The S&P/TSX composite index was relatively unchanged on Thursday, down just 0.03 per cent.
There are 47 securities on the positive breakouts list (stocks with positive price momentum). Meanwhile, there is just one stock on the negative breakouts list (stocks with negative price momentum).
Discussed today is a small-cap infrastructure stock, with a market capitalization just over the $1-billion level, Aecon Group Inc. ( ARE-T).
A brief outline is provided below that may serve as a springboard for further fundamental research.
The company
Aecon is a construction and infrastructure development company serving both the private and public sectors. The company operates three in core market segments: energy, infrastructure, and mining.
On May 3, the company reported adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $4.2-million. There is seasonality in the business and the first-quarter represents the weakest quarter of the year. Historically, the third and fourth quarters are the strongest. However, a key takeaway from the quarterly results was the company record backlog, as this represents future revenue. The company reported a record backlog of $4.61-billion up from $2.79-billion last year as an impressive $2-billion in new contracts were booked in the first quarter, which includes the large Darlington Nuclear Refurbishment contract.
Dividend policy
The company has announced a dividend increase every March since 2012.
The company pays shareholders a quarterly dividend of 11.5 cents per share, or 46 cents on a yearly basis. This equates to an annualized yield of 2.6 per cent.
The company has a strong balance sheet to support the dividend.
Valuation
According to Bloomberg, on an enterprise value-to-EBITDA basis, the stock is trading at a multiple of 5.9 times the 2017 consensus estimate, slightly above the three-year historical average of 5.5 times, but with room for the multiple to expand.
Analysts' recommendations
According to Bloomberg, the one year price target is $19.25, which is based on 10 buy recommendations and three hold recommendations. This suggests the share price may potentially rise over 10 per cent. Price targets range from a low of $17 to a high of $24.
The consensus EBITDA estimate is $177-million in 2016, rising over 7 per cent to $190-million in 2017. The Street's EPS estimate is 90 cents in 2016, rising 20 per cent to $1.08 in 2017.
Chart watch
The chart is positive. Year to date, the stock price has appreciated a respectable 13 per cent with the stock in an uptrend. The stock's 50-day moving average and 200-day moving average are both rising. That being said, in recent days, the volume has been declining suggesting demand may be waning and the stock price may be due for a pause. The daily average trading volume over the past two months is just below half a million shares, and in recent days, the volume has dried up with less than half of that amount trading.
Shares of Aecon are approaching overhead resistance in the mid-$18 range, close to its previous closing high of $18.69 reached in May 2014.
There is downside support around $16, and failing that, there is large around $14.
The Breakouts file is a technical analysis screen intended to identify companies that are technically breaking out. In addition, this report highlights a company's dividend policy, analysts' recommendations, and provides a brief technical analysis for a security to provide readers with more information.
If a stock appears on the positive breakouts list, this indicates positive price momentum, and that a company may be worthwhile for investors to look at the fundamentals in order to determine if the recent price strength is warranted and will continue. If a security appears on the negative breakouts list, this indicates negative price momentum, and may be indicative of either deteriorating fundamentals or perhaps indicates a buying opportunity.
A technical analysis screen does not replace fundamental analysis, but can help identify companies worth having a closer look at.
Below is a list of securities principally from the S&P/TSX composite index and the S&P/TSX Small Cap index that are technically breaking out, reaching new 55-day highs or lows. Securities on the positive breakouts list have displayed positive price momentum during this period. Securities on negative breakouts list have experienced negative price momentum.
Positive Breakouts | |
---|---|
ARE-T | Aecon Group Inc |
AIF-T | Altus Group Ltd |
ARX-T | ARC Resources Ltd |
BNK-T | Bankers Petroleum Ltd |
BLU-T | BELLUS Health Inc. |
BDT-T | Bird Construction Inc |
BLX-T | Boralex Inc |
CFW-T | Calfrac Well Services Ltd |
FRC-T | Canyon Services Group Inc |
CPX-T | Capital Power Corp |
CJ-T | Cardinal Energy Ltd |
CJT-T | Cargojet Inc |
CVE-T | Cenovus Energy Inc |
CSH.UN-T | Chartwell Retirement Residences |
CLR-T | Clearwater Seafoods Inc |
CR-T | Crew Energy Inc |
DCI-T | DirectCash Payments Inc |
ENF-T | Enbridge Income Fund Holdings Inc |
ECA-T | Encana Corp |
ESL-T | Enghouse Systems Ltd |
FN-T | First National Financial Corp |
GMP-T | GMP Capital Inc |
HLF-T | High Liner Foods Inc |
IAG-T | Industrial Alliance Insurance & Financia |
KXS-T | Kinaxis Inc |
KPT-T | KP Tissue Inc |
LUC-T | Lucara Diamond Corp |
MAL-T | Magellan Aerospace Corp |
MRG.UN-T | Morguard North American Residential REIT |
NBZ-T | Northern Blizzard Resources Inc |
OTC-T | Open Text Corp |
QBR.B-T | Quebecor Inc |
RRX-T | Raging River Exploration Inc |
RCH-T | Richelieu Hardware |
RME-T | Rocky Mountain Dealerships Inc |
RSI-T | Rogers Sugar Inc |
RY-T | Royal Bank of Canada |
VII-T | Seven Generations Energy Ltd |
SRU.UN-T | Smart Real Estate Investment Trust |
SPE-T | Spartan Energy Corp |
SMU.UN-T | Summit Industrial Income REIT |
TH-T | Theratechnologies Inc |
TD-T | Toronto-Dominion Bank |
TRP-T | TransCanada Corp |
WTE-T | Westshore Terminals Investment Corp |
WIN-T | Wi-LAN Inc |
WSP-T | WSP Global Inc |
Negative Breakouts | |
NAL-T | Newalta Corp |