Welcome to a new month.
This morning, North American stock markets look to open higher. The price of oil is firmer, while the price of natural gas futures is up over 2 per cent. Meanwhile, the price of gold is stable.
Today, there are no key Canadian economic releases. In terms of earnings, before the market opens, CGI Group Inc. (GIB.A-T) will be reporting its first quarter fiscal 2017 results.
In the U.S., weekly oil inventory data will be reported from the U.S. Energy Information Administration, the U.S. Federal Reserve's interest rate decision will be announced (with no change in interest rates expected), and January vehicle sales data will be released. In addition, the January ADP employment report and January ISM manufacturing data will both be released.
Briefly recapping Tuesday's performances, major North American equity markets were mixed.
In the U.S., the Dow Jones Industrial Average declined 0.54 per cent, the S&P 500 index was relatively unchanged, falling just 0.09 per cent, and Nasdaq composite index was flat, inching up 0.02 per cent.
Turning to Canada, the S&P/TSX composite index gave up 19 points, or 0.12 per cent. There were 113 securities in the TSX Index that advanced, 127 securities declined in value, and nine stocks closed the day unchanged.
The TSX Index gained 0.64 per cent in January.
Also interesting to note is the rising value of the Canadian dollar relative to the U.S. dollar. On Tuesday, the loonie jumped to its highest level since September 2016, rising to 76.74 cents.
On today's TSX Breakouts report, there are 21 stocks on the positive breakouts list (stocks with positive price momentum), over 40 per cent are gold and silver stocks and there are a number of utility stocks, five to be exact. Turning to the negative breakouts list (stocks with negative price momentum), there are 18 stocks, seven of which are from the energy sector.
The security highlighted today is just pennies away from appearing on the positive breakouts list – Integra Gold Corporation (ICG-X). The junior gold exploration company has operations in a prolific gold producing region in Canada, an unanimous 'buy' recommendation from 14 analysts, and 58 per cent upside projected. It is a stock with several catalysts on the horizon. Plus, it is a potential acquisition target.
A brief outline is provided below that may serve as a springboard for further fundamental research.
The company
Integra Gold has operations in the Val-d'Or gold district in Québec, a prolific gold region in the Abitibi greenstone belt. Its flagship property is its high-grade Lamaque Gold Project.
Catalysts
In the first quarter of this year, the company is expected to release an updated Preliminary Economic Assessment (PEA), as well as a resource update. In addition, positive drilling results could be another catalyst.
Large shareholder position
Eldorado Gold Corp. (ELD-T) has a significant ownership position in the company. In August 2015, Eldorado acquired a 15-per-cent interest in the company. Integra Gold could perhaps be a logical future acquisition target.
Dividend Policy
The company is focused on exploration and as a result does not pay its shareholders a dividend.
Valuation
Analysts commonly value the stock on a price-to-net asset value basis. Analysts' target prices range from a low of 90 cents to a high of $1.75. Individual target prices are as follows in numerical order: $0.90, five at $1, $1.05, $1.15, three at $1.25, two at $1.30, and $1.75. The consensus one-year target price is $1.17, suggesting the share price has 58 per cent upside potential over the next 12 months.
Analysts' recommendations
According to Bloomberg, 14 analysts cover this small cap gold company with a market capitalization of $354-million. All 14 analysts have 'buy' recommendations. More specifically, 12 analysts have 'buy' recommendations and two analysts have 'speculative buy' recommendations.
The 14 firms providing research coverage are as follows in alphabetical order: Beacon Securities, BMO Capital Markets, Cormark Securities, GMP, Haywood Securities, Industrial Alliance Securities, Laurentian Bank Securities, M Partners, Mackie Research Capital, Macquarie, Paradigm Capital, Raymond James, RBC Capital Markets, and Roth Capital Partners.
Chart watch
Year-to-date, the share price is up nearly 3 per cent. The share price can be volatile, following the price of gold higher and lower. For instance, during the last two months of 2016, when cyclical 'Trump stocks' were rallying and the price of gold was falling, the share price of Integra Gold tumbled 23 per cent to 56 cents from 73 cents.
In terms of key resistance and support levels, the share price has initial overhead resistance at 80 cents, and after that at 95 cents. There is downside support around 70 cents, close to its 200-day moving average (at 72 cents). Failing that, there is support around 66 cents, near its 50-day moving average (at 64 cents), and then at 60 cents.
The relative strength index is at 62, suggesting the shares are in neutral territory, neither overbought nor oversold.
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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.