Inside the Market's roundup of some of the Canadian small caps making news and on the move today. This post will be updated during the trading day.
Home Capital Group Inc. announced that its board has approved increasing its dividend targets to 14-21 per cent of profits from 13-17.5 per cent. The company said that the decision was based on strong financial performance and good liquidity.
Shares in the company rose sharply at the start of trading today on the news, which was disclosed after the closing bell on Thursday. But those gains were trimmed as today has progressed, with the stock in mid-afternoon trade up only about 0.7 per cent.
Industrial Alliance Securities analyst Fred Westra noted that Home Capital has raised its dividend 20 times over the last 10 years. The latest dividend intentions "highlights strong confidence of prospects ahead," he said. Mr. Westra raised his price target on the stock to $57 (Canadian) from $54 and reiterated a "buy" rating.
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Pulse Seismic Inc. reported second-quarter results that were only slightly better than expected, but showed substantial improvement over recent quarters.
Revenue of $7.321-million beat consensus expectations for $6.407-million, while the provider of seismic data to the Canadian energy sector matched Street expectations in reporting a net loss of 1 cent.
Cantor Fitzgerald analyst Peter Prattas upgraded his rating to "buy" from "hold" after reviewing the results, although the action was largely attributed to the company's recent share price decline. He also trimmed his price target to $3.40 (Canadian) from $3.75 because of softening natural gas prices.
He commented: "Our forecast for this year remains materially intact. We are optimistic that Pulse can have a relatively strong second half of the year (versus both the second half of last year and the first half of this year). While the company's sales are inherently lumpy, we see the prospect of an increase in seismic data library sales on an increase in M&A activity in the Western Canadian oil and gas market. ... We are trimming out outlook for 2015 as a result of a recent retrenchment of natural prices. However, we still expect growth over 2014 on a return to a more normalized level of M&A activity and as investments made in participation surveys over recent years eventually get churned into subsequent licensing to non-participants. As the cost to maintain Pulse's data library is extremely low, we continue to forecast robust free cash flow generation for the company which it can apply toward dividends, share buybacks and further improving its already strong balance sheet."
Shares are up 1.3 per cent in early afternoon trading.
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Westport Innovations Inc. reported a loss of $25.4-million or 56 cents per share. Comparable adjusted EPS puts the company's loss at 42 cents per share, which met estimates. A large portion of the loss was due to unrealized foreign exchange loss, though the company reported that revenues and EBITDA had improved from last year. Shares have lost almost 10 per cent so far this year and were down a further 8 per cent this morning.
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Canadian Real Estate Investment Trust met EPS estimates of 74 cents in the second quarter. Net income fell by $2.4-million to $22.7-million.
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Reservoir Minerals Inc. has been granted four new exploration licenses for mining gold, silver and copper in Serbia, Romania and Macedonia. The company already operates projects out of Serbia, Cameroon and Gabon.
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Fortune Minerals Limited has had the closing on its acquisition of a silver mine in Colorado extended from the end of July to the beginning of September. The company did not disclose the reason why.
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Bonavista Energy Corporation beat expectations, reporting an EPS of 28 cents versus the consensus 24 cents. Production revenues are up 17 per cent to $286.5-million from $244.9-million the year before, while production volumes increased 2 per cent. The shares rose in the first half of the year, but Bonavista stock has dropped 17 per cent since mid-June.
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Constellation Software Inc. beat estimates with a comparable adjusted EPS of $3.07 versus the street expectation of $2.93. Revenues grew 39 per cent to $416-million on the backs of five completed acquisitions over the past quarter. Net income also rose to $23-million from $19-million. Shares have risen 15 per cent year-to-date.
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Nevsun Resources Ltd. reported that it had accelerated production in the second quarter, leading the company to just beat EPS estimates: 15 cents compared to the consensus 14 cents. Copper sales rose 51 per cent higher compared to the first quarter of 2014 as copper grades exceeded expectations.
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Renewable chemicals company EcoSynthetix Inc. posted a weaker second quarter as net sales dropped to $4.5-million in the second quarter compared to $5.5-million last year. EPS also missed, with the company reporting a loss of 7 cents versus the consensus loss of 5 cents. Sales have suffered as oversupply dropped prices in the Asia-Pacific region. Shares have lost 23 per cent so far this year.
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True North Apartment REIT came in just under estimates at 18 cents per share compared to the street expectation of 19 cents. Net operating income rose 4.9 per cent to $7.8-million, while colder weather conditions led to higher-than-expected utility costs. Costs from a recent acquisition also hurt bottom lines this quarter.
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Pure Industrial Real Estate Trust will sell two properties in Vaughan for $6.2-million. The items for sale are multi-tenant industrial buildings, with the company stating that the sale was because the the buildings were non-core assets.
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Eldorado Gold Corp. met expectations with an EPS of 5 cents, with the company reporting that gold revenues were slightly above last year at $247.6-million compared to $243.6-million. Ounces of gold sold were up to 190,621 ounces from 176,260 ounces, but profits were offset by weaker gold prices. Shares have climbed 34 per cent year-to-date and were up a further 6 per cent this morning.
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Interfor Corporation reported a second-quarter earnings of $21.6-million or32 cents per share, beating estimates of 30 cents. Lumber production was a record 582 million board feet, reflecting the addition of two sawmills back in March. Sales also topped 628 million board feet, driven by sales at the company's U.S. Southeast operations.
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Western Forest Products Inc. announced that a new five-year labour contract with the United Steelworkers union has been ratified by a majority of its union members. Approximately 1,500 Western employees are covered under this new collective agreement that expires on June 15, 2019. The previous agreement had expired on June 15, 2014.
Darcy Keith