Small caps continue to outperform the broader index. In Oct., the S&P/TSX SmallCap Index rallied 2.2 per cent, compared to a 0.79 per cent price return for the S&P/TSX Composite Index.
As of Oct. 31, it is up 36.94 per cent year-to-date versus a 22.37 per cent gain for the TSX Composite Index.
In terms of sector performance, seven of the 11 sectors in the TSX SmallCap Index posted positive price returns led by industrials, technology, energy and communication services, which rallied 9.53 per cent, 6.42 per cent, 5.17 per cent and 3.59 per cent, respectively. Consumer staples, real estate and consumer discretionary were the leading sector laggards with losses of 7.16 per cent, 4.63 per cent and 4.13 per cent, respectively.
The top 10 performers in the TSX SmallCap Index during the month were:
- Hammond Power Solutions (HPS.A-T), up 73 per cent
- Northern Dynasty Minerals (NDM-T), up 68 per cent
- Bitfarms (BITF-T), up 42 per cent
- Energy Fuels (EFR-T), up 35 per cent
- Tenaz Energy (TNZ-T), up 33 per cent
- Ballard Power Systems (BLDP-T), up 32 per cent
- Aecon Group (ARE-T), up 30 per cent
- Arizona Sonoran Copper Co (ASCU-T), up 29 per cent
- Lithium Argentina AG (LAR-T), up 27 per cent
- Profound Medical (PRN-T), up 23 per cent
Amongst the stocks with large positive revisions to their average target prices over the past month include Andean Precious Metals (APM-T) whose average target price increased 114 per cent, Energy Fuels (EFR-T), whose average target price increased 57 per cent, Freegold Ventures (FVL-T), whose average target price increased 56 per cent, and Bitfarms (BITF-T), whose average target price increased 47 per cent.
November is historically an unpredictable month for the TSX SmallCap Index, often characterized by large swings. In seven of the past ten years, the S&P/TSX SmallCap Index has posted gains.
The TSX SmallCap Index rallied 2.52 per cent in November of 2024, advanced 4.63 per cent in 2023, climbed 6.24 per cent in 2022, declined 3.73 per cent in 2021 and jumped a staggering 17.4 per cent in 2020. However, between 2005 and 2014, the SmallCap Index declined in seven of those 10 years and posted double-digit losses in 2007 and 2008.
Now, here’s a look at analysts’ current target prices, recommendations, forecast returns and yields for all 237 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 Oct. 31.
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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