KeyStone’s Stock Talk Show, Episode 215.


Great to be back with you this week. We truly have a packed show.


We kick off the show with Aaron discussing investing in gold royalty stocks and examining the fundamentals of 6 of the more well known and profitable, gold royalty stocks in North America. In the discussion we include Franco-Nevada (FNV: TSX), Wheaton Precious Metals (WPM: TSX), Royal Gold (RGLD: NASDAQ), Osisko Gold Royalties (OR: TSX), Triple Flag Precious Metals (TFPM: TSX), and Sandstorm Gold (SSL: TSX). I will take a listener compliment on Hammond Power (HPS.A:TSX) and answer their question on a listener question AirBoss of America Corp. (BOS:TSX) which develops, manufactures, and sells high-quality proprietary rubber-based products such as rubber compounds, rubber footwear, hand wear, gas masks, anti-vibration automotive components, and other industrial products. A pandemic star which spiked to the $46 range in December 2021 on the back of Personal Protective Equipment (PPE) contract wins from the US government, now trades in the $7 range as these windfall contracts wind down. I will answer whether we finally see value or if the slide can continue. Following new that the PGA Tour merging with the Saudi ran Public Investment Fund (which owns LIV Golf), Brennan, and I stress, him alone,  thought that it would be interesting to look at some Golf Specific Stocks. In the crosshairs this week are Acushnet Holdings Corp. (GOLF:NYSE), which owns the Titleist Golf Brand known worldwide for their balls. The second company, Topgolf Callaway Brands Corp. (MODG:NYSE), owns the Callaway Golf brand, and acquired the popular Top Golf Driving ranges for $2 billion in 2020. Brennan let’s you know if he can marry his passion for the sport with a great investment opportunity. Finally, Brett will handle our Star and Dog segment. Our Dog of the Week is Tenet Fintech Group (PKK:CSE). Tenet is a fintech technology services provider which operates in both Canada and China. The stock has fallen roughly 66% to $0.13 over the past month – Brett let’s you know what has hit this former high flying micro-cap. Our Star of the Week is Adobe (ADBE:NASDAQ). Adobe is one of the largest and most diversified software companies in the world. Adobe has risen over 40% in the last month – is it AI, better financials or what else is driving the stock. Brett will fill you in.


We just released a Special Report for our US clients – reviewing roughly 3,000 US stocks with a market cap of under $2 billion – making 2 new recommendations as well as compiling a High Conviction Monitor list of 6-8 stocks we a relooking to add to coverage over the next week.


Deirdre via email

I would like your Take on Airboss of America (BOS:TSX) & Algoma Steel (ASTL:TSX)


I want to let you know that I purchased 200 shares of HPS.A-TSX Hammond, back on Feb.10th, of this year, so I just want to thank you all at Keystone. I believe that this stock will be another BYD-TSX…..too high for me to buy at this time.


Thank you for your upcoming advice, and much appreciation.

June 6, 2023


Hammond Power – has been a tremendous success story from our Canadian Growth Stock Research. Hammond enables electrification through its broad range of dry-type transformers, power quality products and related magnetics. Basic, boring business with huge growth that traded at very low valuations, eve to start this year. The stock is up 138% year to date and 435% since the start of 2022.


It is a great example of our research because there has been no other research firm with coverage on the stock over the last decade – and back even further. Hammond Power is literally the best performing, revenue producing stock on the Toronto Stock Exchange, and not one of the Big Banks, Brokerages, or boutique investment houses even bothered to cover it. Despite tremendous growth and a great investment theme.


Why? I will let you in on a little secret. Banks make their money from conducting financings for public companies. Hammond Power did not need capital, and the Street ignores it. So, if you are a client of the Big Banks, you would not have known about this stock. It is up over 4,500% in the last two decades – but you would never see it on BNN or in your portfolio…unless you used our research.


Is it the next Boyd? Perhaps, but it still has a long way to go to get to 10,000+ percent gains that Boyd has produced.

AirBoss of America Corp. (BOS:TSX) 

Price: $7.13

Market Cap: $193.441 Million

Company Description: Airboss develops, manufactures, and sells high-quality proprietary rubber-based products such as rubber compounds, rubber footwear, hand wear, gas masks, anti-vibration automotive components, and other industrial products, offering enhanced performance and productivity to the transportation, military, and industrial markets. The company sold Personal Protective Equipment (PPE) to the US government during the Pandemic – essentially specialized clothing or equipment worn by an employee for protection against infectious materials.

