A weekly look at some small-cap stocks making news - or about to.
As of market close on Thursday, March 6, Canada’s S&P/TSX SmallCap Index was up about 8 per cent over the past 12 months. The Russell 2000 in the U.S. was down nearly 1 per cent over the same period.
Small-cap spotlight
Here’s one small cap in Canada that investors may want to put on their radar screen.
Shares of MDA Space Ltd. (MDA-T) soared by as much as 17 per cent in early Friday trading after the Toronto-based robotics and satellite company reported strong fourth-quarter earnings and a 2025 outlook that beat expectations.
MDA chief executive officer Mike Greenley also told analysts in a conference call that the company saw potential U.S. tariffs as “manageable.”
Before markets opened on Friday, MDA reported revenues of $346.6-million, up 69 per cent from $205-million a year earlier, driven by its satellite systems business. The expectation was for revenue of $320-million, according to S&P Capital IQ estimates.
Net income of $25.1-million was up 86 per cent from $13.5-million a year earlier. Adjusted net income of $35.1-million or 28 cents per share compared to $27.8-million or 23 cents a year earlier. The expectation was for earnings to come in at 27 cents per share in the fourth quarter.
The company said it expects revenue to be in the range of $315-million to $335-million for the first quarter, which is above expectations of $287.7-million, according to S&P Capital IQ.
It forecasted full year revenues to be in the range of $1.5-billion to $1.65-billion, representing year-over-year growth of approximately 45 per cent at the mid-point of that guidance. That’s well above the estimate of $1.39-billion.
The company said the outlook doesn’t include any potential impact from potential U.S. tariffs.
In the conference call, Mr. Greenley said 90 per cent of its backlog of $4.4-billion at the end of 2024 comes from geographies outside of the U.S. He also said its satellite manufacturing business is well diversified globally, with a little over a quarter of suppliers based in the U.S.
“To date, we have not seen any dampening in the desire of customers and potential customers to engage with us as a result of the tariff development and our opportunity pipeline remains very strong and similar to other companies, we are exploring strategies to mitigate the potential impact of any tariffs that might emerge,” he said, adding that the tariff impact is “manageable.”
When asked by an analyst to describe what he meant by “manageable,” Mr. Greenley said “all of our investigations of this [have] it as a manageable activity at the moment,” adding that “we do not have any bad news to give on that topic.”
Desjardins Securities analyst Benoit Poirier said in a Friday note that he expected a positive stock reaction to the earnings report “given the beat, deleveraging and significantly stronger-than-expected 2025 guidance (especially from a typically conservative management team).”
MDA stock has traded between a high of $30 and low of $11.44 over the past 52 weeks.
Small-cap summary
Other small caps making news this week:
Canfor Corp. (CFP-T) and its subsidiary Canfor Pulp Products Inc. (CFX-T) reported earnings after market closed Thursday.
Canfor reported fourth quarter sales of $1.29-billion compared to $1.23-billion a year earlier and ahead of expectations of $1.24-billion. Its net loss was $63.3-million or 53 cents per share versus a loss of $117.1-million a year earlier. The expectation was for a loss of 39 cents per share, according to S&P Capital IQ.
Canfor Pulp reported sales of $163.1-million down from $193.9-million a year earlier and below expectations of $186.8-million. Its net loss was $2.9-million or 4 cents per share versus a loss of $13.2-million or 20 cents a year earlier. The expectation was for a loss of 8 cents per share.
“While market conditions have showed some signs of improvement late in the fourth quarter and early into 2025, we continue to navigate the external challenges facing our business, including the availability of economically viable fibre and the actual and potential tariffs on exports into the U.S.,” Canfor Pulp CEO Stephen Mackie said in a release after markets closed on Thursday.
In its lumber outlook, Canfor said affordability constraints “combined with broader economic and political uncertainty” are expected to hurt demand for both new home construction and repair and remodeling activity in the short-term.
“On the supply side, permanent mill closures, particularly in Western Canada, along with fibre and market-related curtailments, are anticipated to give rise to some modest pricing improvement through the first quarter and into the second quarter of 2025,” the company stated.
