An inside look at Osisko Mining
Inside the Market's roundup of some of the Canadian small caps making news and on the move today. This will be updated through the morning.
Long Run Exploration Ltd. shares were down about 5 per cent at midday after an analyst with Canaccord Genuity warned the company's dividend - currently yielding about 15 per cent annually - is at risk of being cut.
The company issued third-quarter results late Wednesday that were in line with expectations. The company also announced a revision to its 2014 guidance, increasing its capital spending assumptions for the year while modestly reducing production expectations due to facility-related issues.
The decline in oil prices are weighing heavily on the smaller, dividend-paying exploration and production companies and Long Run is particularly vulnerable given its relatively high debt levels, Canaccord's Anthony Petrucci said.
Investors are also clearly questioning if Long Run's dividend is secure, Mr. Petrucci said, noting the high dividend payout.
"Should oil prices remain at $80 a barrel for an extended period of time, we believe Long Run may want to consider revisiting its current dividend level," he said.
He downgraded the stock to "hold" from "buy" and lowered his target to $4 (Canadian) from $7.
"We continue to believe that Long Run offers significant long-term value, but in the face of current commodity prices, we believe better risk adjusted investments are available in the space," Mr. Petrucci said. "Should commodity prices rebound, Long Run is likely to be one of the biggest beneficiaries."
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Glacier Media Inc. received from the Canada Revenue Agency tax notices of reassessment relating to the years ended December 31, 2008 through 2013. "The potential for these reassessments has been anticipated for over a year and has been previously disclosed. The reassessments deny the application of non-capital losses, capital losses and scientific research & experimental development tax credits claimed for those years," the company said.
According to the notices of reassessment, taxable income for the period 2008 to 2013 will increase in the amount of $122.8 million, the company said.
Shares in Glacier Media were down more than 5 per cent in mid-morning trade.
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Stantec Inc. said its third-quarter gross revenues rose 16.1 per cent to $674.7-million as net income rose 5.9 per cent. EPS rose to $1.03 from 98 cents a year ago. The Street was expecting EPS of $1.043. Management made no substantial changes to its outlook for 2014.
Desjardins Securities analyst Benoit Poirier reiterated a "buy" rating and $76 (Canadian" price target after reviewing the results. "Organic growth and profitability remain strong, albeit with growth shifting away from Canada and toward the US and international regions. We welcome the sharp rise in organic growth in Buildings and in the U.S.," he commented.
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ARC Resources Ltd. reported cash flow per share of 89 cents, missing the consensus by 1 cent. Production slightly beat Street expectations. It also introduced 2015 guidance, forecasting capital expenditures of $875-million.
AltaCorp Capital Research analyst Jeremy McCrea commented, "With a mostly in line quarter and a beat on production, the financial results shouldn't be all that surprising to investors. What should have investors encouraged however is the persistent success in each of its core plays where wells continue to show paybacks within a 12 month period. As a result, ARC can continue to enjoy above average growth (9% PPS growth expected for 2015; 14% of 2014), and a low D/CF at 1.1x – fundamental factors that will continue to drive the share price higher. We suspect that, with continued drilling success and further positive quarterly results, the share price will move higher."
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Pacific Rubiales Energy Corp. said revenues in its third quarter were $1.3-billion, up 20 per cent from a year ago. Adjusted EBITDA rose 4 per cent to $635-million. Adjusted EPS was 64 cents versus estimates for 40 cents.
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Gluskin Sheff + Associates Inc. said its diluted earnings per share fell to 24 (Canadian) cents in its latest quarter from 28 cents a year ago. But assets under management rose to $8.068-billion from $6.342-billion a year ago. Shares in the stock was down 1.2 per cent in late morning trade.
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Primero Mining Corp. said revenues in its latest quarter rose to $75.503-million from $53.793-million a year earlier. It reported breakeven adjusted EPS, very close to Street estimates.
