As we welcome the fall season and Thanksgiving, it's a good opportunity to take stock of what’s important. In this edition, we’ll share valuable insights and updates on various topics around Canadian companies and market activity. We hope you enjoy the content and have a pleasant Thanksgiving with family and friends!

Our newsletter will focus on the following topics:

Market Movements
Alimentation Couche-Tard Eyes 7-Eleven Acquisition
Election Time!
Spotlight on De Havilland Aircraft
Battery Storage Initiatives

Market Movement

This quarter saw a bit more volatility in the market than we have seen over the last 12 months. Similar themes kept on popping up: AI & Technology, Interest Rates, Inflation, US election etc.. For some of you that only check your account values when statements arrive, this volatility would have gone unnoticed, because most of the fluctuation came intra month, then recovered before month end when statements were printed.

This highlights the importance of having a longer viewpoint when looking at your portfolio! There will always be bumps along the way, however in our experience, well run companies tend to come out in front during these periods. As of this writing, US and Cdn stock markets are at an all time high.

For the first time in over 4 years, both Canada and US started dropping interest rates. As we have written in the past, both the US and Canada wanted to keep rates higher for longer, to try and avoid inflation from roaring back. So far, it would appear as though their plan has worked.

Overall, this year has been stellar from a return point of view. Over the next 3 months we would presume returns to be modest and expect to see similar or heightened amounts of volatility as the US election nears. It’s important to note, that despite all the rhetoric from either candidate, US presidents typically have little impact on the stock market when you look at the performance throughout the entirety of their term.

Alimentation Couche-Tard Eyes 7-Eleven Acquisition

Iconic Canadian company Alimentation Couche-Tard is making headlines with its recent bid to acquire Seven & I Holdings, the Japanese owner of 7-Eleven. Starting 44 years ago with just one store in Laval, Couche-Tard has grown exponentially, now operating over 16,700 convenience stores across North America, Europe, Africa, and Asia. The company has a proven track record of successful acquisitions, including the Mac’s Milk brand and the Circle K stores you may have seen in your community.

The bid to acquire Seven & I Holdings, which oversees more than 84,000 stores globally, presents exciting opportunities. In Japan, 7-Eleven locations offer much more than traditional convenience items; they provide a variety of boxed lunches and fresh food, catering to local preferences.

However, the acquisition process is not without challenges. Couche-Tard must negotiate a suitable price with Seven & I Holdings and address regulatory concerns in multiple countries. If successful, this acquisition would mark the largest purchase of a Japanese firm by an external company.

We currently hold shares of Alimentation Couche-Tard (ticker ATD) for some of our clients, and we’ll be watching this development closely as it unfolds!

Election Time!

It’s that time again! We head to the polls on October 19th—this time, it’s about our own local election, not the never-ending saga in the U.S.!

A compelling article from Bloomberg in July sheds light on the challenges we face in British Columbia. Since 1980, our population has doubled to about 5.6 million, with roughly 10,000 newcomers arriving every 37 days. Our economy has been growing faster than the Canadian average, but this rapid growth brings its own set of challenges.

Historically known for our rich resources—fruit, timber, metals, and coal—BC is now also a hub for talent in various sectors. Vancouver ranks as the third-largest film and TV production center in North America, following LA and New York.

Major companies like Microsoft and Amazon have established offices here, significantly increasing the demand for technology specialists.

However, the pace of infrastructure development has not kept up with this growth. We face significant shortages in housing, schools, and power supply. Additionally, there's a lack of skilled tradespeople needed to build this infrastructure, alongside shortages of medical practitioners and teachers.

Other pressing issues include the carbon tax, rising crime rates, homelessness, and drug-related challenges. As expected, the political landscape is filled with finger-pointing between provincial and federal politicians as they navigate these complex issues.

As we approach election day, it’s crucial to consider how these factors will influence our future and the choices we make at the polls!

Spotlight on De Havilland Aircraft

When discussing airplane manufacturers, names like Airbus and Boeing often come to mind. However, on a recent day, we stumbled upon two intriguing articles from Bloomberg and BBC News focusing on the remarkable contributions of De Havilland.

