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Verisk Analytics is a great investment, this investor says – Cantech Letter

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Verisk Analytics

Verisk Analytics (Verisk Analytics Stock Quote, Chart, News, Analysts, Financials NASDAQ:VRSK) has come a long way in its ten-plus years as a public company, but investors shouldn’t be wary of those share price gains as this company has a huge runway ahead of it. So says portfolio manager Brett Girard of Liberty International Investment.

“I think Verisk is a great company to invest in,” says Girard, chief financial officer at Liberty, who spoke on BNN Bloomberg on Monday. “We bought this back in the beginning of 2019 and we continue to hold it to this day.”

New Jersey-based Verisk is in its 50th year as a predictive analytics business, with the company now boasting over 70 per cent of Fortune 100 companies using its solutions to handle risk assessment. The company has segments in Insurance, Energy and Specialized Markets and Financial Services, with its subscription-based services covering fields such as insurance underwriting and claims, fraud, regulatory compliance, natural resources, catastrophes, economic forecasting, geopolitical risks and ESG themes.

“They’re in the data analytic space, and what they’re doing is they’re helping the actuaries that work at insurance companies figure out how better to price risk. And that’s a really important thing going forward because in the past it’s sort of been statistical tables and a lot of work that was by hand or manually done within calculations of databases and things like that,” Girard said.

“But with Verisk, they’re really taking this to the next level and they’re using new technologies. They’re using artificial intelligence to sort through the big data and they’re doing a great job at it,” Girard said. “Not only do they have exposure to the insurance space but they’re also in the financial space and the oil and gas space.”

Verisk has seen its share price steadily head northwards over the past decade since a blockbuster IPO in 2009, going from $27 per share to as high as $207 by late last year. The stock finished 2020 up 39 per cent but is currently down 13 per cent for 2021.

But Girard sees more growth for the stock as Verisk rides the wave of digital transformation and AI-inspired analytics currently taking place across all industries.

“I think going forward, if you believe that having more data is going to allow companies and individuals to make better decisions, which we do, Verisk is a great way to play that,” Girard said.

“It’s something that you could hold onto for a long period of time, given the tailwinds of this big data migration that we’re seeing,” he said.

With the majority of its revenues coming from subscriptions and manifesting in long-term contracts, Verisk has sailed through the COVID-19 pandemic with relative ease. The company reported its fourth quarter and full year 2020 financials in February where it hit $713 million in Q4 revenue, up 5.4 per cent year-over-year, and $344.0 million in adjusted EBITDA, up 7.9 per cent year-over-year. (All figures in US dollars.)

Excluding items, the company’s fourth quarter adjusted earnings came to $1.27 per share whereas analysts had on average been expecting $1.30 per share.

The 2020 year saw revenues climb 6.8 per cent to $2.785 billion and adjusted EBITDA jump a full 12.4 per cent to $1.377 billion. By segment, Insurance revenue grew by 6.5 per cent over the year to $1.986 billion, Energy and Specialized Markets grew by 13.8 per cent to $641.6 million and Financial Services decreased by 12.0 per cent to $156.7 million. The drop in Financial Services revenue was attributed to pandemic-related lower levels of project spend by Verisk’s bank customers.

“Despite the broader economic challenges the pandemic continues to present, Verisk delivered another year of strong organic constant currency revenue and adjusted EBITDA growth in 2020,” said president and CEO Scott Stephenson in a February 23 press release.

“These results demonstrate the resiliency and stability of our business model, the valuable impact of our technology and insights to customers, and the commitment of our more than 9,000 Verisk teammates to support our customers through an unprecedented period of digital transformation,” Stephenson said.

This year’s pullback in Verisk has made for a buying opportunity, according to Deutsche Bank analyst Ashish Sabadra who in early March raised his rating from “Hold” to “Buy” on the stock with a $196 price target, which at the time of publication represented a projected 12-month return of 17 per cent.

Sabadra said now is an “attractive buying opportunity” on Verisk, which he said has a commanding market position in defensive end markets along with secular tailwinds in digitization.

On Monday, Morgan Stanley kept its “Overweight” rating on Verisk but dropped its target from $216 to $201, implying a 12-month return of 12.5 per cent.

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IGM posts record profit in second quarter – Investment Executive

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The firm also reported record-high investment fund sales of $1.9 billion for the quarter, more than doubling the $864-million total a year ago. Assets under management and advisement hit a new high of $262 billion, up 5.4% from the previous quarter and 39.2% from June 30, 2020.

“The result reflects record-high second-quarter client inflows across the companies and continued strong investment returns for our clients,” said IGM president and CEO James O’Sullivan in a statement.

