In April, the SmallCap Index widened its gain over the broader index. The S&P/TSX SmallCap Index climbed 6.6 per cent, while the S&P/TSX Composite Index rallied 3.7 per cent. For the first four months of the year, the S&P/TSX SmallCap Index is up 18.3 per cent compared to a 7.1 per cent price return for the S&P/TSX Composite Index.
Last month, there were eight sectors in the TSX SmallCap Index that posted positive price returns – technology, industrials, health care, materials, real estate, energy, utilities and consumer discretionary with gains of 17.3 per cent, 13.7 per cent, 13.4 per cent, 6.3 per cent, 5.7 per cent, 5.4 per cent, 4 per cent and 3.6 per cent, respectively.
Amongst the sector laggards were consumer staples, financials and communication services with negative price returns of 4.1 per cent, 1 per cent and 0.8 per cent, respectively.
The top 10 performers in the TSX SmallCap Index last month were:
- G2 Goldfields Inc. (GTWO-T), up 93 per cent
- Hammond Power Solutions Inc. (HPS-A-T), up 65 per cent
- BlackBerry Ltd. (BB-T), up 63 per cent
- Curaleaf Holdings Inc. (CURA-T), up 59 per cent
- Lithium Argentina AG (LAR-T), up 49 per cent
- Northern Dynasty Minerals Ltd. (NDM-T), up 47 per cent
- Obsidian Energy Ltd. (OBE-T), up 47 per cent
- Almonty Industries Inc. (AII-T), up 45 per cent
- Lithium Americas Corp. (LAC-T), up 41 per cent
- Ballard Power Systems Inc. (BLDP-T), up 38 per cent
Stocks with large positive revisions to their average target prices over the past month include:
- Saturn Oil & Gas Inc. (SOIL-T), 43 per cent to $6.63 from $4.64
- Vermilion Energy Inc. (VET-T), 31 per cent to $22.20 from $16.89
- Obsidian Energy Ltd. (OBE-T), 29 per cent to $15.38 from $11.88
- Parex Resources Inc. (PXT-T), 29 per cent to $32.50 from $25.28
Now, here’s a look at analysts’ current target prices, recommendations, forecast returns and yields for all securities in the S&P/TSX SmallCap Composite 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.
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