Small-cap stocks delivered spectacular gains in May.
The S&P/TSX SmallCap Index jumped 7.01 per cent, outperforming the 5.37 per cent price return for the S&P/TSX Composite Index.
The top performing sectors were consumer discretionary, energy and industrials with double-digit price returns of 11.61 per cent, 11.22 per cent and 10.16 per cent, respectively. Only one sector had a negative price return, health care, realizing a loss of 0.38 per cent.
Year-to-date, the S&P/TSX SmallCap Index is up 5.21 per cent, just shy of the 5.85 per cent price return realized by the S&P/TSX Composite Index.
The top 10 performers in the S&P/TSX SmallCap Index during the month were:
- Canada Goose Holdings Inc. (GOOS-T), rallying 44 per cent
- Avino Silver & Gold Mines Ltd. (ASM-T), up 44 per cent
- AutoCanada Inc. (ACQ-T), up 40 per cent
- NFI Group Inc. (NFI-T), up 34 per cent
- NGEx Minerals Ltd. (NGEX-T), up 30 per cent
- Bird Construction Inc. (BDT-T), up 28 per cent
- Wajax Corp. (WJX-T), up 28 per cent
- Magellan Aerospace Corp. (MAL-T), up 27 per cent
- Source Energy Services Ltd. (SHLE-T), up 25 per cent
- OceanaGold Corp. (OGC-T), up 25 per cent
Stocks with positive changes to their target prices of 10 per cent or more over the past month include three energy stocks, two consumer discretionary stocks, two industrial stocks, two stocks from the materials sector, one consumer staples stock and one health care stock. They are:
- TerraVest Industries Inc. (TVK-T), up 27 per cent.
- Westshore Terminals Investment Corp. (WTE-T), up 20 per cent
- Magellan Aerospace Corp. (MAL-T), up 17 per cent
- IsoEnergy Ltd. (ISO-T), up 17 per cent
- Avino Silver & Gold Mines Ltd. (ASM-T), up 14 per cent
- Discovery Silver Corp. (DSV-T), up 14 per cent
- Extendicare Inc. (EXE-T), up 13 per cent
- Peyto Exploration & Dev Corp. (PEY-T), up 12 per cent
- Canada Goose Holdings Inc. (GOOS-T), up 12 per cent
- High Liner Foods Inc. (HLF-T), up 11 per cent
- AutoCanada Inc. (ACQ-T), up 10 per cent
There were 24 stocks with negative revisions to their target prices of 10 per cent or more over the past month, of which most, 10 to be exact, were from the energy sector.
Now, here’s a look at analysts’ current target prices, recommendations, forecast returns and yields for all 242 securities in the S&P/TSX SmallCap Index grouped by sector and ranked according to their expected price returns (excluding dividend and distribution income). The posted target price for each security is an average of all available target prices from analysts. A target price typically reflects an expected share or unit price 12 months from now based on an analyst’s financial modelling, such as a discounted cash flow or sum-of-the-parts model. For the yield provided, Bloomberg calculates this figure by annualizing the most recent announced dividend or distribution value.
It’s important to note that high target prices, which imply stellar returns that seem unbelievable may be just that - unrealistic. At times, when a stock price falls analysts may maintain their bullish expectations, inflating the forecast return. In addition, an outlier (extreme target price) can skew the average target price, to the upside or downside, particularly when the number of analysts covering a stock is low. Don’t let a huge projected gain lure you into a position – it is critical to look at the company and industry fundamentals.
Click here to download an Excel version of the report.
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