Surge in Sales & Profitability During Pandemic 

AirBoss stock was a beneficiary of pandemic-era, non-competitive U.S. government contracts for PPE. The contracts are now likely one-time in nature, and any future contracts will be more competitive if signed meaning they will not likely show the profit margins during the pandemic when it was a question of just getting the product without any question of cost. These contracts led to a massive spike in EPS from 2019 at $0.55 per share to $1.49 in 2020 to $1.54 in 2021, but as the contracts rolled off, earnings cratered to a loss of ($1.26) in 2022.

Q1 2023 Financials

  • Revenues decreased by 19.0% to $117 million.
  • Adjusted EBITDA for Q1 2023 decreased by 47.6% to $10.32 million.
  • EPS was $0.05 in the quarter down from $0.35 in Q1 2022.

Balance Sheet:

Cash: $16.6 million

Debt: $16.97 million.

Net debt: $122.35 million.

Net debt to TTM EBITDA ratio of 2.99x as at March 31, 2023. OK, but not spectacular particularly in a rising rate environment with profitability decreasing.


Forward PE: Based on expected 2023 EPS: ~23.

Expected to see a jump in 2024 earnings, but this may be overly optimistic if the economy sees the macro headwinds many expect at some stage.

Our Take:

It was somewhat encouraging to see Airboss’s profitability in the Defense segment rebound in Q1 after two consecutive quarters of lacklustre margins, with the division reporting adj. EBITDA of $4.1 million compared to a loss of $(1.5) MM and $2.4 MM in Q4 2022 and Q3 2022. However, the debt level is high for a business of Airboss’s size and cuts ito profitability and with little revenue growth expected in 2023 and into 2024 at present (outside new )the path to a higher share price appears to be margin improvement. While this is a positibility and it could drive the share price higher, we like to pair profit growth with revenue growth as, in tandem, the two are a more sustainable path to driving consistent profit growth long-term which drives share prices higher over years not just a one year rebound. At this point, we just MONITOR Airboss as the growth does not match our criteria.




With the recent news of the PGA Tour merging with the Saudi ran Public Investment Fund (which owns LIV Golf), I thought that it would be interesting to look at some Golf Specific Stocks as there has been a lot of attention on the sport lately.

The Drama: 

This is how things played out:

  • SLIDE 1 – In 2022 Greg Norman (a legendary golfer) launched the Saudi-funded LIV Golf League and poached some of the PGA Tour’s biggest stars with guaranteed contracts worth as much as $200 million. And just to get the league going, the Saudi Public Investment Fund (PIF) invested more than $2 billion in 2022.
  • SLIDE 2 – This led PGA Commissioner Jay Monahan to suspend multiple players for competing in LIV Golf tournaments and led LIV players to file an antitrust lawsuit against the PGA Tour, alleging it was using its monopoly to squash competition. And this led to the PGA Tour to countersue, accusing LIV Golf of interfering with its player contracts…
  • SLIDE 3 – A Wall Street investment banker who is on the PGA ‘s Board, named James Dunne III, ended up reaching out directly to Yasir Al-Rumayyan, the governor of the sovereign wealth fund…. And after months of positive discussions they drafted a deal..
  • So according to the agreement Jay Monahan (the commissioner of the PGA Tour) will oversee the PGA Tour and the LIV Golf League, and the PGA Tour will now control a new yet-to-be-named for-profit entity, which “combines Saudi’s Public Investment Fund’s golf-related commercial businesses with the commercial business and rights of the PGA Tour”.

Now it is really going to be interesting to see how things play out, especially since the PGA Tour has always been a non-profit organization… and now both the PGA Tour and the Saudi Public Investment Fund are coming together to fund a for-profit-entity. But just this past Monday, the US Senate opened an investigation into the PGA Tour-LIV Deal… so it will be interesting to see if anything comes from their investigation.

Sticking on the theme of golf, I thought I would compare two golf related stocks which both sell clubs, bags, golf balls…. basically everything and more that a golfer could need.


The first company Acushnet Holdings Corp. (GOLF:NYSE) – owns the Titleist Golf Brand which is a premium company, as many of their products (especially their golf balls) come at a premium. The other company is Topgolf Callaway Brands Corp. (MODG:NYSE), which owns the Callaway Golf brand, and acquired the popular Top Golf Driving ranges for $2B in 2020.