The company’s wealth management business, which comprises IG Wealth Management and Investment Planning Counsel (IPC), reported a $134.3-million profit, up 33.6% from the previous year.

IG’s assets under advisement totalled $112.2 billion, up from $93.8 billion a year ago. IPC reported assets under advisement of $31.2 billion compared to $26.6 billion on June 30, 2020.

IG saw record client inflows of $670 million, compared to net outflows of $62 million a year ago.

Wealth management revenue for the quarter totalled $627.6 million, up from $531.1 million in 2020.

Asset manager Mackenzie Investments saw record investment fund sales of $1.7 billion for the quarter, up from $1.1 billion last year. Mutual fund sales accounted for $1.1 billion compared to $376 million in 2020.

Mackenzie reported mutual fund assets under management of $61.7 billion (up from $60.1 billion) and ETF assets totalling $4.9 billion (compared to $3.1 billion a year ago). If investments in ETFs by IGM mutual funds are included, ETF assets totalled $10.6 billion.

Asset management revenue for the quarter totalled $248.3 million, up from $190.8 million in 2020.

In an interview with Investment Executive last month, Mackenzie president and CEO Barry McInerney pegged alternatives and environmental, social and governance funds as growth areas for the firm.

He also talked about how Mackenzie is addressing the challenge of advisors shrinking their product shelves in response to the client-focused reforms.

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Federal government launches investment blitz to mark first #EVWeekinCanada – Electric Autonomy

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Cross-country investments focus on charging infrastructure, solutions for electric trucks, buses and residential buildings, and breaking down barriers to EV adoption

July was a significant month for government investment in cleantech and zero-emission transportation at the federal level. In all, four different program arms of Natural Resources Canada invested $32 million. The projects ranged from the installation of 853 electric vehicle chargers, to increasing public awareness of zero emission vehicles and improving progress to green transportation planning and infrastructure.

The announcements coincided with the Government of Canada’s declaration of #EVWeekinCanada, a coordinated effort at a policy level to bring awareness to the transition. Quebec, too, offered more government support with over $21 million invested in public charging initiatives through Hydro-Québec.

“EV Week in Canada is about promoting and highlighting the benefits of owning and driving Zero Emission Vehicles (ZEV) in Canada,” wrote a spokesperson from Transport Canada in response to emailed questions from Electric Autonomy Canada about the initiative. “Transportation is the second largest source of greenhouse gas (GHG) emissions in Canada, accounting for a quarter of Canada’s total emissions. Decarbonizing the transportation sector will be essential to meeting Canada’s climate change commitments.”

The funding and programming blitz is a key indicator that the government is gearing up to push adoption and policy in the second half of the year — possibly against the backdrop of a federal election where EVs, reducing emissions and renewable energy could play a pivotal role.

Investment highlights

The menu of federal investments for July was wide-ranging:

  1. $4.95 million to Hydro One Ltd. in Ontario for heavy-duty electric truck charging station development.
  2. $2.5 million for the implementation of a smart charging platform for the Toronto Transit Commission’s electric bus fleet.
  3. $2 million to Opus One Solutions for a project to develop a shared economy model for EV chargers, focusing on residential EV charging impact on local power grids.
  4. $1.32 million to Alectra Inc. for the development of EV charging models for single-family and multi-unit residential buildings that provide affordable and easy access, while managing energy cost increases.
  5. $1.3 million for an enhanced SmartCharge Incentive system to Geotab Inc., with the goal of demonstrating price signals and optimal charge windows for owners of EVs.
  6. $635,000 to Blackstone Energy Services Inc. for a discharge energy system that encourages EV owners to send power back to the grid during peak demand periods. Blackstone are also to assist facility operators with offsetting their power use during such periods.
  7. $310,000 for Calgary and Edmonton to fund the installation of 44 EV chargers. The City of Calgary will partner with ENMAX Utilities and combine to contribute an additional $125,000 for the 20 chargers to be built at major light rail transit stations and recreational centres. Meanwhile, the City of Edmonton is collaborating with EPCOR Utilities to install 24 chargers at 13 different sites near busy recreational facilities.
  8. 170 EV chargers will be funded by $800,000 in British Columbia, which includes 168 Level 2 EV connectors and two fast chargers over the province. The chargers will be ready for use by the public come this winter.
  9. An additional $1.2 million will fund cities across the province to install 98 more EV chargers. 7-Eleven Inc. is one of the businesses that will benefit, as they plan to install six fast chargers at its stores in Vancouver, Langley, Abbotsford, Kamloops, Kelowna and Victoria.
  10. Finally, through a combination of federal and provincial funding, Quebec will see 215 new EV fast chargers installed by December 2022 due to a $9.4-million investment to Hydro-Québec, which is also contributing more than $10 million to the initiative. A related investment of over $3 million is also going to the utility to tackle barriers to EV adoption.

