Tuesday’s TSX breakouts: Insider buying activity continues for this strong stock performer

On today's TSX Breakouts report, there are 25 securities on the positive breakouts list (stocks with positive price momentum), and 35 securities on the negative breakouts list (stocks with negative price momentum).

Discussed today is a stock that appears on the positive breakouts list. The stock is a stellar performer year to date; however, despite the strong rally, a large shareholder continues to steadily accumulate shares of this company – Westshore Terminals Investment Corp. (WTE-T).

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

The company

Vancouver-based Westshore operates a coal storage and loading terminal at Roberts Bank, British Columbia.

Dividend policy

The company pays its shareholders a quarterly dividend of 16 cents per share, or 64 cents on a yearly basis. This translates to an annualized dividend yield of 2.6 per cent.

Last December, the company announced it was reducing its dividend to its present level of 16 cents per share given the sharp decline in coal prices and lower volumes.

Valuation

According to Bloomberg, the stock is trading at an enterprise value-to-EBITDA multiple of 9.9 times the 2017 consensus estimate, which is below its five-year historical average of 11.6 times.

Analysts' recommendations

According to Bloomberg, there are two 'buy' recommendations, and three 'hold' recommendations. There are no 'sell' recommendations. Firms with analyst coverage include: BMO Capital Markets, CIBC World Markets, RBC Capital Markets, Scotia Capital, and TD Securities.

The average one-year target price is $22.60, which implies the shares are fully valued. However, target prices range from a low of $19 to a high of $26, implying there may be modest upside potential. Individual target prices are as follows: two at $19, $23, and two at $26.

Several analysts have recently raised their target prices. Last month, the analyst at TD Securities raised his target price to $26 from $17.50, and last week, the analyst at RBC Capital Markets, lifted his target price to $26 from $24.

The consensus revenue estimate is $310-million for 2016, and $299-million for 2017. The Street is forecasting EBITDA of $176-million in 2016, and $175-million in 2017. The consensus EPS estimate is $1.57 in 2016, and forecast to rise to $1.58 in 2017.

Since the beginning of the second quarter, there have been positive earnings revisions. At the start of April, the consensus revenue estimate was $274-million for 2016, and $295-million for 2017. The Street's EBITDA estimate was $156-million for 2016, and $152-million for 2017.

Insider transactions activities

On Friday, business mogul, James Pattison, a significant owner purchased 150,000 shares at a price of $24.38 per share. On Sept. 22, he purchased 304,000 shares at a price of $24 per share. On Aug. 23, he bought 551,100 shares at a price of $21.14 per share. In addition, he acquired 250,000 shares on Aug. 22. This information can be found on the website www.sedi.ca.

Chart watch

Shares of Westshore have made a tremendous recovery in 2016, more than doubling in value. Similarly, other securities with exposure to coal have enjoyed stellar returns. For instance, CONSOL Energy Inc. (CNX-N) is up over 156 per cent year-to-date, and Teck Resources Ltd. (TCK.B-T) is up over 335 per cent so far this year.

Shares of Westshore have initial overhead resistance at $25, and after that around $28, and then at $30.

There is initial downside support around $21.50, near its 50-day moving average (at $21.58), and failing that at $20.

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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.

Securities screened are from the S&P/TSX composite index, the S&P/TSX Small Cap index, as well as Canadian small cap stocks outside of these indexes that have a minimum market capitalization of $200-million.

A technical analysis screen does not replace fundamental analysis, but can help identify companies worth having a closer look at.