A look at some small-cap stocks making news - or about to
Canada’s S&P/TSX Small Cap Index TXTW-I is up by about 40 per cent over the past 52 weeks as of Thursday’s close. It hit a record of 1,179.02 on Wednesday. The Russell 2000 in the U.S. is up 10 per cent over the past 52 weeks. It hit a record 2,541.67 on Wednesday.
Small-cap spotlight
A&W Food Services of Canada Inc. (AW-T) reported an increase in same-store sales alongside higher-than-expected revenue and adjusted EBITDA for its third quarter.
Before the market opened on Friday, the company reported a 1.4-per-cent increase in same-store sales for the quarter ended Sept. 7 due to an increase in both average cheque size and guest counts. That compared to a 1-per-cent drop in its same-store sales for the same quarter last year.
“We are pleased to report our third consecutive quarter of positive same-store sales growth, a significant achievement amidst a challenging macroeconomic environment which continues to create headwinds for sales at A&W restaurants,” CEO Susan Senecal stated in a release.
The company said the growth in guest counts is due to “the ongoing success of our marketing campaigns, which we began to see positive impacts from in Q1 2025 and reflects the attractiveness of our value offerings in the current consumer market.”
It said the higher average cheque size is partially due to industry-wide inflation affecting goods, services and labour costs.
Revenue of $71.2-million was down from $76-million a year earlier but slightly surpassed expectations of $71-million.
The company said the year-over-year revenue drop was primarily due to a difference in the timing of restaurant openings. It said there were seven fewer openings in the third quarter of this year versus last year.
“New restaurant openings impact the revenue generated from the sale of equipment and the revenue associated with turnkey restaurants and as such the lower number of openings in Q3 2025 led to a reduction in those streams of revenue, when compared to Q3 2024,” the company stated.
Adjusted EBITDA increased to $25.8-million, up from $24.7-million last year, due to a drop in operating costs. The result beat expectations of $24.7-million for the latest quarter.
Net income of $17.6-million was up from $9-million a year ago.
The company said net income before income taxes increased by $14.6-million to $23.6-million in the quarter versus last year, largely due to the cessation of the royalty expense after an internal transaction in the third quarter last year that saw A&W’s Food Services division acquire units of A&W Revenue Royalties Income Fund that it didn’t already own.
It said food services reported net income per share of 71 cents for the third quarter, compared to 42 cents last year, due to an increase in income attributable to shareholders of Food Services.
The company said the financial results for the third quarter this year aren’t directly comparable to the same quarter last year. To make them more comparable, the company said the number of shares used to calculate the net income per share for the third quarter last year was adjusted. It said the adjustment reflects the equivalent number of common shares of Food Services that were outstanding after the reorganization was done as part of the transaction.
A&W said its outlook for fiscal 2025 is consistent with the ranges announced in May, including adjusted EBITDA between $96-million and $101-million (up from $93.5 million in fiscal 2024) and annual same-store sales growth of 0 to 3 per cent versus a drop of 0.6 per cent in fiscal 2024.
Small-cap summary
Other small caps making news this week
Canaccord Genuity Group Inc. CF-T shares soared in Friday trading after a report that the company has been sounding out potential bidders, including CVC and Advent, for its British wealth arm.
The report from Reuters cited two people with knowledge of the matter.
Canaccord issued a statement early Friday stating that it “routinely evaluates strategic initiatives in consideration of the rights of its strategic and financial minority partner in the UK wealth management business aimed at enhancing value for all stakeholders, including its employees and clients.”
It said the evaluations sometimes “involve discussions with potential counterparties; however, there can be no assurance that such discussions will result in any specific outcome.”
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Interfor Corp. (IFP-T) announced more cuts to its lumber production across its operations in B.C., Ontario, and part of the U.S., citing “persistently weak market conditions and ongoing economic uncertainty.”
Before markets opened on Friday, the company said the curtailments are expected to reduce lumber production in the fourth quarter by approximately 250 million board feet, or 26 per cent, as compared to the second quarter of 2025, “which reflected a more normal operating stance.”
It said the curtailment volumes are approximately evenly split between its Canadian and U.S. operations.
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Flagship Communities REIT (MHC-U-T) announced a 5.4-per-cent increase to its monthly distribution this week to US$0.0545 per unit or US$0.654 per unit on an annualized basis, starting Nov. 17.
“As we mark our fifth anniversary as a public REIT, we’re proud to celebrate another increase in our cash distribution — our fifth consecutive year of growth,” said CEO Kurt Keeney.
