Paul Loucks, chief executive of Halogen Software.Jim Young
Inside the Market's roundup of some of the Canadian small caps making news and on the move today
Trilogy Energy Corp. plunged 13 per cent at the start of today's trading after providing disappointing quarterly results and production guidance after markets closed Thursday night.
The quarterly results and outlook prompted at least three downgrades from the Street: Raymond James downgraded Trilogy to "outperform" from "strong buy" and cut its price target to $26 (Canadian) from $40. BMO Nesbitt Burns also lowered its rating, to "market perform" from "outperform," with a price target of $23. And National Bank downgraded its rating to "sector perform" from "outperform" with a price target of $21.
Trilogy reported cash flow per share for the quarter of 69 cents, below the consensus expectation of 74 cents. The lower cash flow was due to higher operating and transportation costs and lower-than-expected realized pricing.
"Trilogy reported 3Q14 results that mildly lagged our expectations but the subsequent outlook plainly constitutes a hard setback. Due to lower than expected results and ongoing facilities constraints/outages, Trilogy may see production in the 33,000 boed range for the six months of this winter, seasonally lifting in 2Q15 after their winter drilling program to something in the order of 37,000 boed. The selloff in oil prices compounds the "damage done" from this outlook and puts Trilogy in a position where a reset of the balance sheet and business plan are needed. In the meantime we are compelled to plainly reduce our rating," commented Raymond James analyst Kurt Molnar.
Added BMO Nesbitt Burns analyst Gordon Tait, "We are lowering our rating on Trilogy to Market Perform from Outperform as we do not see a near-term catalyst for the stock. We believe the North American condensate and natural gas markets are likely to remain well supplied during our forecast period. Moreover, there are a number of companies looking to sell down or JV their Duvernay positions, so we do not think that consolidation of the play is imminent."
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Canyon Services Group Inc. reported third-quarter results that were well ahead of expectations, thanks to near full utilization in the company's core business lines.
"Though commodity prices could negatively affect the second half of next year, we see Canyon as well positioned to deliver leading returns in the space in the long term," TD Securities analyst Scott Treadwell said in a note. "We have adjusted our estimates for 2015 up slightly on higher revenues, but on a lower multiple our target price drops to $16.00 (from $17.00) though our buy rating is unchanged."
Shares in the company spiked 8 per cent at the start of today's trading.
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Secure Energy Services Inc. announced a 40 per cent increase in its EBITDA in the third quarter and a 20 per cent hike in its dividend. TD Securities analyst Scott Treadwell commented the dividend hike signals increased confidence in the sustainable cash flow potential of the business. He raised his price target to $25 (Canadian) from $23.
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Bankers Petroleum Ltd. reported that its revenues to to $158.9-million from $146.6-million a year earlier, while diluted earnings per share rose to 9.5 cents from 7.6 cents. Investors were impressed; shares rose 6 per cent at the start of trade today.
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Several uranium miners and explorers - including Fission Uranium Corp. and Denison Mines Corp. - surged in trading today after Japan cleared the way to restart the first of the nuclear reactors that were shut down after the March 2011 earthquake and tsunami. (Read more here.)
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InnVest Real Estate Investment Trust has announced that it has entered into a definitive agreement to acquire the 644-room Hyatt Regency Vancouver from an affiliate of Hyatt Hotels Corporation for $140-million.
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Romarco Minerals Inc. said the South Carolina Department of Health and Environmental Control has issued the mine operating permit for the company's 100 per cent-owned Haile gold mine project. It's the final major permit required for Haile. Shares in the company rose 5 per cent in morning trade.
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AuRico Gold Inc. reported a third-quarter net loss of 2 cents per share, wider than Street expectations of a 1-cent loss. But shares opened up 7 per cent.
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Halogen Software Inc. reported a third-quarter 2014 net loss of $5-million. Revenue was $12.8-million, missing Street expectations of $15.75-milllion, while adjusted EBITDA was a loss of $2.6-million, worse than Street expectations of $1.19-million.
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MCAN Mortgage Corporation reported third-quarter net income of $4.9-million, missing Street expectations of $7.2-million, while earnings per share came in at $0.23, below Street estimates of $0.37.
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Enerflex Ltd. reported third-quarter net earnings of $30.2-million, or $0.39 per share, missing Street estimates of $36.8-million or $0.51 per share.
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AutoCanada Inc. reported third-quarter results, with revenues rising 82 per cent to $733.4-million. Earnings per share rose 45 per cent to 74 cents. But the stock opened down 5 per cent.
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GMP Capital Inc. reported revenue of $67.5-million in third quarter 2014, up 58 per cent from a year ago. Diluted EPS was 5 cents, versus a loss of 1 cent a year earlier.
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Enerplus Corp. increased its production guidance for this year. It increased the low end of its guidance range by 2,000 barrels of oil equivalent per day and now expects full-year production to average between 102,000 and 104,000 per day. Shares opened today up nearly 7 per cent.
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Athabasca Oil Corp. reported a net loss per share of 5 cents in its latest quarter, narrower than a 7-cent loss from a year ago. It produced an average of 6,381 barrels of oil equivalent per day, in line with its earlier guidance.
AltaCorp Capital Research analyst Nicholas Lupick commented, "In Q3/14 ATH reported CFPS of $0.02/sh (64% increase sequentially) which is a beat when compared with our estimate of ($0.02)/sh and consensus of ($0.01)/sh. The company's liquidity position remains strong with cash on hand at the end of the quarter of $722.7mm, another $584mm still to come from the Dover Put proceeds, and a $350mm credit facility in place. Overall we would highlight that Athabasca is still in its early stages of development in its core plays and thus we believe that investors will continue to give little focus to the company's quarterly financial results over the near term."
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Stella-Jones Inc. reported net profit per share of 43 cents, up from 40 cents a year earlier.
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Boston Pizza Royalties Income Fund reported third-quarter same-store sale growth was 3.1 per cent in the period, and 0.5 per cent year to date.
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In analyst actions this morning involving Canadian small caps:
FirstEnergy Capital downgraded Paramount Resources to "market perform" from "outperform" with a price target of $55 (Canadian).
Raymond James downgraded Roxgold to "outperform" from "strong buy" and cut its price target to 80 cents (Canadian) from $1.20.
Raymond James downgraded Legumex Walker to "market perform" from "strong buy" and cut its price target to $5 (Canadian) from $8.75. Cormark Securities downgraded the stock to "market perform" from "buy" with a price target of $4.
Cormark Securities upgraded Osisko Gold Royalties to "buy" from "market perform" with a price target of $17.25 (Canadian).
TD Securities downgraded Surge Energy to "hold" from "buy" with a price target of $7.50 (Canadian).
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Darcy Keith