Friday's small-cap stocks to watch

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Inside the Market's roundup of some of the Canadian small caps making news and on the move today. This post will be updated during the trading day.

Avigilon Corp. missed estimates as it reported a second-quarter EPS of 6 cents and a fully diluted EPS of 12 cents compared to analyst expectations of 16 cents. The company reported that revenues had risen 66 per cent to a record $65.2-million from the year prior, while adjusted EBITDA was also 61 per cent higher. Excluding foreign exchange and acquisition-related costs, adjusted earnings were up 49 per cent to $5.7-million compared to the year prior.

At least six analysts cut their price targets on the stock this morning in response to the weak earnings report. The stock plunged 16 per cent at today's TSX open.

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Gasfrac Energy Services Inc. reported earnings that came in well below Street expectations and also announced a business review to improve shareholder value.

Revenue of $7.3-million came in well below the consensus call of $35.5-million. The company reported a loss per share of 50 cents, much worse than Street expectations of a 14-cent loss.

The company stated that should it be unable to obtain sufficient financing for ongoing operations, strategic alternative measures including a sale of some or all assets would be considered.

TD Securities analyst Scott Treadwell blamed the poor results on reduced customer-specific activity. "We believe that GasFrac will have to seek new customers as it appears its core cliental are slowing down operations which drove the lion's share of its revenue. The shift to slickwater fracs continues to raise questions, as we believe the company does not have the scale to compete with the larger players in the space."

The company has stated it has sufficient cash and credit facilities to meet expected operational requirements.

Shares are down nearly 7 per cent in morning TSX trading.

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Enerflex Ltd. is one of the top gainers on the TSX today after reporting second-quarter earnings after the close of markets on Thursday that were well ahead of expectations.  Shares were up nearly 11 per cent in early afternoon trading.

TD Securities analyst Scott Treadwell raised his price target to $24 (Canadian) from $22 and reiterated a "buy" rating after reviewing the latest results.

Mr. Treadwell commented, "Enerflex's Q2 results were well ahead of expectations, as activity and revenues picked up and margins moved back towards normal levels. Bookings of $414 million were well in excess of our estimate of $265 million. Enerflex's recent acquisition of Axip had no contribution to the quarter as it closed the acquisition at the end of June. Looking ahead, we believe that the addition of the Axip team and business should bulk up Enerflex's offerings in Latin America especially."

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Shares of Tekmira Pharmaceutical Corp. were up 38 per cent in early afternoon trading today, after a regulator cleared its experimental Ebola drug for potential use in humans infected with the virus.

The U.S. Food and Drug Administration told Tekmira that it had modified the full clinical hold on the drug to a partial clinical hold, the company said in a statement after markets closed on Thursday.

Tekmira's Ebola treatment is one of three worldwide that have shown especially promising results in monkeys, but it is unproven in humans.

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Redknee Solutions Inc. shares are down a further 10 per cent this afternoon after plunging 15 per cent Thursday on a disappointing earnings report.

Read more on what has investors running scared, and investor and analyst reaction, in our small caps roundup from Thursday.

Pengrowth Energy Corp. reported a second-quarter net loss of 2 cents per share, less than the 10 cent per share loss of a year ago.

TD Securities analyst Aaron Bilkoski  commented, "Pengrowth's Q2 operational results met our expectations and production/capital spending guidance was unchanged. Progress at its transformative Lindbergh SAGD project progressed as planned, while the company continues to meet/exceed type curves at its non-thermal operations (primarily Cardium)."

"With the quarter in line with our expectations, we remain optimistic about Lindbergh coming on stream in early 2015. With this, we expect year over year improvements in Pengrowth's production, cash flow, payout ratio, and leverage ratios," he added.

He reiterated a "buy" rating and $10 (Canadian) price target. Shares are down 1 per cent in early trading.

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Stella-Jones Inc. reported earnings per diluted share of 42 cents, up from 38 cents a year ago, and sales rose to $344.7 million from $280,894. "As anticipated, higher costs for untreated railway ties had a negative effect on profitability. However, strong sales growth and our continued focus on optimizing our plant network resulted in a year-over-year increase in net income," commented CEO  Brian McManus. "We expect healthy demand for our core products for the remainder of the year driven by a better economy and sound fundamentals in our main sectors of activity. With regards to higher cost for untreated railway ties, margins will be impacted in the short term, until we are able to adjust selling prices as per provisions in most of Stella-Jones' multi-year contracts."

Acumen Capital Research analyst Brian Pow maintained a "buy" rating and 12-month price target of $35.50 (Canadian) after reviewing the results. He said Stella-Jones surpassed his sales forecasts but missed on margins, EBITDA, and earnings per share. "The outlook for product demand remains positive in our view with numerous catalysts to drive the top line. The tie supply issue has turned the corner and margins should gradually improve going forward, setting SJ up for a positive performance in fiscal 2015," he said in a note to clients.

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Parkland Fuel Corp. missed estimates with an EPS of 9 cents versus the consensus estimates of 15 cents. While revenues were up by 40 per cent, gross profit fell 4 per cent to $123.3-million from $128.9-million the year prior. Parkland said volumes excluding acquisitions decreased by 6 million litres year-to-year due to low margin wholesale fuel sales in certain markets. The company also recently finished a review of its fuel tax transactions, identifying a shortfall of $9.6-million, with the company saying that "no further prior period corrections are required to any individual prior year financial statements." Shares have risen 10 per cent year-to-date, but were down 2.5 per cent this morning on the TSX.