In its outlook, Canfor pulp said plans are underway to “mostly offset” the impact of the tariffs on U.S. shipments.
“With its high quality, specialty product offering and market diversification, the company is well-positioned to respond to actual and potential tariffs,” it stated.
Canfor shares are down 5 per cent so far this year as of Thursday’s close and have traded between a high of $18.29 and low of $13.53 over the past 52 weeks.
Canfor Pulp shares are down 13 per cent so far this year and have traded between a high of $1.77 and low of 66 cents over the past year.
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Black Diamond Group Ltd. (BDI-T), the Calgary-based space rental and workforce accommodation company, reported fourth-quarter earnings that beat expectations.
After markets closed on Thursday, the company reported revenue of $132.7-million up from $103.4-million a year earlier and ahead of expectations of $105-million.
Profit of $9.3-million or 15 cents per share compared to a profit of $8.6-million or 13 cents a year ago. The result was ahead of expectations of 13 cents.
The stock is down 13 per cent so far this year as of Thursday’s close and has traded between a high of $10.27 and low of $7.40 over the past 52 weeks.
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Major Drilling Group International (MDI-T) reported revenue of $160.7-million for its third quarter ended Jan. 31, up 21 per cent from the $132.8-million recorded in the same quarter last year. The expectation was for revenue of $152.7-million, according to S&P Capital IQ.
The company, which reported after markets closed Thursday, said Its net loss was $9.1-million or 11 cents per share compared to a loss of $2.3-million or 3 cents per share a year earlier. The expectation was for a loss of 2 cents.
The stock is down 6 per cent so far this year as of Thursday’s close and has traded between a high of $10.39 and low of $6.98 over the past 52 weeks.
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Total Energy Services Inc. (TOT-T) reported fourth quarter revenue that beat expectations but profit that missed. It also increased its dividend by 11 per cent.
After markets closed on Thursday, the Calgary-based company reported revenue of $246.8-million, up 15 per cent from $213.8-million a year earlier. The result was ahead of expectations of $233-million, according to S&P Capital IQ estimates.
Net income of $10.1-million 26 cents per share compared to a loss of $7.7-million or 19 cents a year earlier. The expectation was for earnings of 36 cents per share.
Total Energy declared a dividend of 10 cents per share for the quarter ended March 31, up from 9 cents from the fourth quarter.
The stock is down 22 per cent so far this year as of Thursday’s close and has traded between a high of $12.44 and low of $8.88 over the past 52 weeks.
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Martinrea International Inc. (MRE-T) reported fourth-quarter sales of $1.15-billion down 11 per cent from $1.3-billion a year earlier. The result was below expectations of $1.17-billion, according to S&P Capital IQ.
The company, which reported after markets closed Thursday, said its net loss was $133.3-million or $1.82 per share versus a profit of $1.9-million or 2 cents a year earlier. Adjusted earnings were a loss of 21 cents for the quarter versus a profit of 37 cents a year earlier.
The company said its outlook, which doesn’t include the potential impact from tariffs, that it expects results to improve over the fourth quarter.
“Most industry forecasters are currently calling for slightly lower vehicle production volumes in 2025, partly due to the continuation of the OEM vehicle inventory correction in the first quarter, as well as continued softness in EV production volumes,” stated CEO Rob Wildeboer in a release. “Overall, we continue to perform at a high level, and the actions we are taking in 2025 are expected to drive better results in the years ahead.”
The stock is down 12 per cent so far this year as of Thursday’s close and has traded between a high of $12.54 and low of $7.61 over the past 52 weeks.
Read more about the company’s recent comments from the Globe’s Eric Atkins here
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Aecon Group Inc. (ARE-T) shares sank 16 per cent on Thursday after the company’s fourth quarter profit missed expectations and analysts expressed concern about the impact of potential tariffs.
The company was down another 6 per cent midday Friday.
