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The S&P/TSX composite index closed Friday in positive territory, gaining 56 points or 0.4 per cent. Trading volume was low ahead of the U.S. holiday long weekend.

There are 49 securities on the positive breakouts list (stocks with positive price momentum). Meanwhile, there are just five stocks, all small caps, on the negative breakouts list (stocks with negative price momentum).

Discussed today is a small-cap financial stock, with a market capitalization of just over $300-million, MCAN Mortgage Corporation (MKP-T). The stock has provided investors with both income and growth, with the stock price appreciating 15 per cent year-to-date and the dividend yield is 8.3 per cent.

A brief outline is provided below that may serve as a springboard for further fundamental research.

The company

MCAN has a diversified portfolio of Canadian mortgages focused on single-family mortgages as well as residential construction loans.

On May 11, MCAN reported earnings per share of 34 cents in the first quarter, up 62 per cent year over year from 21 cents. Return on equity was 11.8 per cent, rising from 7.5 per cent last year.

Managements outlook in the first quarter earnings release was upbeat stating, "Based on a strong level of activity in the first quarter and a good pipeline of deals in construction and commercial, we believe that 2016 originations and portfolio growth will allow us to achieve our annual corporate asset growth target of 10 per cent."

Dividend policy

An important point to note is that the majority of dividends received by shareholders are taxed as interest income due to its mortgage investment corporate structure. MCAN typically distributes all taxable income to its shareholders.

The company pays shareholders a quarterly dividend of 29 cents per share, or $1.16 cents on a yearly basis. This equates to an annualized yield of 8.3 per cent.

During the years 2009 through 2013, the company paid shareholders a special dividend each year.

Valuation

The sole forecast on Bloomberg has the book value per share rising to $13.71 in 2016, suggesting the shares are trading a P/B ratio of less than 1 times the 2016 forecast. This is below the three-year average of 1.2 times, implying there is room for the stock price to appreciate.

Analysts' recommendations

According to Bloomberg, there are two analysts whom cover this stock, both have buy recommendation. One has a one-year price target of $16, and the other has a price target of $14.20. The average one-year price target is $15.10, implying 8 per cent upside in the stock price.

Only one analyst's earnings forecasts are provided on Bloomberg. The EPS estimate is $1.39 in 2016, rising 7 per cent to $1.49 in 2017.

Chart watch

Looking at a long-term chart, the stock price has been consolidating, or trading sideways, predominately between $12 and $15 since 2010.

Year to date, the stock price has appreciated 15 per cent. The chart is positive with the shares in an uptrend since mid-January. There is large upside resistance at $15 and then near its record closing high around $16 ($16.17 reached in February 2011).

The stock has downside support around $13, near its 50-day moving average (at $13.23) and failing that, there is support around $12.

The relative strength index is at 75, suggesting the stock is in overbought territory. Generally, a reading at or above 70 indicates an overbought condition.

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-TAecon Group Inc
AQN-TAlgonquin Power & Utilities Corp
ACO.X-TAtco Ltd
BNK-TBankers Petroleum Ltd
BYD.UN-TBoyd Group Income Fund
BAM.A-TBrookfield Asset Management Inc
CAE-TCAE Inc
CBL-TCallidus Capital Corp
FRC-TCanyon Services Group Inc
CPX-TCapital Power Corp
CVE-TCenovus Energy Inc
CSH.UN-TChartwell Retirement Residences
CLR-TClearwater Seafoods Inc
DSG-TDescartes Systems Group Inc
ECA-TEncana Corp
ESL-TEnghouse Systems Ltd
FSV-TFirstService Corp
GMP-TGMP Capital Inc
HLF-THigh Liner Foods Inc
IPL-TInter Pipeline Ltd
IT-TIntertain Group Ltd
JE-TJust Energy Group Inc
KXS-TKinaxis Inc
LUC-TLucara Diamond Corp
MAL-TMagellan Aerospace Corp
MFC-TManulife Financial Corp
MKP-TMCAN Mortgage Corp
DR-TMedical Facilities Corp
OSB-TNorbord Inc
OTC-TOpen Text Corp
ORL-TOrocobre Ltd.
POE-TPan Orient Energy Corp.
PPL-TPembina Pipeline Corp
AAR.UN-TPure Industrial Real Estate Trust
QBR.B-TQuebecor Inc
RCH-TRichelieu Hardware
RY-TRoyal Bank of Canada
VII-TSeven Generations Energy Ltd
SNC-TSNC-Lavalin Group Inc
STN-TStantec Inc
SMU.UN-TSummit Industrial Income REIT
SLF-TSun Life Financial Inc
TH-TTheratechnologies Inc
TRI-TThomson Reuters Corp
TD-TToronto-Dominion Bank
TFI-TTransForce Inc
WTE-TWestshore Terminals Investment Corp
WIN-TWi-LAN Inc
WSP-TWSP Global Inc
Negative Breakouts
EFH-TEchelon Financial Holdings Inc
HWD-THardwoods Distribution Inc
NAL-TNewalta Corp
PG-TPremier Gold Mines Ltd
S-TSherritt International Corp