees opportunities among this volatile group.
Cannabis Industry
Agenda:
• Key issues driving negative sentiment
• Canada review – market data and valuations
• U.S. review – market data, valuations, and stocks of interest
May 16, 2019 – Aerospace and Defense Sector: Key Takeaways from Q1 Earnings
While Boeing’s recent woes have dominated the headlines, the broader aerospace and defense sector has so far posted excellent Q1 results. With earnings season wrapping up, Equity Analyst Andrew Kessner will review key Q1 takeaways from the sector as well as key trends and stocks to watch.
Aerospace and Defense Review
Some highlights from this report:
Q1 results were generally positive across the space.
The crisis at Boeing – and the implications for its supply chain – remains in focus.
737 MAX issues not hugely impactful for most suppliers. While SPR has substantial (>50%) sales exposure to the MAX, other key suppliers are more well diversified: HXL (11% of sales), TGI (8%), ATRO (6%), WWD, (4%), TDG (4%), and UTX (3%).
Next important event for the BA story: May 23 FAA meeting.
Cannabis: Key Developments and Opportunities Webinar — March 21, 2019
The cannabis industry continues to develop at a dizzying pace. In Canada, companies continue to ramp up production capacity for the adult-use market while also pushing into international markets. Meanwhile, American operators are aggressively pursuing M&A opportunities to establish a presence in attractive medical and adult-use states. In this week’s webinar, William O’Neil + Co. Equity Analyst Andrew Kessner will discuss key trends, upcoming catalysts, and stocks of interest in the Canadian and U.S. cannabis markets.
Issues and Opportunities in Global Aerospace and Defense Webinar with Andrew Kessner — January 24, 2019
Concerns about protectionist trade policies and slowing global economic growth are weighing on Commercial Aerospace stocks, while U.S. political gridlock continues to drive investor concern about Defense names. But the sector’s structural drivers remain in place, with expected global GDP growth of more than 3%, rapidly expanding air travel in developing markets, and a global geopolitical backdrop that is broadly supportive of defense spending. In this webinar, William O’Neil + Co. Equity Analyst Andrew Kessner reviews key issues and opportunities facing the sector and stocks that are well-positioned through both a fundamental and technical lens.
Cannabis
2018 was a remarkable year for the cannabis industry, from both regulatory and capital markets perspectives. With the industry’s momentum set to continue in 2019, we highlight several key trends and issues that we think investors should be following in the coming year and beyond.
Global Capital Equipment Sector
We maintain a strong outlook on global Aerospace and Defense due to several key secular tailwinds. In the commercial aviation industry, the global economic recovery, stable commodity rates, and increasing passenger travel demand continue to drive growth. The defense industry continues to benefit from a growing U.S. defense budget and increased defense allocations from major countries in Asia and Europe. The attached deck accompanies Andrew’s webinar on Thursday, September 13 in which he will review key sector trends before highlighting A&D stocks currently on our Focus Lists as well as several stocks of interest.
Cannabis
Some highlights from the report:
The existing global cannabis market is substantial, with more than $50B in estimated annual sales across North America and $150B globally. As medical and adult-use cannabis legalization measures are increasingly adopted around the world, the conversion of illicit demand to regulated channels presents a tremendous commercial opportunity.
Canada leads the way in cannabis, with the country set to commence recreational cannabis sales on October 17. Today, the 10 largest cannabis companies in Canada have a combined market capitalization of more than CAD 25B. While cannabis remains illegal under U.S. federal law, rapidly evolving state-level regulations have created a legal market that generated nearly $8B in sales in 2017, representing 15% of the country’s total market.
In this report, we provide an overview of the market opportunity, the current industry structure, and the near- and long-term outlook for this nascent space. We then examine the universe of cannabis stocks with a focus on what drives them, how they’re valued, and key upcoming catalysts. Finally, we highlight our top pick in the space: Canada-based Canopy Growth Corporation ( WEED.CA ).