Acushnet Holdings Corp. (GOLF:NYSE)Topgolf Callaway Brands Corp. (MODG:NYSE)
Market Cap.$3.4B$3.6B
Dividend Yield1.55%Suspended Div. 2020
Balance SheetNet Debt $772MNet Debt $3.68B
Net Debt-to-EBITDA (FWD)2.2x5.5x
Revenue (Q1 2023)$686.3M (13% Y/Y)$1.17B (12% Y/Y)
EPS$1.37 (25% Y/Y)$0.13 (-70% Y/Y)
FY2023 Guidance

Rev: $2.35B (6% Y/Y)

Adj. EBITDA: $355M (5% Y/Y)

Rev: $4.445B (11% Y/Y)

EPS: $0.66 (-19% Y/Y)

Adj. EBITDA: $633M (13% Y/Y)

Forward Valuations


P/E 17x (Analyst Estimates)


P/E 29.8x


All in all, I don’t know if I would say that either company is very attractive. Fundamentally, Callaway is projecting better growth but is significantly more levered than Acushnet and trades at relatively pricey multiples. While Acushnet has posted better profitability, is projecting lower growth, is less levered, and actually has a nice dividend yield and has grown that dividend over time. Qualitatively though, Callaway is the more intriguing name, as it has better growth levers such as Top Golf – which is gaining a lot of attraction – and the company is diversifying into sporting wear as well. But at this point, given the mature nature of the golfing industry, and Acushnet’s better fundamentals, I would probably go with Acushnet.

Dog of the Week

Our Dog of the Week is Tenet Fintech Group symbol PKK on the Canadian security exchange. Tenet is a fintech technology services provider and operator of Cubeler Business Hub, which gives small to medium size businesses access to financing, advertising, networking, and business intelligence tools,  the company operates in both Canada and China.

The stock has fallen roughly 66% to $0.13 over the past month leaving the company at a market cap of $13 million. This recent downfall was a continuation of the share price falling since its high in September of 2021 of $13.60, from which the stock has fallen over 99%, making even cryptocurrencies blush.

So what has caused the utter collapse in share price?

Looking at the past year, the company saw a massive decrease in revenue, from $34.7 million in Q1 2022 to only $9.5 million in Q1 2023 effectively quartering the revenue. As well net loss increased to $8.7 million from a loss of $3.4 million.

Barring one quarter in 2021,  the company has been continuously GAAP unprofitable, so all the valuation is effectively coming from growth, to see even slowing growth will hit the share price of a company relying on growth, whereas this was just the evisceration of investors’ financial hopes.

But that’s not the end of the bad news.

At the end of April, the board removed the now-former CEO, Johnson Joseph.  Who has been accused of market manipulation of Tenet’s share price from April 2020 to November 2021, which includes the period of the stock’s all-time high.

The removal of Mr. Joseph has caused a proxy battle for the company between the board and Mr. Jospeh.

But wait, there is more bad news,

The company is short cash for payroll, so it is raising money through a private placement for up to $3.0 million.

So, collapsing stock price, disintegrating revenues, squabbling management teams, and no cash to even run the company, which solidifies Tenet as our Dog of the Week.


Star of the Week

Our star of the week is Adobe symbol ADBE on the NASDAQ. Adobe is one of the largest and most diversified software companies in the world. The company offers a line of products and services used by creative professionals for photo editing, video editing, graphic design, game design, and more.

Adobe has risen over 40% in the last month to roughly $475 and a market cap of 218 billion.

The sharp rise in price occurring over the last month can be attributed to AI. Unlike many companies which have effectively just rebranded using the terms big data or machine learning to AI, Adobe is implementing generative AI, which has caught the attention of the market.

Adobe released its Photoshop generative AI beta last month and had previously released adobe firefly. And is implementing generative AI actively in its other products.


For example, we can take a picture of Ryan, and maybe he looks too professional in his suit, so we give him a jean jacket.

Or maybe show him on his non-existent white water rafting trip.

The point is this is a genuinely useful tool for creators derived from AI that already exists, so it is no surprise that the market has run the stock price up given the significant hype around AI. We’ve looked at Adobe before, and one of the concerns is if they are able to keep their market share strong as cheaper and free alternatives appear for users, implementing AI tools maintains their software moat.

Adobe does release its Q2 results later this week, so we will see if the AI hype has begun to materialize financially, but for now, it’s our Star of the Week.


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