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Denison Mines Corp. beat expectations with a loss of 2 cents per share compared to estimates of a 8-cent loss. Revenues declined to $2.3-million from $2.9-million the year before, with the losses primarily due to higher exploration expenses and foreign exchange losses, according to the company. Denison has also just finished an acquisition of Enexco Ltd, which will give Denison access to Enexco's uranium assets.

Shares were down 1 per cent in early trading.

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Perpetual Energy Inc. reported earnings per share of 2 cents in second quarter, reversing from a 3-cent loss a year ago.

TD Securities analyst Aaron Bilkoski commented, "Second-quarter cash flow exceeded both TD and consensus expectations, owing to the attractive combination of strong production, better-than-expected realized pricing, and lower operating costs.  In our view, the focus should remain on the material transition Perpetual has undergone in the past several months, rather than quarterly results, which are simply an icing on the cake. ... In our view, Perpetual is a turnaround story. Although we acknowledge that Perpetual will not fit everyone's investment criteria, we firmly believe that the company is significantly stronger than it was only one quarter ago, and we do not believe this has been fully reflected in the share price," he commented.

He maintained a "buy" rating and $3 (Canadian) price target. Shares were up 2 per cent in early TSX trading.

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Arsenal Energy Inc. reported second-quarter revenues of $30.9-million for the second quarter, up from $22.4-million the year before. But the company posted a loss of 2 cents per share as operating costs increased at its Alberta operations.

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Capstone Mining Corp. reported its second-quarter results. Laurentian Bank Securities analyst Chris Chang commented, "Capstone reported Q2/14 earnings of US$17 million or US$0.04 per share, below our estimate of US$32 million or US$0.08 per share and consensus of US$0.06 per share. The earnings miss was largely due to higher costs, exploration expenses, and a higher than anticipated tax rate. Despite the weak earnings result, we do not see any changes to our investment thesis. Given Capstone's relatively flat copper production profile for the next 3-years, we believe the company could return to its growth through acquisition strategy as the company's existing portfolio of projects are longer-term in nature."

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AuRico Gold Inc. came in under expectations in the second quarter, reporting an adjusted loss of 6 cents per share compared to the consensus 4 cent loss. Revenues increased to $75.5-million from $57.6-million, while gold production was up to a record 56,198 ounces from 38,186 ounces, marking the eighth consecutive quarter of record gold production.

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GLV Inc. posted fiscal 2015 first-quarter results well under expectations, reporting a loss of $3.1 million or 7 cents per share, compared to the estimates of a 2-cent gain. Backlog was down 6 per cent from the previous quarter, though revenues were up 11 per cent to $161.2-million compared to the previous year. GLV A shares have lost 26 per cent so far this year.

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Halogen Software Inc. met expectations with an 11 cent loss per share. Revenues increased slightly to $13.6-million, up from $11.4-million the year before. The company also said that recurring revenue increased 26 per cent from the year before.

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Kinaxis Inc., which delivers cloud-based applications, came in well under estimates in the second quarter with a loss of 7 cents per share compared to estimates of an 8-cent gain. Although revenues were up 14 per cent to $17.9-million compared to the previous year, the company said that the loss was driven primarily by the "higher fair value, non-cash adjustment on the redeemable preferred share liability."

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AutoCanada Inc. said its second-quarter revenues increased 19.8 per cent to $465.3-million, with adjusted earnings per share rising by 12.5 per cent to 61 cents.

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GMP Capital Inc. reported its second-quarter revenue rose to $80.4-million from $60.3-million a year ago, with adjusted profit per share of 16 cents versus a loss of 2 cents a share a year ago. The company said business activity, especially underwriting, was more robust during the quarter.

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Enerplus Corp. reported its second-quarter results this morning. It said it achieved record production of about 104,000 barrels of oil equivalent a day, the highest in its history, and as a result of operational improvements, has increased its annual average production guidance for 2014 by 4,000 barrels of oil equivalent per day.

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Sprott Resource Corp. announced today that its investee company, Independence Contract Drilling, Inc., has priced its initial public offering of 10 million shares of common stock at $11 per share.

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Phoenix Gold Resources Corp. intends to complete a non-brokered private placement of up to $450,000 and has made arrangements to settle $50,000 (U.S.) in debt that was owed to a creditor in connection with consulting services provided to the company.

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Keyera Corp. is realizing higher volumes of natural gas, with more on the way, RBC Dominion Securities analyst Robert Kwan said.

The midstream natural gas company posted a big earnings beat on Thursday, largely as a result of a volume pickup in gathering and processing natural gas products.

"With increased producer activity aimed at liquids-rich gas plays … Keyera's assets are well positioned to capture increasing volumes via existing facilities, expansions of existing facilities and higher natural gas liquids production regardless of where in the field it comes from," Mr. Kwan said.

He upgraded Keyera stock to "outperform" from "sector perform" and raised his price target to $97 (Canadian) from $79.

Both BMO Nesbitt Burns and TD Securities also raised their price targets on Keyera, to $85 from $81, and to $86 from $75, respectively

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Industrial Alliance Securities upgraded Pason Systems Inc. to "top pick" from "strong buy" and raised its price target to $41.50 (Canadian) from $37.

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TD Securities upgraded Just Energy to "hold" from "reduce" with a price target of $5.50 (Canadian).

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Raymond James upgraded Bird Construction to "strong buy" from "outperform" and hiked its price target to $17 (Canadian) from $16.

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Raymond James upgraded Semafo to "outperform" from "market perform" and hiked its price target to $6 (Canadian) from $5.