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On today’s TSX Breakouts report, there are eight stocks on the positive breakouts list (stocks with positive price momentum), and 60 stocks are on the negative breakouts list (stocks with negative price momentum).

Discussed today is a stock that may resurface on the positive breakouts list. This small-cap stock has been a stellar performer with its share price more than doubling in value year-to-date. The four analysts covering the company all have “buy” recommendations on the stock, anticipating a further 66-per-cent gain over the next 12 months. The security highlighted today is Trilogy Metals Inc. (TMQ-T).

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

The company

Vancouver-based Trilogy Metals is an exploration and development company with operations in the U.S. The company’s development activities are focused on two projects (Arctic and Bornite) located in a prolific copper district- the Ambler mining district in northwest Alaska. 2019 is anticipated to be an active year for Trilogy Metals as the company continues to take steps towards becoming a copper producer.

Arctic deposit: This is a high-grade copper deposit. According to the Pre-Feasibility Study [PFS], the Arctic deposit has the following economics: a payback period of two years with a copper price of $3/pound and a three year payback with a $2/pound copper price. Average annual production is expected to be 160-million pounds of copper, 200-million pounds of zinc, 30-million pounds of lead, 30,000 ounces of gold and 3-million ounces of silver for the life of the mine. The mine life is estimated at 12 years. Total all-in cash accosts are estimated at 63 cents/pound of copper. Permitting and a feasibility study are the next key milestones for this project. Management targets submitting permits for the project in the first half of 2019 with a feasibility study to follow in 2020.

Bornite project: This is also a high-grade copper deposit. A National Instrument 43-101 Technical Report detailed indicated resources of 900-million pounds of copper and inferred resources of 5.5-billion pounds of copper and 77-million pounds of cobalt. Key near-term catalysts for this project are positive exploration results.

In terms of infrastructure, a roughly 200 mile road connecting the Ambler mining district to ice-free ports called the Ambler Mining District Industrial Access Project [AMDIAP] is currently advancing with the Alaska Industrial Development and Export Authority [AIDEA] proposed to build the road. A draft Environmental Impact Statement [EIS] is expected to be released for public comment by March 2019.

The company’s shares are duo-listed, trading on both the Toronto Stock Exchange and the NYSE American Stock Exchange under the same ticker, TMQ.

The company’s fiscal year-end is Nov. 30.

Dividend policy

The company is focused on growth and currently does not pay its shareholders a dividend.

Analysts’ recommendations

This small cap stock, with a market capitalization of $378-million, is covered by four analysts, and all four analysts have ‘buy’ recommendations.

The firms providing research coverage on the company are as follows in alphabetical order: Cantor Fitzgerald, Cormark Securities, Fundamental Research, and Roth Capital Partners.

Revised recommendations

Earlier this month, Stefan Ioannou, the analyst from Cormark Securities, lifted his target price to $3.25 from $3.

Valuation

The stock is commonly valued on a price-to-net asset value basis.

The average one-year target price is $4.75, implying the share price may appreciate 66 per cent over the next 12 months. Individual target prices range from a low of $3.25 from the analyst at Cormark Securities to a high of U.S. $4.50 (approximately Cdn$5.80 based on the current foreign exchange rates) from the analyst at Roth Capital Partners.

Insider transaction activity

Most recently, on Sept. 21, Bob Jacko, vice-president – projects, purchased 15,000 shares at a price per share of $1.9459, initiating a portfolio position. Mr. Jacko assumed this senior management position earlier this year.

Chart watch

The share price has been in an uptrend since the beginning of 2016, with the share price steadily making higher highs and higher lows. Both the 50-day and 200-day moving averages are rising. Year-to-date, the stock price has doubled in value, rising 106 per cent.

Looking at key resistance and support levels, the share price has an initial ceiling of resistance around $3. After that, the next major overhead resistance level is around $3.50. Looking at the downside, there is strong technical support between $2.50 and $2.65, close to its 50-day moving average (at $2.67).

