Exploring Strategic Opportunities: Teck Resources Limited (TECK), Smartsheet Inc. (SMAR)

Teck Resources Limited (NYSE: TECK) shares are -33.74% down in the year-to-date (YTD) period and have moved 3.14% or $0.35 higher in the latest trading session. However, stock’s trailing 12-month performance remains nearly +105.54% lower. Comparatively, the stock is -35.23% down YTD and 19.52% over the trailing 3-month period. If we look at the shorter duration, its week performance is -9.23% and 6.08% over the month.

Analyst Recommendations

On April 22, 2020, Citigroup recommended the TECK stock is a Neutral, while earlier, National Bank Financial had Downgrade the stock as a Sector Perform on July 21, 2020.

Earnings Forecast

Analysts estimate the earnings to decrease -2.10% in the current quarter to $1.09, up from the $0.91 reported in the same quarter a year ago. For the current year, earnings should grow to an average of $3.5, up 1.30% from $3.5 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between $0.63 and $1.1. Wall Street estimates earnings per share to be at an average of $2.83 for the next year.

Smartsheet Inc. (NYSE:SMAR), on the other hand, is trading around $52.47 with a market cap of $6.26B and analyst research firms have a positive stance on its shares. Analysts predict that the stock will reach $53.33 and spell out a more modest performance – a 1.61% return. Some analysts are even forecasting -$0.5 per share in earnings this year on a short term (1 year) basis.

Let us briefly look at the Smartsheet Inc. (SMAR) financials, with a focus on its operating details as indicated in its earnings report for the last quarter.

Company balance sheet and cash flow

SMAR’s operating margin was negative on the trailing 12 months basis, remaining steady at -37.20%, while the operating expenses over the recent quarter were at $96.31 million. This represented a -12.66% of the company’s total revenues which amounted $85.49 million. With this in place, we can see that the company’s diluted EPS declined -$0.23 on the year-over-year period, shrinking to -$0.19 as given in the last earnings report.

In terms of the balance sheet & cash flow as of (Jul 2020), the total assets figure advanced to $782.61 million from $797.71 million over the previous quarter. Short term investments amounted to $0.0 while total current assets were at $603.63 million. The cash flow from operating activities totaled -$24.29 million, significantly lower than the -$9.19 million reported in the year-ago quarter. The company’s free cash flow for the quarter was -$27.55 million.

Insider activity

Insiders have transacted a total of 203 times at Smartsheet Inc. over the last 6 months, with insider purchases undertaken 53 times and accounting for 619,784 shares. Insider sales totaled 4,006,262 shares over the same period, with these deals completed in 150 transactions. Looking at these numbers, we realize that net purchases over that period are -97.0 shares. Insiders now hold a total of 7.72M shares after the latest sales, with -14.40% net shares purchased.

Major holders

Insiders own 5.50% of the company shares, while shares held by institutions stand at 86.94% with a share float percentage of 111.97M. Investors are also buoyed by the number of investors in a company, with Smartsheet Inc. having a total of 290 institutions that hold shares in the company. The top two institutional holders are Capital World Investors with over 14.24 million shares worth more than $724.93 million. As of Jun 29, 2020, Capital World Investors held 11.89% of shares outstanding.

The other major institutional holder is Vanguard Group, Inc. (The), with the investment firm holding over 9.71 million shares as of Jun 29, 2020. The firm’s total holdings are worth over $494.23 million and represent 8.11% of shares outstanding.