An internal audit into drug management at Richmond, B.C., health-care facilities flagged several problems, including how anesthesiologists at Richmond Hospital track drug use and “wastage.”
The Canadian information technology and health care sectors should be among the leaders of 2015, building on big gains posted last year, Euro Pacific Canada said in a report.
The two sectors were in the top three on the S&P/TSX composite index last year, although it's worth noting that the Toronto market's health care index includes all of three stocks, reflecting the dearth of large Canadian pharmaceutical companies.
But Euro Pacific, a Toronto-based a brokerage, tends to focus on emerging Canadian companies, of which there is a much larger pool to choose from in those sectors.
"Euro Pacific's commitment to the Canadian health care and technology sectors has been a clear win," the report said. The brokerage continues to favour those sectors, "where Canadians are recognized leaders."
Here are Euro Pacific's top picks for 2015, followed by performance data for its picks last year.
Neptune Technologies & Bioressources Inc. (NTB-T)
Target price: $7.50
This developer of pharmaceuticals and nutritional supplements, including krill oil, is on track to exceed gross margins of 40 per cent over the next few quarters, the report said.
TSO3 Inc. (TOS-T)
Target price: $3.75
With the company's hospital sterilization platform having received approval from the U.S. Food and Drug Administration, the "regulatory risk is now virtually eliminated for … key markets in Europe and North America," Euro Pacific said.
FAM Real Estate Investment Trust (F.UN-T)
Target price: $10
This office-focused REIT has a strong acquisition pipeline not reflected in its current valuation, the report said. "We believe the REIT is mispriced relative to its strengths and transformative data centre development which is nearing completion."
Wanted Technologies Corp. (WAN-X)
Target price: $1.80
Wanted provides real-time labour market intelligence regarding the supply and demand for workers for any given job. "The ongoing shift from reselling data to directly serving corporates goes beyond leveraging a pocket of strength," the report said.
Computer Modelling Group Ltd. (CMG-T)
Target price: $15
As a provider of simulation software to oil and gas companies, CMG has a high level of recurring revenues and a low correlation to oil prices.
DHX Media Ltd. (DHX.B-T)
Target price: $11.50
This Halifax-based production and distribution company still has solid growth prospects from acquisitions as well as "strong digital and production momentum over the next two to three years," the analysts said.
Espial Group Inc. (ESP-T)
Target price: $4.30
Espial, a developer of software services that enable the delivery of Internet protocol television, recently signed an agreement with a European cable operator, validating the stock's bullish thesis, the report said.
Probe Mines Ltd. (PRB-X)
Target price: $3.75
After the release of the Euro Pacific report, Goldcorp Inc. announced a deal to buy Probe Mines Ltd., for about $526-million.
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Last year's picks from Euro Pacific Canada:
Cipher Pharmaceuticals Inc. (CPH-T)
Target price: $11
2014 year-end closing price: $16.75
2014 price change: 116.4 per cent
Mainstreet Equity Corp. (MEQ-T)
Target price: $39.50
2014 year-end closing price: $37.89
2014 price change: 3.9 per cent
HealthLease Properties REIT (Delisted)
Target price: $12.50
Acquired in November for $14.20 per share
2014 price change: 45.4 per cent
Telus Corp. (T-T)
Target price: $43
2014 year-end closing price: $41.89
2014 price change: 14.6 per cent
DHX Media Ltd. (DHX.B-T)
Target price: $6.25
2014 year-end closing price: $9.71
2014 price change: 73.4 per cent
5N Plus Inc. (VNP-T)
Target price: $3
2014 year-end closing price: $2.47
2014 price change: 3.8 per cent
Novadaq Technologies Inc. (NVDQ-Q)
Target price: $23 (U.S.)
2014 year-end closing price: $16.62
2014 price change: 0.8 per cent
Tim Shufelt