KeyStone’s Stock Talk Show Episode 251. 


Great to be back in the saddle after a successful research trip to Las Vegas.  To start the show I will hit the viewer mailbag to answer a question Cargojet Inc. (CJT:TSX),  which provides time-sensitive overnight air cargo, all-in charter, and ACMI services through its fleet of 35 aircraft. The stock has been a long-term Canadian success story but is well off its 2021 highs and a viewer asks if the current slump is a long-term opportunity. Aaron takes a look at Meta Platforms, Inc. (META:NASDAQ), which has had a volatile month after a very strong rebound year. Meta, formerly known as Facebook, is a leading social media and technology company. Aaron takes a look at the stock in light of its recent quarterly numbers which were strong, but its forward outlook felled the stock. Brennan reviews a company we interviewed in Las Vegas this past week, Byrna Technologies Inc. (BYRN:NADAQ), a non-lethal defense technology company that offers handheld personal security devices and shoulder-fired launchers; and projectiles including chemical irritant, kinetic, and inert rounds. Brennan let’s you know how they screened from our management interviews. Finally, Brett answers a viewer question on Wajax Corporation (WJX:TSX), a diversified industrial products and services provider. The viewer asks if it is a good time to buy this stock which provides a 5% yield.


Let’s get to the show – we welcome my cohost, Mr. Aaron Dunn and the killer B’s, Brett, and Brennan.


Stock Price$121.00
Market Cap$1.98 B


What does Cargojet do?

Provides time-sensitive overnight air cargo, all-in charter, and ACMI services through its fleet of 35 aircraft that carries payloads of 80,000 to 125,000 lbs. For those unaware (and that should be most of you) ACMI services, also known as damp or wet leasing, is an agreement between two airlines, to provide an aircraft, crew, maintenance and insurance.


CJT operates the largest Canadian domestic overnight air cargo network, spanning coast to coast. The company operates out of its main base at John C. Munro Hamilton Airport and currently employs approximately 1,800 employees.


Cargojet Inc all time chart back to February 2011 – excellent long-term growth.

Cargojet Inc


Decent performance – but not without some challenges and the stock certainly moved off from its highs.

10 Year revenue and Operating profit track record…


Not surprisingly – the revenue and profitability tracks the stock price performance for the most part – strong growth in revenues from $192 million in 2014 and operating income of $4.9 million to $979 million in revenues with an operating profit of $172.9 million in FY 2022. As revenues and operating profit have moved lower over the past 2-years, so has Cargojet’s share price.

Let’s take a look at the most recent quarterly results….


Q1 FY 2024 Highlights

Total revenue was $231.2 million compared to first quarter 2023 revenue of $231.9 million.

Adjusted EBITDA for the quarter was $78.4 million compared to the first quarter 2023 Adjusted EBITDA of $75.0 million.

Net earnings for the quarter were $32.5 million (net earnings of $20.8 million excluding warrant valuation and contract asset amortization) compared to net earnings of $30.5 million in 2023 (net earnings of $9.8 million excluding warrant valuation and contract asset amortization).

Q4 net cash from operating activities grew 22% over the prior year period and free cash flow grew 29% over the prior year period

Generally, TFII is experiencing a period of weaker freight demand but capitalized on its solid cash flow by significantly investing $2 billion of capital during 2023 into announced acquisitions and share buybacks.

Balance Sheet:


Cash: $19.9 Million.

Debt: $674.5 Million.

Net Debt: $654.6 Million.

Net Debt/EBITDA 2.6x.


E EV/aEBITDA (TTM): 8.7x.

EV/aEBITDA (FY 2024e): 8.2x.

PE (TTM): 55x.

PE (FY 2024e): 24x. 

Near-term Cautious Outlook: 

A robust economy aids growth for Cargojet – as far as the current Volume outlook –  the hesitancy seen in consumer spending experienced in Q1 2023 has improved somewhat into 2024.

However – Management remains cautious, given the increasing geopolitical uncertainty and potential for supply chain disruptions.

Valuations are improving, but with the stock trading at 25x expected 2024 earnings and limited revenue growth expected, the stock is fully valued at present.

Byrna Technologies Inc. (BYRN:TSX)

Price: $14.02

Market Cap: $305.8 Million.

Company Description:

Byrna Technologies is a non-lethal defense technology company that offers handheld personal security devices and shoulder-fired launchers; and projectiles including chemical irritant, kinetic, and inert rounds.

Slide #2

I interviewed the CEO, Bryan, last week in Vegas, and he gave me a good run-down on the history of the business. So just to catch everyone up to speed, Byrna went live selling its Byrna hand launcher in July 2019, and was selling a few kits per day. And they started getting traction after they paid some YouTubers to review the gun which increased website sessions and sales.

But what really gave them a dramatic boost in traction was when Sean Hannity from Fox News endorsed Byrna on his show, but given the supply chain difficulties following 2020, the company was having difficulties fulfilling orders.

And at the end of Q1 2023, they got notified by Facebook and Google that they could no longer advertise their non-lethal launchers on these platforms, so as you can see from the image on the screen, website traffic took quite a hit in Q2 and Q3 2023.

But they pivoted with a focus on celebrity influencers to spread the word of their products. And on top of Sean Hannity, they got successful partnerships with Judge Jeanine Pirro, Bill O’Reilly, and Glenn Beck which have delivered return on ad spend (ROAS) of more than 5X.