After markets closed on Wednesday, the company reported revenue of $1.25-billion up from $1.13-billion a year earlier. The expectation was for revenue of $1.19-billion, according to S&P Capital IQ.
Profit of $14-million or 21 cents per share compared to $9.7-million or 15 cents a year earlier. Adjusted earnings were 25 cents per share versus 12 cents a year earlier. The expectation was for adjusted earnings of 45 cents in the latest quarter.
National Bank Financial analyst Maxim Sytchev cut his target to $23 from $30 post-earnings and kept his “sector perform” (similar to hold) rating.
“With potential government change [in Canada]/tariffs looming, more, not less disruption of timetables is possible; why take the risk?” he wrote in a March 6 note.
Cannacord Genuity analyst Yuri Lynk saw the post-earnings selloff as a buying opportunity “for risk tolerant investors.”
Mr. Lynk, who has a “buy” on the stock, said in a note that “nothing has changed coming out of the quarter.” He lowered his target to $32 from $33.
The stock is down 31 per cent so far this year as of Thursday’s close. It has traded between a low of $13.03 and a high of $29.63 over the past 52 weeks.
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Savaria Corp. (SIS-T) shares fell 3 per cent on Thursday amid tariff threats that led to lower guidance and despite fourth-quarter earnings that beat expectations.
After markets closed on Wednesday, the company reported fourth-quarter revenue of $223.3-million, in line with expectations and up 3 per cent from $216.8-million a year earlier.
Net earnings of $14.3-million or 20 cents per share compared to earnings of $11-million or 16 cents a year earlier. Adjusted earnings were 26 cents per share up from 19 cents a year earlier and ahead of expectations of 24 cents.
The company cut its 2025 sales guidance to $925-million from $1-billion, according to a note from National Bank Financial analyst Zachary Evershed.
“As Savaria has a material exposure to U.S. tariffs via its multi-national supply chain spanning Canada, China and Mexico, the more conservative outlook does not come as a surprise,” Mr. Evershed wrote in the note that was released before the Trump administration announced it was pausing tariffs for another month until April 2. He has an “outperform” (similar to buy) and $27 target on the stock.
The stock is down 18 per cent so far this year as of Thursday’s close and has traded between a high of $23.92 and low of $15.52 over the past 52 weeks.
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AirBoss of America Corp. (BOS-T) shares fell 4 per cent on Thursday after the Newmarket, Ont.-based company reported fourth quarter earnings below expectations.
After markets closed on Wednesday, the company reported sales of US$92-million for the quarter ended Dec. 31, down from US$92.7-million a year ago. The result was below expectations of US$103.3-million.
Its loss was US$2.6-million or 10 cents US per share compared to a loss of US$35-million or US$1.33 a year earlier. Its adjusted loss was 6 cents US per share compared to 10 cents US a year earlier.
“[Fourth-quarter] results missed Street expectations as rubber volumes remain under pressure,” National Bank Financial analyst Ahmed Abdullah said in a report.
He noted that tariffs remain a threat since about 75 per cent of the company’s sales are in the U.S., “but it remains unclear as to how much of that is shipped out from Canada and would be subjected to tariffs.”
Mr. Adbullah, who wrote the note before the latest tariff delay announced on March 6, said a “prolonged tariff scenario will affect overall auto demand due to macro pressures.” He has “sector perform” (similar to hold) and $5.75 target on the stock.
The stock is down 8 per cent so far this year as of Thursday’s close and has traded between a high of $6.31 and low of $3.65 over the past 52 weeks.
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A&W Food Services of Canada Inc. (AW-T) reported revenue of $93.2-million for the quarter ended Dec. 29, down from $102.9-million for the same quarter a year earlier. The company said the $9.7-million drop was primarily from franchising revenue due to lower equipment sales “which reflects our strategic focus on reducing the cost of modernizations for our franchisees and the adoption of an overall capital light strategy for our franchisees that began in the fall of 2023.
