Skip to main content

On Wednesday, major U.S. stock markets edged higher. The Dow Jones Industrial Average increased 0.18 per cent, the S&P 500 index advanced 0.16 per cent, and the Nasdaq composite index gained 0.36 per cent.

In Canada, the S&P/TSX composite index closed the day with a 0.60 per cent loss, declining 92 points, led by losses in energy stocks. There were 78 securities in the TSX Index that advanced, 167 securities declined in value, and five stocks closed the day unchanged. In the TSX Index, 31 per cent of the stocks advanced while 67 per cent declined.

Year to date, the TSX Index is up 0.55 per cent. In the U.S., the Dow Jones Industrial Average is up 7.14 per cent, the S&P 500 index has increased 8.68 per cent, and the Nasdaq composite has rallied 16.98 per cent.

On today's TSX Breakouts report, there are 18 stocks on the positive breakouts list (stocks with positive price momentum), and 52 stocks are on the negative breakouts list (stocks with negative price momentum).

Featured today is a security that may appear on the positive breakouts list in the future. Last Friday, the stock closed at an all-time high; however, its market capitalization is at $195-million, just below the $200-million market cap screening threshold. The top performing stock is up up over 31 per cent year-to-date. The security is linked to the growing electric vehicle industry as graphite is a key material used in batteries. Auto makers continue to enter this growing market with models offered by companies such as Tesla, BMW, Mercedes-Benz, Ford and Nissan.

Management anticipates plant construction will begin later this year. If the project remains on target, graphite production is anticipated to begin in late 2018 or 2019. For that reason, it will take time before the company is generating revenues. Consequently, this stock may be suitable for consideration by patient growth investors with a higher risk tolerance. The security I am referring to is Mason Graphite Inc. (LLG-X).

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

The company

Laval, Que.-based Mason Graphite is developing its 100 per cent owned Lac Guéret graphite deposit in the Côte-Nord region of northeastern Québec.

On June 6, the company issued a news release announcing the acceptance of its environmental impact study by the Québec government. The president and chief executive officer Benoît Gascon indicated that plant construction is targeted to begin later this year. In addition, management provided a positive update on the road construction linking its proposed plant site to a highway leading to the company's mine, the road segment was funded by the government.

Dividend policy

The company does not pay its shareholders a dividend.

Analysts' recommendations

There are four firms providing research coverage on this company, and all four analysts covering the stock have buy recommendations. The average one-year target price is $2.37, suggesting there may be approximately over 38 per cent upside potential in the share price over the next 12 months. Individual target prices are as follows in numerical order: $1.80, $2, $2.10, and $3.

The four firms providing research coverage are as follows in alphabetical order: Cormark Securities, Eight Capital, National Bank Financial and Paradigm Capital.

Financial forecasts

Analysts anticipate the company will become profitable, generating positive earnings per share, in 2018, when graphite production begins. The company is expected to report a small loss in 2017 and the Street is forecasting earnings per share of 4 cents in 2018.

Revised recommendations

Analysts' expectations have been quite stable. Today, Marvin Wolff, the analyst at Paradigm Capital, increased his target price to $3 from $2.50.

Insider transaction activity

There has been mixed trading in the company by insiders with both buying and sellling.

On May 5, Alastair Neill, who sits on the board of directors, sold 80,240 shares at an average price per share of $1.30, leaving a portfolio balance of 22,560 shares.

Simon Marcotte, the company's vice-president of corporate development, has been an active buyer, steadily completing small trades. During the month of May, he made five small purchases, accumulating a total of 2,800 shares. In April, he acquired a total of 7,500 shares over the course of 15 trades. After all of these transactions, he held 1,331,200 shares in his portfolio.

Chart Watch

Year to date, the share price is up over 31 per cent with the share price recently breaking out to the upside in recent weeks. Prior to that, from September 2016 through to mid-May 2017, the stock price was locked in a trading range, trading largely between $1.20 and $1.50. Given the sharp move higher, the share price likely needs to digest these gains, and may pullback in the near-term.

