Small caps outperformed the broader index in August by a wide margin.
The S&P/TSX SmallCap Index rallied 9.17 per cent, compared to a 4.79 per cent return for the S&P/TSX Composite Index.
There were broad gains within the TSX SmallCap Index with nine of the 11 sectors posting positive price returns, led by the materials, health care, consumer staples and consumer discretionary sectors, which rallied 19.09 per cent, 17.41 per cent, 10.99 per cent and 10.28 per cent, respectively.
The utilities and technology sectors were laggards with losses of 3.16 per cent and 2.33 per cent, respectively.
The top 10 performers in the TSX SmallCap Index during the month were:
- Tilray Brands Inc. (TLRY-T), up 139 per cent
- Canopy Growth Corp. (WEED-T), up 73 per cent
- Galiano Gold Inc. (GAU-T), up 61 per cent
- SSR Mining Inc. (SSRM-T), up 60 per cent
- Collective Mining Ltd. (CNL-T), up 43 per cent
- New Gold Inc. (NGD-T), up 40 per cent
- Avino Silver & Gold Mines (ASM-T), up 38 per cent
- Discovery Silver Corp. (DSV-T), up 35 per cent
- OceanaGold Corp. (OGC-T), up 33 per cent
- Jaguar Mining Inc. (JAG-T), up 33 per cent
Stocks with the largest positive revisions to their average target prices over the past month include:
- 5N Plus Inc. (VNP-T), up 52 per cent
- MDA Space Ltd. (MDA-T), up 33 per cent
- Jaguar Mining Inc. (JAG-T), up 33 per cent
- AutoCanada Inc. (ACQ-T), up 28 per cent
Stocks with the largest negative revisions to their target prices over the past month include:
- North American Construction Group Ltd. (NOA-T), down 29 per cent
- GDI Integrated Facility Services Inc. (GDI-T), down 24 per cent
- Prime Mining Corp. (PRYM-T), down 22 per cent
- Cronos Group Inc. (CRON-T), down 21 per cent
- Sylogist Ltd. (SYZ-T), down 20 per cent
For the first eight months of 2025, the S&P/TSX SmallCap Index increased 23.3 per cent. In comparison, the S&P/TSX Composite Index rallied 15.5 per cent.
The earnings season helped lift growth forecasts. According to Bloomberg, earnings in the TSX SmallCap Index are expected to grow 32 per cent over the next 12 months.
September is historically a volatile and challenging month for small-cap stocks. In six of the past seven years, the S&P/TSX SmallCap Index has posted losses. The TSX SmallCap Index rallied 3.5 per cent in Sept. 2024, declined 5.6 per cent in 2023, tumbled 7.31 per cent in 2022, declined 0.31 per cent in 2021, fell 4.83 per cent in 2020, dropped 3.05 per cent in 2019 and declined 1.65 per cent in 2018. In September, the S&P/TSX SmallCap Index posted losses in 11 of the past 20 years.
Now, here’s a look at analysts’ current target prices, recommendations, forecast returns and yields for all 240 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. Data is as of Sept. 2.
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.