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Richmont Mines Inc. reported third-quarter adjusted EPS of 10 cents versus a loss of 3 cents a year ago. The Street was expecting EPS of 4 cents. Shares reacted swiftly to the earnings beat, up nearly 5 per cent in mid-morning trade.
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CCL Industries Inc. reported quarterly sales rose to $689.7-million from $606.6-million as adjusted EPS rose to $1.83 from $1.38. The Street was expecting EPS of $1.735.
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Cominar Real Estate Investment Trust said its net operating income in the third quarter rose 6.2 per cent. It also said it has exceeded $8-billion in assets.
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Dorel Industries Inc. said third-quarter revenue rose 10.8 per cent to $673.0-million (U.S.). Net income for the period rose 75.4 per cent to $19.5-million or $0.60 per diluted share compared to $11.1 million or $0.34 per diluted share in 2013. The Street was expecting EPS of 0.61.
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Osisko Gold Royalties reported third-quarter earnings per share of 12 cents, reversing a loss of 9 cents a year earlier, while revenues were $9.571-million. The Street was expecting profit of 9 cents on $6.955-million in revenues.
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Canaccord Genuity reported adjusted fiscal-second quarter EPS of 17 cents on sales of $236.3-million. That beat Street estimates of 15 cents and $225.2-million, respectively.
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Great Canadian Gaming Corp. reported third-quarter EPS of 28 cents, beating the Street consensus of 24 cents, while revenues of $112.3-million was slightly ahead of the Street at $111.667-million.
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Silver Standard Resources Inc. reported a third-quarter loss of 18 cents per share. Sales were $79.269-million, short of Street expectations of $84.6-million. Shares rose 6 per cent at the start of trading.
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Trinidad Drilling Ltd. reported third-quarter sales of $2.44-million, beating Street estimates of $2.24-million.
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Golden Star Resources Ltd. reported third-quarter revenues of $77.8-million, missing Street estimates of $80.83-million.
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Premium Brands Holdings Corp. said it expects its food-service division's margins to improve over the next several quarters, but "they will likely remain below normal levels until mid-2015, due to expected continued volatility and supply issues for premium beef products."
Premium also expects its retail division's organic growth to continue, exceeding its targeted range for the rest of 2014, and food-service's organic growth "to exceed or be at the high end of its targeted range of 6 per cent to 8 per cent for the remainder of 2014."
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Silvercorp Metals Inc. announced that Henan Provincial Department of Land and Resources has renewed the mining permit for the SGX mine at the Ying Mining District, Henan Province, China for another 10 years.
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Blackbird Energy Inc. said it has acquired a 100 per cent working interest in 10 additional sections of Montney rights from four separate vendors that are contiguous or within one mile of Blackbird's existing western Elmworth acreage, which represents a 28 per cent increase. With the completion of these multi-transactional series of acquisitions, Blackbird now holds 100 per cent working interest in 46 contiguous sections (29,440 acres) and a total of 50 sections of Montney rights at Elmworth."
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In analyst actions this morning involving Canadian small caps:
Raymond James slashed its price target on North American Energy Partners to $7 (Canadian) from $11 but maintained an "outperform" rating.
Raymond James slashed its price target on North American Palladium to 10 cents (Canadian) from 25 cents and reiterated an "underperform" rating.
Canaccord Genuity slashed its price target on Long Rung Exploration to $4 (Canadian) from $7 and downgraded its rating to "hold" from "buy."
Canaccord Genuity cut its price target on Tahoe Resources to $20 (Canadian) from $25.50 and maintained a "hold" rating.
CIBC World Markets downgraded Conifex Timber to "sector perform" from "sector outperform" with a price target of $7 (Canadian).
FirstEnergy Capital upgraded Horizon North Logistics to "market perform" from "underperform" with a price target of $3.50 (Canadian).
Macquarie downgraded Tourmaline Oil to "neutral" from "outperform" with a price target of $54 (Canadian).
Darcy Keith