Minister of Natural Resources Seamus O’Regan Jr. said in the press release announcing the initiatives, “We’re giving Canadians the greener options they want to get to where they need to go. We’re building a coast-to-coast network of electric vehicle charging stations from St. John’s to Victoria. This is how we get to net zero by 2050.”

Investing in future challenges

One of the unique elements of the funding announcements is the commitment to heavy-duty electric truck charging. It’s one of the first major federal signals it is anticipating a swift transition with a need for significant infrastructure.

In Ontario, and like other utilities, Hydro One has a massive task ahead of it: charging large batteries that long-haul trucks need in order to become fully-electric. It will also have to account for the need to do so in a quick and efficient manner, while still managing the demand on the grid.

The federal investment of nearly $5 million will help fund charging solutions to yield greater carbon reductions in the commercial transport sector.

Hydro One senior vice-president, strategy and growth Jason Rakochy said of the electric truck charging station model, “We’re integrating sustainability practices into all aspects of our business as part of our vision for a better and brighter future by developing innovative solutions such as our electric heavy-duty vehicle pilot to help achieve net-zero emissions by 2050.”

Similarly, local grid demand will also have to be accounted for by Opus One Solutions as it investigates residential EV charging using $2 million in public funds.

Opus One’s mission is to build out smart grids in order to manage charging loads from public adoption of EVs. Using grid management software, the company is aiming to create harmony between grid battery storage, renewable energy and vehicle-to-grid draw-and-storage capabilities. Opus One emphasizes energy planning and off-peak charging to help balance the grid in an EV-centric future.

That’s where the investment in Geotab’s SmartCharge Incentive system — a program tied to Geotab Energy, launched in early 2021 — comes in.

Geotab Energy “arms utilities and electric vehicle owners with advanced electricity demand-management solutions” according to company materials. The mission is to determine how best to communicate off-peak price signals to EV drivers, whether it be through the property owner of the charging station, workplace or the homeowner.

While figuring out the times when both the price and demand on the grid are lower isn’t materially different from Time of Use (TOU) patterns that exist with current electricity plans, grid conditions do change. This makes communication “to bridge sustainable transportation with sustainable energy” all the more important, says the company.

Geotab Energy is primarily focussed on facilitating more efficient and fast communication between utilities and their customers and it has developed a SmartCharge Reward program to incentivize EV drivers to charge at beneficial times for the utilities.

Knocking down barriers

In order to tackle obstacles to EV adoption, the combined government investment in Hydro-Québec will allow the public utility to test ultra-fast new-generation charging stations. The goal is to assess technologies from different manufacturers under real-world conditions. Critical information will be collected and the utility will learn more about the strength of the power grid’s infrastructure.

“[W]e deployed our 500th rapid-charging station, and we are moving toward more than 2,500 rapid-charging stations by 2030 so that electric vehicle drivers can travel with peace of mind throughout Quebec,” said France Lampron, director of transportation electrification at Hydro-Québec in a press release.

So far and in total, Canada has invested over $1 billion in EV incentives and infrastructure as the country pushes toward 100 per cent new EV sales by 2035.

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Sooke poet publishes narrative poems – an investment in life's third chapter – Vancouver Island Free Daily – vancouverislandfreedaily.com

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It started with a bookmark from the Sooke Writer’s Collective at the local library.

“Interested in being part of a writing group?” it asked. Clare Winstanley was, so she called the number on the bookmark and has been a member ever since.

Winstanley has written poetry her whole life, but only since joining the group did she share them. Mid-pandemic, the poets of the collective decided to self-publish a chapbook. Winstanley contributed poetry and illustrations and enjoyed the whole thing so much she decided to do a solo project.

Bits of String and Thread: a tapestry of poemsis a collection of 17 narrative poems, drawings and photographs the semi-retired tutor self-published this summer.

As writing has taken centre stage in her life – she’s working on a novel right now – Winstanley wants to tell other adults to revisit the hobbies of their youth.

“As we mature, and perhaps finished taking care of families, perhaps a money-earning career becomes less central, we can invest in the second or third chapters of our lives and pick up things we had given up,” she said.

“It’s time to go back now and complete the things you started when you were younger.”

ALSO READ: Award winners revealed for Sooke Fine Arts Show

She said that her poems are layered with history, often going back in time, and they’re best read aloud.

“My aim as a poet is to create an effect with the sound of the words.”

Winstanley will read a selection of her poetry on Aug. 27 at 6 p.m. at the Sooke Arts Council Gallery at the corner of Church and Sooke roads. It’s a free event and can accommodate up to 25 people. The book is available for $15 at the gallery or through her website cemwinstanley.com .


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