In terms of key support and resistance levels. These is initial support around $1.70. Failing that, there is support between $1.45 and $1.50, around its 50-day moving average (at $1.46). The share price has overhead resistance around $1.85, and after that around $2.


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, financial forecasts, 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 indices 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.

If you want to receive an automatic link to all insider reports that I write, follow me on twitter @jennifer_dowty

TSX breakouts

Positive BreakoutsJune 7 close
ABT-TAbsolute Software Corp $8.08
AXY-TAlterra Power Corp. $5.70
BLX-TBoralex Inc $22.81
BYD.UN-TBoyd Group Income Fund $100.89
BPY.UN-TBrookfield Property Partners LP $31.09
CIGI-TColliers International Group Inc $74.36
BCB-TCott Corp $19.71
DOL-TDollarama Inc $129.02
GIL-TGildan Activewear Inc $40.37
HRX-THeroux-Devtek Inc $13.90
K-TKinross Gold Corp $6.26
KL-TKirkland Lake Gold Inc $11.16
MNW-TMitel Networks Corp $9.89
NFI-TNew Flyer Industries Inc $56.41
OR-TOsisko Gold Royalties Ltd $17.31
SEC-TSenvest Capital $199.00
SMU.UN-TSummit Industrial Income REIT $7.19
TH-TTheratechnologies Inc $7.59
Negative Breakouts
ALA-TAltaGas Ltd $29.68
ATH-TAthabasca Oil Corp $1.14
BMO-TBank of Montreal $90.40
BTE-TBaytex Energy Corp $3.56
BIR-TBirchcliff Energy Ltd $5.96
BDT-TBird Construction Inc $8.02
BDI-TBlack Diamond Group Ltd $2.97
BNE-TBonterra Energy Corp $15.53
CNQ-TCanadian Natural Resources Ltd $38.54
REF.UN-TCanadian Real Estate Investment Trust $48.07
CTC.A-TCanadian Tire Corp Ltd $150.00
CJ-TCardinal Energy Ltd $4.95
CVE-TCenovus Energy Inc $10.88
CHE.UN-TChemtrade Logistics Income Fund $17.37
CM-TCIBC $104.87
CPG-TCrescent Point Energy Corp $11.43
CR-TCrew Energy Inc $3.83
CRH-TCRH Medical Corp $7.54
DEE-TDelphi Energy Corp $1.16
DML-TDenison Mines Corp $0.56
ENF-TEnbridge Income Fund Holdings Inc $32.20
ECA-TEncana Corp $12.21
EFX-TEnerflex Ltd $16.94
EIF-TExchange Income Corp $32.75
GTE-TGran Tierra Energy Inc $3.06
GXO-TGranite Oil Corp $4.79
IMO-TImperial Oil Ltd $37.48
IPL-TInter Pipeline Ltd $26.09
LB-TLaurentian Bank of Canada $51.76
MEG-TMEG Energy Corp $4.55
MRT.UN-TMorguard Real Estate Investment Trust $14.68
NAL-TNewalta Corp $1.79
NPI-TNorthland Power Inc $23.09
NVU.UN-TNorthview Apartment REIT $20.69
NDQ-TNovadaq Technologies Inc $8.80
PONY-TPainted Pony Petroleum Ltd $4.49
PXT-TParex Resources Inc $15.34
PWT-TPenn West Petroleum Ltd $1.78
PEY-TPeyto Exploration & Development Corp $24.00
POW-TPower Corp of Canada $28.65
PD-TPrecision Drilling Corp $4.45
RUS-TRussel Metals Inc $23.99
SAP-TSaputo Inc $43.19
SVY-TSavanna Energy Services Corp $1.88
SCL-TShawCor Ltd $29.44
SPE-TSpartan Energy Corp $2.06
SPB-TSuperior Plus Corp $11.74
SGY-TSurge Energy Inc $2.06
TVE-TTamarack Valley Energy Ltd. $2.19
TOG-TTORC Oil & Gas Ltd $5.21
TOT-TTotal Energy Services Inc $13.09
TGL-TTransGlobe Energy Corp $1.87

Source: Bloomberg