The stock is thinly traded on the Toronto Stock Exchange with a three-month historical daily average trading volume of approximately 14,000 shares. Consequently, the share price can be volatile. On the NYSE American Stock Exchange, liquidity improves with the three-month historical daily average trading volume of approximately 170,000 shares.

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.

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 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.

Positive Breakouts Nov. 23 close
BCE-T BCE Inc $56.20
CU-T Canadian Utilities Ltd $31.85
DHX-T DHX Media Ltd $3.34
EMP.A-T Empire Co Ltd $25.43
JE-T Just Energy Group Inc $5.42
L-T Loblaw Cos Ltd $61.00
MRU-T Metro Inc $44.97
VNR-T Valener Inc $19.95
Negative Breakouts
VNP-T 5N Plus Inc $2.78
AGT-T AGT Food & Ingredients Inc $15.29
BOS-T AirBoss of America Corp $8.11
AGI-T Alamos Gold Inc $4.41
CLIQ-T Alcanna Inc. $7.49
AR-T Argonaut Gold Inc $1.28
BDI-T Black Diamond Group Ltd $2.24
PXX-T BlackPearl Resources Inc $0.96
BEI-UN-T Boardwalk Real Estate Investment Trust $42.51
BNE-T Bonterra Energy Corp $9.14
BPF-UN-T Boston Pizza Royalties Income Fund $15.15
CFW-T Calfrac Well Services Ltd $3.26
CNQ-T Canadian Natural Resources Ltd $33.59
CWB-T Canadian Western Bank $27.89
CJ-T Cardinal Energy Ltd $2.93
CVE-T Cenovus Energy Inc $9.25
CGX-T Cineplex Inc $25.71
CPG-T Crescent Point Energy Corp $4.36
DII.B-T Dorel Industries Inc $18.55
FSZ-T Fiera Capital Corp $11.56
FRII-T Freshii Inc. $2.56
FEC-T Frontera Energy Corp. $14.05
GLXY-T Galaxy Digital Holdings Ltd. $1.34
BUS-T Grand West Transportation Group Inc. $0.82
HSE-T Husky Energy Inc $15.35
IPCO-T International Petroleum Corp. of Sweden $4.52
KEL-T Kelt Exploration Ltd $4.63
KML-T Kinder Morgan $15.62
LNF-T Leon's Furniture Ltd. $14.76
MEQ-T Mainstreet Equity Corp $45.14
MX-T Methanex Corp $74.17
MTL-T Mullen Group Ltd $12.67
NEO-T Neo Performance Materials Inc. $14.23
HIP-T Newstrike Resources Ltd. $0.43
NVA-T NuVista Energy Ltd $4.06
PONY-T Painted Pony Energy Ltd $2.01
PXT-T Parex Resources Inc $16.18
PGF-T Pengrowth Energy Corp $0.74
PL-T Pinnacle Renewable Holdings Inc. $12.85
PTS-T Points International Ltd $14.16
PG-T Premier Gold Mines Ltd $1.59
QTRH-T Quarterhill Inc. $1.46
RET.A-T Reitmans Canada Ltd $3.72
RFP-T Resolute Forest Products Inc. $14.14
SES-T Secure Energy Services Inc $7.78
VII-T Seven Generations Energy Ltd $11.07
SCL-T ShawCor Ltd $20.31
S-T Sherritt International Corp $0.50
SIL-T SilverCrest Metals Inc. $2.99
TOY-T Spin Master Corp. $40.66
SII-T Sprott Inc $2.73
SPB-T Superior Plus Corp $10.41
TVE-T Tamarack Valley Energy Ltd. $2.21
X-T TMX Group Ltd $77.00
TOT-T Total Energy Services Inc $9.30
TCW-T Trican Well Service Ltd $1.25
VLN-T Velan Inc $9.78
WPRT-T Westport Innovations Inc $2.73
YGR-T Yangarra Resources Ltd. $2.85
ZYME-T Zymeworks Inc. $15.27

Source: Bloomberg

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 24/05/24 3:27pm EDT.

SymbolName% changeLast
TMQ-T
Trilogy Metals Inc
+1.45%0.7

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