On today’s TSX Breakouts report, there are 16 stocks on the positive breakouts list (stocks with positive price momentum), and 40 stocks are on the negative breakouts list (stocks with negative price momentum).
Discussed today is a stock that was last featured in late February. The share price subsequently rallied 70 per cent to a record high on May 29 before retreating. This is a stock that has delivered solid top line growth, which is expected to continue, revenue is forecast to jump 55 per cent in 2017. Over recent weeks, the stock price has declined 13 per cent and the recent price weakness may represent a buying opportunity for growth investors. The security highlighted below is Savaria Corp. (SIS-T).
The company currently pays its shareholders a quarterly dividend of 6.5 cents per share, or 26 cents on a yearly basis. This equates to an annualized dividend yield of 1.7 per cent.
Management is committed to returning capital to its shareholders. For the past two years, during the month of November, management has announced dividend increases. Most recently, on Nov. 2, 2016 the company declared a 30 per cent increase to its quarterly dividend, raising it to 6.5 cents per share from 5 cents per share. Prior to that, on Nov. 5, 2015, management announced a 25 per cent dividend hike, raising the quarterly dividend to 5 cents per share from 4 cents per share.
This small cap industrial stock, with a market capitalization of $623-million, is covered by five analysts, of which, all five analysts have buy recommendations.
The five firms providing research coverage are as follows in alphabetical order: Cormark Securities, GMP, Laurentian Bank Securities, National Bank Financial, and PI Financial Corp.
The Street is forecasting steady growth for the company. The consensus revenue estimate is $186.6-million in 2017, up 55 per cent from $119.7-million reported in 2016, and forecast to reach $258-million in 2018. The consensus EBITDA estimates are $31-million in 2017 and $44-million in 2018. The consensus earnings per share (EPS) estimates are 49 cents in 2017 and anticipated to reach 68 cents the following year.
Financial forecasts have been steady rising. For instance, four months ago, the consensus revenue estimates were $146-million for 2017 and $172-million for 2018. The Street was forecasting EBITDA of $27-million for 2017 and $34-million for 2018. The consensus EPS forecasts were 49 cents for 2017 and 63 cents the following year.
According to Bloomberg, the stock is trading at an enterprise value-to-EBITDA multiple of 13.2 times the consensus 2018 estimate, above the three-year historical average of 10.5 times but below its peak multiple of approximately 16.7 times reached back in April.
The consensus one-year target price is $17.75, implying the stock price may appreciate 17 per cent over the next 12 months. Individual target prices are as follows in numerical order: $17, $17.25, $17.75, $18.25, and $18.50.
Analysts have made positive revisions to their price targets given the acquisition of Span-America. For instance, in May, Nick Agostino from Laurentian Bank Securities raised his target price by $2.25 to $18.50. Stephen Harris, the analyst at GMP raised his target price to $18.25 from $17. Jason Zandberg from PI Financial lifted his target price to $17.75 from $13. Maggie MacDougall from Cormark Securities took her target price up to $17.25 from $13.50. Lastly, Leon Aghazarian from National Bank Financial raised his target price by $4 to $17.
Insider Transaction Activities
In June, Robert Berthiaume, who recently resigned from his director position on the company’s Board of Directors but remains employed with the company as the vice-president of European Affairs, sold 10,000 shares over the course of three trading sessions, at an average price per share above $16. At the end of June, his portfolio held 50,000 shares.
Year-to-date, the share price is up a stellar 39 per cent; however, after closing at a record high of $17.45 on May 29, the stock price has declined 13 per cent.
Should the negative price momentum persist, there is downside support around the low $14 level.
On a price recovery, there is initial overhead resistance around $16, at its 50-day moving average, and after that around $17.50.
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 reports that I write, follow me on twitter @jennifer_dowty
Wednesday's TSX Breakouts
|AXY-T||Alterra Power Corp.||$5.84|
|AI-T||Atrium Mortgage Investment Corp.||$12.30|
|CF-T||Canaccord Genuity Group Inc||$6.32|
|CCA-T||Cogeco Communications Inc||$83.05|
|ET-T||Evertz Technologies Ltd||$18.07|
|FIH.UN-T||Fairfax India Holdings Corp.||$16.35|
|MDI-T||Major Drilling Group International Inc||$8.60|
|SBB-T||Sabina Gold & Silver Corp||$2.13|
|SNC-T||SNC-Lavalin Group Inc||$58.03|
|WEF-T||Western Forest Products Inc||$2.46|
|WJA-T||WestJet Airlines Ltd||$24.91|
|ATH-T||Athabasca Oil Corp||$0.91|
|ATP-T||Atlantic Power Corp||$3.02|
|BXE-T||Bellatrix Exploration Ltd||$2.90|
|CAR.UN-T||Canadian Apartment Properties REIT||$32.25|
|REF.UN-T||Canadian Real Estate Investment Trust||$44.44|
|CSH.UN-T||Chartwell Retirement Residences||$15.02|
|CHP.UN-T||Choice Properties REIT||$13.23|
|CRH-T||CRH Medical Corp||$6.64|
|KWH.UN-T||Crius Energy Trust||$10.00|
|CRR.UN-T||Crombie Real Estate Investment Trust||$13.52|
|DIV-T||Diversified Royalty Corp||$2.50|
|WN-T||George Weston Ltd||$115.25|
|GMP-T||GMP Capital Inc||$3.09|
|KMP.UN-T||Killam Apartment REIT||$12.13|
|L-T||Loblaw Cos Ltd||$70.80|
|LUG-T||Lundin Gold Inc||$5.11|
|MRD-T||Melcor Developments Ltd||$14.26|
|NVU.UN-T||Northview Apartment REIT||$20.49|
|NWH.UN-T||NorthWest Healthcare Properties REIT||$10.39|
|PKI-T||Parkland Fuel Corp||$28.31|
|PHX-T||PHX Energy Services Corp||$2.08|
|PD-T||Precision Drilling Corp||$3.86|
|PLI-T||ProMetic Life Sciences Inc||$1.55|
|RSI-T||Rogers Sugar Inc||$6.04|
|SJR.B-T||Shaw Communications Inc||$27.66|
|SPB-T||Superior Plus Corp||$11.12|
|TDG-T||Trinidad Drilling Ltd||$1.80|
|TNT.UN-T||True North Commercial REIT||$6.11|
|VET-T||Vermilion Energy Inc||$38.74|
|WDO-T||Wesdome Gold Mines Ltd.||$2.69|
|WRG-T||Western Energy Services Corp||$1.55|
Follow Jennifer Dowty on Twitter:
- Savaria Corp$13.80+0.10(+0.73%)
- Updated August 16 3:59 PM EDT. Delayed by at least 15 minutes.