As our world warms, the demand for effective firefighting solutions grows, and one Canadian aircraft is stepping up to meet that need. De Havilland acquired the rights to produce a new version of the Canadair water bomber from Bombardier in 2016. This aircraft has caught the attention of European Union countries, which have collectively ordered 22 units. With the ability to scoop up 6,137 liters of water in just 12 seconds from lakes or seas, it's considered the most efficient option for combating forest fires.

For more details, check out the Bloomberg article here.

In another development, De Havilland's Twin Otter—originally designed for bush flying in the 1960s—is still in production today. The BBC article highlights the preparations for the British Antarctic Survey’s (BAS) annual flight from Canada to Antarctica. One BAS pilot describes these planes as “overengineered, adaptable, and rugged.” With their ability to operate on skis, floats, or tundra tires, they can access remote areas that other aircraft simply cannot.

This journey involves 55 hours of flying over 12 days, covering 13,700 km without a pressurized cabin, with all parts made in Canada—a key reason for the flight's origin.

Once in Antarctica, the Twin Otters support a range of activities, from airborne research to delivering fuel and supplies to isolated locations.

You can read more about this incredible journey in the BBC article here.

We thought these coincidental reports on two Canadian aircraft were worth sharing, showcasing the innovation and resilience of De Havilland in addressing contemporary challenges.

Battery Storage Initiatives

The economist reviewed new advancements in battery storage that we found interesting. Researchers are working on new ways to improve key internal parts of batteries—such as the anodes, electrolytes, and current collectors—to make battery power more efficient and longer-lasting.

Anodes are one of the two electrodes in a battery. They store lithium ions during charging and release those ions to create electrical energy during discharge. They have traditionally been made from graphite, but silicon is becoming a better option as it can store more energy. Silicon has had its challenges as it can expand and crack when it absorbs lithium ions. To solve this, new materials are being developed that mix silicon with carbon to limit the swelling. This could make batteries hold 20-50% more energy, lasting longer between charges.

Electrolytes are the liquid or gel substances inside the battery that allow lithium ions to flow between the anode and cathode, making the battery work. New electrolyte formulas can work better in extreme temperatures, allowing it to maintain function at -40°C. In addition, charging can happen at temperatures above 60°C before it impacts the health of the battery. This is especially important for electric vehicles and energy storage systems in a warming climate.

Current collectors are thin sheets inside the battery that help transfer the electrical energy generated by the battery to the circuit of the device. New 3D structures allow better contact with active materials, improving how efficiently the battery works while increasing its lifespan. Estimates are it can double the charging cycle compared to the conventional current collectors, before battery health is affected.

These advancements aim to make batteries store more energy, charge faster, and last longer, helping push current lithium-ion technology further.

Source: https://www.economist.com/science-and-technology/2024/09/19/new-battery-designs-could-lead-to-gains-in-power-and-capacity

We wanted to wish everyone a Happy Thanksgiving. As we embrace the beauty of fall and the season of gratitude, it’s a perfect time to appreciate the moments we share with loved ones and the community around us. Wishing you and your family a warm and joyful Thanksgiving!

As always, if you have any questions, please don’t hesitate to ask.

Travis Kidson, B.Sc, CFP®, CIM®
Portfolio Manager | iA Private Wealth
Insurance Advisor | iA Private Wealth Insurance Agency
700-609 Granville St. Vancouver, BC
p: 604 895 3486
travis@beaconwealthpartners.ca

Jack Fournier B.Sc, FMA, CIM®
Portfolio Manager | iA Private Wealth
Insurance Advisor | iA Private Wealth Insurance Agency
700-609 Granville St. Vancouver, BC
p: 604 895 3348
jack@beaconwealthpartners.ca

This information has been prepared by Travis Kidson and Jack Fournier who are Portfolio Managers for iA Private Wealth Inc. and does not necessarily reflect the opinion of iA Private Wealth. The information contained in this newsletter comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors. The Portfolio Managers can open accounts only in the provinces in which they are registered.

iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates.

Insurance products are provided through iA Private Wealth Insurance Agency which is a trade name of PPI Management Inc. Only products and services offered through iA Private Wealth Inc. are covered by the Canadian Investors Protection Fund.

Beacon Wealth Partners is a personal trade name of Jack Fournier and Travis Kidson.