Same-store sales fell 1.9 per cent. Its loss was $1.1-million versus a profit of $9.9-million a year earlier. The company said the net loss in the fourth quarter isn’t comparable to the net income the same quarter a year ago, citing a non-cash, non-recurring deferred tax expense of $16.9-million from a change in the corporate legal entity structure.
The stock is down 7 per cent so far this year as of Thursday’s close and has traded between a high of $41.71 and low of $32.62 over the past 52 weeks.
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Automotive Properties Real Estate Investment Trust (APR-UN-T) reported a profit of $12-million in the fourth quarter versus a loss of $15.2-million a year earlier.
After markets closed on Wednesday, the company reported funds from operations (FFO) were $11.9-million or 24 cents per unit versus $11.9-million or 24 cents a year earlier. Adjust FFO came in at 23 cents, similar to a year earlier.
While the results were in line with expectations, “heightened tariff threats do not bode well for a dealership REIT, and the implications of a drawn out trade war for dealers could be stark,” National Bank Financial analyst Giuliano Thornhill said in a March 6 note. He lowered his price target to $12 from $12.75 post earnings but maintained his “outperform” rating (similar to buy).
“We believe increased prices for autos could lead to cheaper floor financing available on currently held inventory similar to what was witnessed during COVID on lower supply. To account for these risks, we are now setting our target at a greater discount to our NAV estimate,” the analyst wrote.
The REIT has traded between a high of $13.33 and low of $9.98 over the past 52 weeks.
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Badger Infrastructure Solutions Ltd. (BDGI-T) shares rose 5.5 per cent on Thursday, despite the broad market selloff, after the company reported higher year-over-year revenue and profits and increased its dividend.
After markets closed on Wednesday, the company reported revenue of US$187.2-million for the quarter ended Dec. 31, up from US$173.1-million a year earlier. The results were above expectations of US$185.3-million.
Net earnings of US$10.9-million or 32 cents US per share compared to earnings of US$4.7-million or 14 cents a year earlier. Adjusted earnings were 37 cents US per share compared to 16 cents a year earlier.
The company also announced a 4.2-per-cent increase in its quarterly dividend to 18.75 cents per share.
Canaccord Genuity analyst Yuri Lynk reiterated his “buy” and trimmed his target to $52 from $55 post-earnings.
“We continue to view Badger as one of the most compelling organic growth stories in the industrials space as non-destructive hydrovac excavation enjoys broadening adoption,” he wrote. “While 2025 fleet growth guidance was below our expectations, we nevertheless see a path towards another year of 20 per cent adjusted-EPS growth on pricing, branch profitability improvements, and operating leverage.”
The stock is up 15 per cent so far this year as of Thursday’s close and has traded between a high of $51.50 and low of $34.85 over the past 52 weeks.
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Shares of Kits Eyecare Ltd. (KITS-T) rose 7 per cent this week after the Vancouver-based company reported record revenue and swung to a profit in its fourth quarter.
Before markets opened on Wednesday, the glasses and contacts company said its revenue increased by 42 per cent to a record $44.8-million compared to $31.7-million the year before.
“The increase was primarily attributed to increasing recognition of the KITS brand in the North American e-commerce space, strong customer demand, operational efficiencies, and strategic initiatives,” the company stated.
Net income was $2.7-million or 9 cents per share compared to net loss of $491,000 or 2 cents a year earlier. The results were in line with pre-released preliminary revenue.
Ventum Capital Markets analyst Devin Schilling increased his target price to $16 from $15 and kept his “buy” rating on the stock post-earnings.
“We view KITS as being at the forefront of transforming the eyecare industry through innovation and personalized customer experiences,” he wrote in a note.
The stock is up 12 per cent so far this year as of Thursday’s close and has traded between a high of $11.75 and low of $5.39.
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Thinkific Labs Inc. (THNC-T) shares fell 5 per cent on Thursday after the company reported a wider loss for its latest quarter.
After markets closed on Wednesday, the company reported revenue increased 13 per cent year-over-year to US$17.6-million. The expectation was for revenue of US$17.7-million.