Slide #3

Looking at the financials, its also important to note that the company sells direct to consumers, and also to law enforcement agencies, but a majority of revenue comes from direct to consumer channel.

And looking at the last quarter which was Q1 2024:

  • Revenue was up 98% to $16.7M – which was driven by the advertising strategy change made last September.
  • Adjusted EBITDA was $1.2M compared to a loss last year.
  • Net Income was a gain of $17,000 compared to a loss of ($2.2M) in Q1 2023. But if we look deeper, the only reason for the GAAP Net Income was essentially due to a gain of $280,000 in interest income.
  • CFO was a gain of $3.9M compared to a loss of ($3.4M) for the same period last year.

And looking at the valuations, trailing twelve-month EPS and Adj. EBITDA were negative, so on a price-to-cash flow basis the stock trades at 27.8 times.

Slide #4

Looking at the balance sheet, it remains very healthy with $22.4M in net cash which equates to about $1.02 net cash per share.

When I asked management about the potential use for cash they said possibly for opening up more stores (as they opened up a Byrna store in Las Vegas which has had good success) or possibly adding more capacity.

Slide #5

Overall, I think that Byrna has good trajectory in its financials, the business is growing its revenue via celebrity endorsements, has been cash flow positive in the last few quarters, is just about breakeven on a GAAP Net Income basis, and possesses a strong cash rich balance sheet.

The company has continued opportunities selling to law enforcement agencies and it is also bringing on a new Compact Launcher product which could appeal to more consumers.

Some risks that I would like to highlight is that right now sales growth is reliant on successful celebrity endorsements, and given the company is potentially looking to open ip more Byrna retail stores, this is a risk if the store fronts are less successful than the Byrna store in Las Vegas.

Again, I like the trajectory of the business, it is a little early for our GARP investment strategy, but is certainly a name that I will continue to follow and hopefully interview Bryan again at a future date.



Wajax symbol WJX on the TSX is a diversified industrial products and services provider. The Corporation operates an integrated distribution system providing sales, parts and services to a broad range of customers in diverse sectors of the Canadian economy, including construction, forestry, mining, industrial and commercial, oil sands, transportation, metal processing, government and utilities, and oil and gas.


The stock is currently trading at 27.89 and has a market cap of $610 million. The stock is trading down 7.5% year to date.

The stock was performing well, trading up to $34 but the Q1 earnings caused a sharp price decline.

The stock does offer a solid dividend yield of 5.0% at the current price.


Let’s look into the Q1 earnings and why the stock declined.

Revenue declined 6.5% to $482 million from $516 million. Management notes that the fall was due to the decline in construction and forestry equipment sales in both Western and Eastern Canada. Notably other segments outside equipment sales, product support, parts, Engineered repair service and equipment rental are all materially flat.

Gross profit margin increased to 22.0% from 20.4% due to a beneficial product mix with higher margins.

Notably, SG&A increased 4.3% to $79.3 million from $76.0 million or 16.4% and 14.7% of revenue respectively.

Adjusted EBITDA decreased 5.3% to $40.7 million from $43.0 million.

Net income decreased 15.8% to $14.7 million. EPS decline 16.5% to $0.68 from $0.81.

On the upside, backlog did increase by $33.1 million or 6% to $587.1 million since the start of the year and 10.6% since Q1 last year.

Overall, in a weaker quarter, industrials are cyclical and sensitive to macroeconomic changes like interest rates and overall economic growth. The company has stated less cyclical industries are a core element of its growth strategy, but for now, it is still sensitive to cyclicality.


Shifting to the balance sheet.

Debt has grown to $356 million with additional leases of $186 million and cash of $2 million, cash levels are always low as the company commonly uses financing for normal operations. Debt levels since the end of last year were only $330 million so since the start of the year, we have seen higher debt levels and lower EBITDA.

The result is the company’s leverage ratio which does not include leases is at 2.2 times which is out of management’s target range of 1.5 to 2.0 times.

The core reason has built up during the last quarter, inventory has increased 18.4%, $116 million to $747 million from $631 million at the end of last year. The increase was in part due to an early delivery of heavy equipment to get preferred payment terms. Management does state it expects shipments to increase as the backlog has increased as well over the next two quarters and largely revert its inventory build-up. The company did launch a new financing program on March 1st, which has been gaining momentum and is expected to aid in sales.


A quick look at the dividend,

Wajax has begun to grow its dividend over the last 2 years and currently pays $0.35 quarterly resulting in a 5.0% yield. The trailing payout ratio for net income is 36% which is a maintainable level, and a significant downturn would need to occur to pose a dividend risk. That being said the company has previously had a more volatile dividend but the last decade has been stable with recent growth.


Moving to valuations,

Wajax trades at a trailing P/E of 8.0 times, and an adjusted EV/EBITDA of 7.1 times. Industrial equipment and services never trade at a premium and given the recent weakness, even if only temporarily the stock is probably near fair value for the time being.



The recent drop in the stock is justified, but has a chance at recovery if management is able to move inventory which in turn will lower the leverage of the company. The valuation is not overly appealing at this time, but the dividend is very likely safe given the current conditions. Wajax is at the whim of the cyclical industries it supports which when coupled with debt can create volatile financials and add risk. For now I would hold off on Wajax but if the inventory is able to move in the next couple of quarters allowing for lower leverage it could become more interesting.



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