David Olive: Year ends on a high for Bitcoin Fund while pandemic-related uncertainty weighs on TC Energy

Winners

The Bitcoin Fund (QBTC.TO)

Canada’s first publicly traded bitcoin fund made sizable gains this week as demand for the cybercurrency grows as an inflation hedge. The Toronto-based fund has grown to about $ 400 million in market cap since it was launched in April by 3iQ Corp., a digital asset manager with about $ 735 million in assets under management. The stock got a boost with 3iQ’s announcement this week of a $ 150-million (U.S.) offering of additional Bitcoin Fund units. The value of bitcoin soared this year by 220 per cent, to more than $ 23,000 (U.S.), as bettors wager that inflation caused by pandemic government spending will devalue traditional currencies.

Nuvei Corp. (NVEI.TO)

A rising tide for tech stocks lifted shares of Montreal-based Nuvei, a leading online payments firm that went public in September. That initial public offering was the biggest tech IPO in Canadian history, eclipsing those of Shopify Inc. and BlackBerry Ltd., and raising about $ 900 million. The tremendous gains by tech stocks in a pandemic year, in which demand for online services has boomed, accounts for the remarkable strength of the stock market in the recession year 2020. The 17-year-old Nuvei now boasts a market cap of $ 10.7 billion. Nuvei’s global payment verification network is in growing demand as financial transactions shift to an online world vulnerable to cybersecurity risks.

Teck Resources Ltd. (TECK-B.TO)

Teck has gradually recovered this year from the pandemic-related drop in prices for most of the commodities it produces, including coal, zinc, copper and oilsands bitumen. The Vancouver-based company was dealt a further setback with the cancellation of the proposed Frontier oilsands mine in Alberta, in which Teck was a major investor. But the stock has posted a 75 per cent increase in value since the spring, when activist investors were pressuring the firm to change its investment strategy. The composition of Teck’s portfolio is changing, with a plan to double copper production so that it eclipses revenue from coal.

Losers

TC Energy Corp. (TRP.TO)

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TC and its investors have to live with more or less continual government and regulatory objections, real and anticipated, to its varied expansion projects across North America. That accounts for periodic dips in stock value like the decline this week. The former TransCanada Corp. operates one of the world’s biggest pipeline networks, with a footprint of more than 92,000 km of pipelines in Canada, the U.S. and Mexico. Continued pandemic-related uncertainty about oil and gas demand also weighs on the stock. But TC remains committed to its $ 37-billion expansion campaign and to its handsome record of dividend payments. The stock currently has an attractive yield of 6.1 per cent.

Suncor Energy Inc. (SU.TO)

Shares in Canada’s biggest oil producer slipped this week after the U.S. Senate blocked a pandemic-stimulus package. That could postpone a full recovery in the U.S. economy, and restrain oil-demand growth in Suncor’s biggest market. That said, some experts are forecasting a 14 per cent increase in the Brent oil price in 2021, to an average of $ 43 (U.S.) per barrel. And Suncor plans to increase its 2021 oil production by about 10 per cent while cutting cash costs by about 8 per cent. That should boost 2021 gross margins. In the meantime, Suncor dividends boast a healthy yield of 3.8 per cent.

WSP Global Inc. (WSP.TO)

Shares in the Montreal engineering firm slipped this week, taking a time out after surging 17 per cent in value after WSP’s announced merger with engineering firm Golder Associates in early December. The $ 1.5-billion Golder deal, expected to close in January, bolsters WSP’s strength in the geosciences sector, adding market share and geographic reach, notably in Australasia. WSP is already a global firm, providing consulting services to the transportation, infrastructure, environmental, mining and energy sectors in more than 30 countries. With a market cap of almost $ 14 billion, the company is a favourite with institutional investors in Canada and abroad, including sovereign wealth funds.

David Olive
David Olive is a Toronto-based business columnist for the Star.

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