Its net loss was US$700,000 compared to net income of US$300,000 a year earlier. The loss amounted to one cent US per share, which was below expectations of a profit of one cent US per share, according to S&P Capital IQ estimates.
The company expects revenue of between US$17.5-million to US$17.8-million for its first quarter, which it said represents 10 to 12 per cent growth compared to the first quarter of 2024.
CIBC analyst Todd Coupland downgraded the stock to “neutral” (similar to hold) from “outperformer” (similar to buy) after the company’s results came in at the lower end of its guidance. He also dropped his target to $3.50 from $5.
“Beyond this report, the company has decided to pivot its strategy,” to focus on higher value customers, Mr. Coupland said in a note. “While we believe Thinkific is an excellent company, in our view, it is too early to pay for this pivot in strategy.
The stock is up 2 per cent so far this year as of Thursday’s close and traded between a high of $4.30 and low of $2.35 over the past 52 weeks.
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KP Tissue Inc. (KPT-T) reported revenue of $539.6-million in the fourth quarter, up 12 per cent from $482.3-million a year earlier and ahead of expectations of $524.2-million.
Its net loss was $13.7-million in Q4 2024 compared to net income of $16.5 million in Q4 2023, a decrease of $30.2 million.
The stock is down 1 per cent so far this year as of Thursday’s close and has traded between a high of $9.05 and low of $7.66 over the past year.
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Pet Valu Holdings Ltd. (PET-T) shares are up nearly 10 per cent this week - as of Thursday’s close - after the company reported earnings that beat expectations.
Before markets opened on Tuesday, the company reported revenue of $295.1-million, up 2.9 per cent from the year-earlier period and ahead of expectations of $292-million, according to S&P Capital IQ.
Net income was $28.9-million, up from $28.8 million a year earlier. Adjusted net income of $32.2-million or 45 cents per share compared to $39.1-million 54 cents a year earlier. The expectation was for earnings to come in at 40 cents per share.
CIBC’s Mark Petrie increased his target on the stock to $33 from $29 with an “outperformer” rating (similar to buy).
“Pet Valu delivered a solid [fourth quarter] amid a difficult environment and modest expectations,” he wrote in a March 4 note.
National Bank analyst Vishal Shreedhar maintained his “outperform” (similar to buy) rating and $30 price target on the stock post-earnings.
“We hold a positive view on PET, reflecting its strong business positioning, historically attractive industry characteristics and high returns on capital,” he wrote, citing the company’s stock ticker, PET. “We recognize that government response to tariffs (and other factors) will influence the consumer backdrop; that said, PET has historically been a defensive business, with [about] 80 per cent of sales in consumables.”
Pet Valu shares are up 4 per cent so far this year as of Thursday’s close and have traded between a high of $32.74 and low of $23.32 over the past 52 weeks.
Upcoming small-cap earnings
March 10: Nexus Industrial REIT (NXR-UN-T), Pollard Banknote Ltd. (PBL-T), Frontera Energy Corp (FEC-T), Enghouse Systems Ltd. (ENGH-T)
March 11: Dorel Industries Inc. (DII-B-T), Transcontinental Inc. (TCL-A-T, TCL-B-T)
March 12: Propel Holdings Inc. (PRL-T), (rescheduled) North American Construction Group Ltd. (NOA-T), Dorel Industries Inc. (DII-B-T), Currency Exchange International, Corp. (CXI-T)
March 13: NFI Group Inc. (NFI-T); Bird Construction Inc. (BDT-T); Ballard Power Systems (BLDP-T), Calfrac Well Services Ltd. (CFW-T), Medical Facilities Corp. (DR-T), Haivision Systems Inc. (HAI-T), Guru Organic Energy Corp. (GURU-T)
March 17: Information Services Corporation (ISC-T)
March 18: Neo Performance Materials Inc. (NEO-T), SNDL Inc. (SNDL-Q)
March 19: Gold Royalty Corp. (GROY-A), Charlotte’s Web Holdings Inc. (CWEB-T), AutoCanada Inc. (ACQ-T)