Inside the Market's roundup of some of the Canadian small caps making news and on the move today. This post will be updated through the morning.
Shares in Redknee Solutions Inc. rose nearly 12 per cent Friday in the wake of an analyst upgrade.
RBC Dominion Securities analyst Paul Treiber said that the sharp recent price depreciation of Redknee Solutions shares is not the software company's fault, and makes the stock very attractive from a risk-reward perspective.
He believes the 45 per cent pullback in Redknee shares so far this year largely reflects the "lumpiness and communication" surrounding its late 2012 acquisition of Nokia Siemens Network's BSS business, and not "mix-execution."
"Risk-reward, in our view, is now more attractive on the shares, considering pending catalysts, Redknee's transition towards software is aligned with the market, and valuation is at trough levels," Mr. Treiber said.
Mr. Treiber upgraded Redknee to "outperform" from "sector perform" and maintains a price target of $5.50 (Canadian). The analyst consensus price target is $5.20, according to Thomson Reuters. Shares closed up 41 cents at $3.97.
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In other analyst actions today on Canadian small caps:
Raymond James upgraded Cervus Equipment to "outperform" from "market perform" and hiked its price target to $22.50 (Canadian) from $22.
Desjardins Securities upgraded Detour Gold to "buy" from "hold" but cut its price target to $12.50 (Canadian) from $16.
BMO Nesbitt Burns upgraded Secure Energy Services to "outperform" from "market perform" and hiked its price target to $30 (Canadian) from $26.
TD Securities upgraded ShawCor to "buy" from "hold" and raised its price target to $65 (Canadian) from $59.
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After its stock surged more that 6 per cent on Thursday, Alacer Gold Corp. released a statement acknowledging that it had been approached by third-parties regarding a potential acquisition.
"Although approached from time to time by third parties, the corporation has no current intention of pursuing any corporate transaction," reads the statement. "The corporation does not intend to comment further upon any potential corporate transaction unless and until it deems further disclosure is appropriate or required."
OceanaGold Corp. said that it was not currently in discussions with Alacer "regarding the terms of a transaction," although it has, since February 2014, "made a number of approaches to Alacer seeking to explore the merits of a potential business combination."
"OceanaGold would only be willing to pursue a transaction with Alacer with the cooperation of the Alacer board and on terms which would add value to both sets of shareholders."
Alacer Gold was up about 2 per cent in early TSX trading.
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Just Energy Group Inc., a retailer of natural gas and electricity, announced that it has agreed to sell its shares of Hudson Energy Solar Corp., its commercial solar development business, to a leading global energy company.
The purchase price will include the assumption of approximately $33-million (U.S.) in outstanding debt plus the payment of approximately $23-million (U.S.) cash at closing. Net proceeds will be used for general corporate purposes, including reducing the balance on Just Energy's revolving credit facility. The sale is contingent upon consents of various lenders.
Co-CEO Deb Merril stated: "When Just Energy set out to identify non-core assets that could be sold to reduce debt, the Hudson Solar division was one of the assets identified. This sale will result in a reduction in our overall debt level while allowing us to continue to focus on our core energy business. The sale of these commercial solar installations does not alter the Company's interest in residential solar as a possible growth driver for the future."
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Algonquin Power & Utilities Corp. said Liberty Utilities, APUC's regulated utility business, has agreed to buy regulated water distribution utility Park Water Company for $327-million (U.S.).
Park Water is owned by Western Water Holdings, a wholly-owned investment of Carlyle Infrastructure, and owns and operates three regulated water utilities in southern California and western Montana. The three utilities collectively serve approximately 74,000 customer connections and have more than 1,000 miles of distribution mains.
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Cervus Equipment Corp. announced the acquisition of four John Deere dealerships in Alberta. The acquisition will be paid for by cash and shares, with up to $2.2-million of the final purchase price to be paid in common shares of Cervus. Combined revenue of the four dealerships has averaged $87-million over the last three years.
Acumen Capital analyst Brian D. Pow commented, "This acquisition counters the prevailing view that John Deere is limiting CVL's growth in Canada. We see this as a positive development for CVL, proving once again that CVL is one of the few groups that has the capability to do larger dealership acquisitions. Based on Evergreen's average annual sales of $87.0-million over the last three years, we estimate CVL will be adding $5.0-million to $5.5-million of EBITDA using the midpoint of CVL's historical EBITDA margins." He raised his price target to $24.60 (Canadian) from $24 and maintained a "buy" rating.
Separately, Raymond James upgraded Cervus Equipment to "outperform" from "market perform" and hiked its price target to $22.50 (Canadian) from $22.
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Polar Star Mining Corp. and Iron Creek Capital Corp. announced that they have agreed to merge the two companies. The deal will see Polar Star acquiring all of the outstanding common shares of Iron Creek.
A non-binding Letter of Intent has been signed between the two companies detailing the basic terms of the proposed merger. The companies hope to have a final agreement within 30 days.
The combined companies will re-brand under a new name and will control more than 330,000 hectares of prospective exploration ground in northern Chile focused on copper, gold and silver. Newco will have three existing and active option and joint venture agreements with major mining companies.
Under the agreement, an Iron Creek shareholder would receive, in exchange for each Iron Creek share held by it, 3.82 common shares of Polar Star.
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Petro One Energy Corp. said it has received confirmation that Korea Myanmar Development Company (KMDC) is paying $500,000 towards a private placement that was announced earlier this summer.
Fears that the financing may fall through have hammered Petro One Energy's stock price in recent weeks. The funding is to be used to drill up to 11 oil wells on some of Petro One's oil and natural gas leases in Saskatchewan and Manitoba.
Petro One announced on Aug. 1, 2014, that it had arranged non-brokered private placements to raise a total of $6-million in conjunction with an initial $14-million drilling fund to be established by KMDC.
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Matica Enterprises Inc. has signed a definitive agreement to acquire 100 per cent of the Grumpy Lizard graphite property near Reno Nevada.
The Grumpy Lizard property hosts numerous exposed graphite outcrops that suggest graphite bodies of greater than 10 meters in width, which may run for several kilometres.
"The highly prospective nature of this property, when combined with the close proximity to the proposed Tesla Gigafactory make this a very strategic acquisition for Matica," says Matica Enterprises CEO Boris Ziger.
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Canamax Energy Ltd. announced that its board has approved an increased capital expenditure program for the period from June 2014 through to December 31, 2014 to approximately $20.5-million from the previously announced $14.0-million. The increase partially reflects additional drilling at Flood and Retlaw as a result of positive results from the current drilling program, the company said. It also announced an increase in its credit facilities.
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Brazil Resources Inc. announced that it has received a National Instrument 43-101 technical report on its Rea Uranium Project in the Western Athabasca Basin. The independent Technical Report summarizes historic exploration programs and highlights two prominent uranium targets for follow-up exploration.
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