Tuesday's TSX breakouts: This stock has seven unanimous ‘buy’ calls and 30% upside forecast

It was another quiet day in major North American equity markets with low trading volume. Investors await U.S. Fed Chair Janet Yellen's speech at the Federal Reserve Bank of Kansas City's annual economic policy symposium taking place in Jackson Hole, Wyoming on Friday at 10 a.m. (ET).

On Monday, in the U.S., the Dow Jones Industrial Average fell 0.12 per cent, the S&P 500 Index declined 0.06 per cent, and Nasdaq composite inched higher by 0.12 per cent.

In Canada, the S&P/TSX composite index rallied 61 points, or 0.41 per cent, to close at 14,748. Within the S&P/TSX composite index, there were 138 stocks that advanced, 97 stocks declined, and five securities closed the day unchanged.

The TSX Index is up 1.13 per cent month-to-date, up 4.86 per cent quarter-to-date, and up 13.36 per cent year-to-date.

Energy prices were volatile on Monday with the price of crude oil falling 3 per cent, while the price of natural gas jumped 3.7 per cent. That directional trend is continuing this morning with the price of crude under some pressure and the price of natural gas rising further.

On today's Breakouts Report, there are 42 securities on the positive breakouts list (stocks with positive price momentum), and just 11 stocks on the negative breakouts list (stocks with negative price momentum).

In the daily breakouts report, I try to appeal to a wide range of investors such as income, growth, and value investors, and I will occasionally highlight micro-cap stocks as it can be worthwhile keeping an eye on smaller companies; "planting seeds" for future growth can sometimes result in large profits. For instance, at the end of July, QHR Corporation (QHR-Venture) was highlighted in the Breakouts Report and on Monday, the share price soared 22 per cent after the company announced Loblaw Companies Limited's made a takeover offer for the company, offering $3.10 in cash for each QHR share.

Related: TSX breakouts report on QHR Corporation

Discussed today is another micro-cap stock. On Monday, it briefly appeared on the positive breakouts list intraday before the share price slid lower, closing down 4 per cent on low volume, and falling off the positive breakouts list. There are seven analysts whom cover this stock, all of whom have 'buy' recommendations. The security I am referring to is Yangarra Resources Ltd. (YGR-T).

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

The Company

Calgary-based Yangarra Resources is a junior oil and gas company with operations focused on the Cardium in central Alberta.

After the market closed on August 10, the company reported second-quarter financial results. Production averaged 2,849 barrels of oil equivalent per day (boe/d).  In the press release, management indicated that they plan to resume drilling activity this month with six extended reach wells planned. The company suspended drilling activity due to low commodity prices and has not drilled any wells since October 2015. In addition, the company expects to complete the standing Duvernay well.

During the second quarter, the company closed on its recently announced bought deal financing, raising $11.5-million though the sale of 11.5-million shares at $1 per share.

Dividend Policy

The company does not pay shareholders a dividend.

Analysts' Recommendations

According to Bloomberg, there are seven unanimous 'buy' recommendations on the stock.

The average one-year target price is $1.50, implying there is 30 per cent upside potential in the share price. Target prices range from a low of $1.30 to a high of $1.65. Individual target prices are as follows: $1.30, $1.45, three at $1.50, $1.60 and $1.65.

The consensus cash flow per share estimate is 22.3 cents in 2016, rising 47 per cent to 32.7 cents in 2017. However, forecasts have drifted lower since the start of the year. On January 1, the Street was forecasting cash flow per share of 32 cents for 2016 and 41 cents for 2017.

Chart Watch

Year-to-date, the share price is up a stellar 109 per cent, outperforming most energy stocks in the S&P/TSX composite index. Right now, the shares appear to be consolidating, or trade sideways, just above the $1 level.

The share price experienced a bullish technical "Golden Cross" at the beginning of May. A "Golden Cross" occurs when a short-term moving average, in this case the 50-day moving average, crosses above a longer-term moving average, in this case the 200-day moving average. When this occurs, it marks a potentially positive signal suggesting the upward price momentum may have traction.

Looking at key resistance and support levels, there is initial overhead resistance around $1.20, and downside support at $1, which is close to its 50-day moving average (at $1.06).

The share price can be somewhat volatile given its low liquidity. For example, the stock price fell 4 per cent on Monday on low volume with just 15,733 shares traded. The historical two-month average daily trading volume is approximately 56,000 shares.

The shares are in neutral territory, neither overbought nor oversold, with a relative strength index reading of 58. Generally, a reading at or above 70 indicates an overbought condition.

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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.

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.