Canadian small caps have been outperforming large cap stocks so far this year and Martin Roberge, North American Portfolio Strategist & Quantitative Research, Canaccord Genuity, says conditions are right for that performance to continue. Roberge states the case for small caps and we'll show you Canaccord's top picks.
Inside the Market's roundup of Canadian small caps making news and on the move today. This post will be updated during the trading day.
The precious metals arm of private equity firm Waterton Global Resource Management has hiked its hostile bid for Chaparral Gold Corp. by 10 per cent, up to 55 cents cash per share from 50 cents. The new valuation puts the gold miner at $64.7-million, up $5.9-million. Waterton also withdrew a requirement that the firm would receive two-thirds of the company's shares. Chaparral has consistently rebuffed the bid, stating that Waterton's valuation is too low and that the company would be "aggressively pursuing value-enhancing alternatives," according to a March press release.
Shares in Chaparral Gold spiked more than 5 per cent at today's TSX open, hitting a new 20-day high. Its shares have risen just over 70 per cent year-to-date.
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Pine Cliff Energy Ltd. announced Thursday after markets closed that it will acquire natural gas assets in Alberta and Saskatchewan for $100-million. Upon completion, Pine Cliff is expected to have a base asset production of over 11,000 barrels of oil equivalent per day, with the company expecting to raise its 2014 guidance and significantly increase its free cash flow.
Jennings Capital raised its price target to $1.85 (Canadian) per share from $1.65 and reiterated a "buy" rating on the news, noting the deal should significantly boost the company's earnings. Jennings also raised its 2015 production and cash flow estimates by 66 per cent and 50 per cent, respectively. Clarus Resarch raised its price target to $2.50 (Canadian) from $2 and maintained a "buy" rating.
Shares in the company surged 14 per cent at today's open and are now up more than 50 per cent so far this year. The stock price is now trading at 30 times forward one-year earnings.
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Pretium Resources Inc. said Friday it has filed a prospectus with regulators to allow the company to offer up to $600-million (U.S.) of common shares, debt securities, preferred shares, subscription receipts, units and warrants from time to time over the next two years. Proceeds are expected to be aimed at advancing its high-grade gold Brucejack Project, working capital requirements and for other general corporate purposes.
Shares fell nearly 2 per cent at today's open.
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Increasing competition among institutional lenders in the commercial real estate market has prompted Timbercreek Mortgage Investment Corp. to lower its monthly dividend to 6 cents from 6.7 cents. The company reported that it is expecting lower earnings for the first half of 2014.
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Desjardins Securities today raised its price target on EnerCare Inc. to $15.50 (Canadian) from $11.50 and maintained a "hold" rating. Augustus Advisors Thursday released a letter to shareholders expressing its desire to gain access to certain non-public information of EnerCare and to potentially make a premium offer for the company's shares. EnerCare's board sees Augustus' valuation range as being below full value and has therefore denied access to additional information. "With the two sides at an impasse, the risk is that Augustus abandons its efforts and disposes of its stake, which would likely pressure the shares," cautioned Desjardins analyst Chase Bethel.
RBC Dominion Securities Friday also raised its price target, to $14 (Canadian) from $12, while maintaining a "sector perform" rating. "Although the Board stated that TSSP's offer of $13.50–15.00/share is not sufficient to consider negotiations, we believe it may lead to the eventual acquisition of the company," commented RBC analyst Nelson Ng.
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Inter Pipeline Ltd. has completed the first phase of its Polaris pipeline expansion, paving the way for shipments of oil to commence shortly. The company's current deal to ship 350,000 barrels of oil per day to a joint venture between Cenovus Energy and ConocoPhillips Canada Resources Corp. will make use of approximately 50 per cent of the newly expanded pipeline capacity. The deal is expected to bring in around $90-million in annual EBITDA. Shares have risen half a per cent since the announcement.
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Asset management company Dundee Corp. has announced that it will sell approximately 4.5 million units of DREAM REIT and 8.6 million units of DREAM Global REIT worth $207-million. The funds will provide extra working capital for Dundee's newly named CEO Ned Goodman, who took over the position from his father three days ago. Shares have fallen almost 1.5 per cent so far since the announcement.
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Almaden Minerals Ltd. has announced that it plans to raise up to $6-million through a private placement. The company will sell up to 4-million shares at $1.50 per unit, with the funds to go towards further developing its Ixtaca gold and silver mine in Mexico. Shares are holding steady in mid-afternoon TSX trading.
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Dundee Energy Ltd. announced second-quarter financial results Thursday after markets closed, reporting a net loss of $0.1-million, up from the $0.5-million net loss at the same time last year. Production volumes of natural gas were up while oil was down as compared to last year, with the former due to the acquisition of natural gas assets in southern Ontario. Revenue was at $11.1-million compared to $9.7-million the same time last year, a rise that was largely attributed to improving commodity prices.
Severe weather has also prevented Dundee from completing scheduled projects, which has further hindered oil production. Shares have gained 17 per cent over the last week, though have overall lost 27 per cent so far this year.
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Orvana Minerals Corp. reported late Thursday that it will begin an accelerated payment of long-term debt on its Spanish mine. The debt repayment is part of a restructuring that the company announced last month. Orvana will shrink its debt to $8.075-million (U.S.) from $17.6-million after having already hacked away almost $20-million, in part using funds generated from a sale of a mine in Michigan. Shares in the company have increased over15 per cent since the beginning of June.
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Ivanhoe Energy Inc. said today it has scheduled a special meeting of shareholders for Aug. 13, 2014 to give shareholders the opportunity to approve a proposal for a reverse stock split. The proposal is aimed at regaining compliance with Nasdaq's minimum bid price requirements. Shares are down 8 per cent in early TSX trading.
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Amerigo Resources Ltd. said Friday its copper production in the second quarter from its operations near Rancagua, Chile, were below target due to low grades for both fresh and old tailings.
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Uranerz Energy Corp. said today that due to demand, it has increased the size of its previously announced offering of units, to $12-million (U.S.) from $10-million. Units have been priced at $1.25 (U.S.) each. The company announced the initial unit offering Thursday, sending its shares down 12 per cent.
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Canaccord upgraded IBI Group to "speculative buy" from "hold" and hiked price target to $2.75 (Canadian) from $1.50.
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Canaccord upgraded Mainstreet Equity to "buy" from "hold" and raised its price target to $44 (Canadian) from $39.25. TD Securities also raised its price target to $43 from $40 and maintained a "hold" rating.
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Canaccord Genuity downgraded UrtheCast to "hold" from "speculative buy" and cut its target to $1.50 (Canadian) from $3.50.
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Raymond James upgraded Winpak to "outperform" from "market perform" and hiked its price target price to $30 (Canadian) from $27.50.
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Raymond James initiated coverage on Dundee Precious Metals with an "outperform" rating and $7.50 (Canadian) price target.
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Cantor Fitzgerald Canada initiated coverage on BSM Technologies with a "buy" rating and $3 (Canadian) price target.