“This represents the fifth consecutive annual increase to the distribution and the greatest increase so far, highlighting the REIT’s cash flow growth over the past year, and prospects for continued growth,” Canaccord Genuity analyst Mark Rothschild wrote in a note. He has a “buy” and US$21.15 target on the REIT.
He noted that Flagship’s units currently trade at an implied cap rate of 7.4 per cent and a discount to net asset value (NAV) of 13.1 per cent compared to U.S. peers, which trade at an average implied cap rate of 5.2 per cent and a 10 per cent discount to consensus NAV.
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Reitmans (Canada) Ltd. (RET-X) announced after markets closed on Thursday that chief operating officer Jackie Tardif is leaving the company after 31 years, following the elimination of the role. Ms. Tardif’s last day is Dec. 1.
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Cineplex Inc. CGX-T shares rose on Thursday after the company announced that it has signed a deal to sell its Cineplex Digital Media subsidiary to U.S.-based digital signage company Creative Realities Inc. CREX-Q for $70-million.
As part of the deal, Cineplex has signed a long-term agreement to continue as CDM’s exclusive advertising sales agent for CDM-operated digital-out-of-home networks across Canada.
Cineplex Digital Media provides digital signage for retailers, restaurants, banks and other businesses
Cineplex says proceeds of the sale will be used to strengthen its balance sheet and provide cash for share buybacks, debt reduction and general corporate purposes.
National Bank Financial analyst Adam Shine raised his target to $14.50 from $13 after the news and maintained his “outperform” (buy) rating.
“The sale of CDM was increasingly anticipated as we moved through 2025,” he wrote in a note. “We’re pleased with the transaction and multiple, but this alone didn’t impact our valuation. The 10x multiple for CDM does raise the question if higher multiples might be appropriate for other parts of CGX.”
Canaccord Genuity analyst Aravinda Galappatthige raised his target to $13 from $11 “to reflect both the sale and the strengthening box office outlook.” He maintained his “hold” recommendation, “at this point due to limited upside and, from our standpoint, low visibility around additional asset sale options.”
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Clairvest Group Inc. (CVG-T) announced a deal to buy the operations of MGM Northfield Park from MGM Resorts International (MGM-N) for US$546-million in cash.
“CVG, funds managed by it, and co-investors are expected to invest approximately US$165-million in equity in connection with the transaction,” the company stated in a release on Thursday.
CVG said its direct exposure is expected to represent between 4 and 5 per cent of book value based on current estimates.
It’s Clairvest’s 17th investment in the gaming sector.
Northfield Park has 74,000 square feet of gaming space, including video lottery terminals, a half-mile standardbred (harness) racetrack, food and beverage outlets, and a 1,820-seat entertainment venue principally serving the Cleveland and Akron, Ohio, populations.
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Cannabis stocks surged mid-week amid a fresh round of speculation about U.S. President Donald Trump’s potential plans to relax marijuana’s status under federal law.
Companies such as Canopy Growth Corp. (WEED-T), Tilray Brands Inc. (TLRY-T), Trulieve Cannabis Corp. (TRUL-CN) and Green Thumb Industries Inc. (GTII-CN) saw their stocks halted briefly on Wednesday due to what Canadian regulators described as a “single-stock circuit breaker” event.
Canopy shares rose by as much as 13 per cent on Wednesday before the halt, while Tilray stock was up 15 per cent, Trulieve stock was up 14 per cent, and Green Thumb stock was up 14 per cent. The stock prices have since retreated, as of Thursday’s close.
Analysts say the spike came after Doug Kass of Seabreeze Capital Partners LP posted on the social media platform X that his “trade of the month” was Advisorshares Pure US Cannabis ETF (MSOS-A).
“I have done a lot of leg work on rescheduling over the last several weeks,” he wrote in post shortly after markets opened on Wednesday. “Based on my contacts in Washington, D.C. I believe the rescheduling of cannabis will finally occur over an investable (and maybe/hopefully trading) timeframe. I give rescheduling at least a 80% probability by year-end. I am adding to MSOS more aggressively — with a $5 buy top.“
Trump said in August that he planned to make a decision soon on whether to reclassify marijuana as a Schedule 3 drug. He also recently signalled support for covering CBD oil under Medicare.
Cannabis stocks remain extremely volatile. Stocks such as Canopy Growth, Trulieve and Green Thumb are down over the past 12 months, while Tilray is up about 6 per cent. MSOS is up about 20 per cent over the past month, but down more than 20 per cent over the past 12 months.
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Wajax Corp. (WJX-T) announced this week that its board and CEO Iggy Domagalski have “jointly agreed to initiate a CEO succession process.”
The company said that “as part of this planned transition,” Mr. Domagalski will continue to serve as president and CEO and a director of Wajax until the conclusion of the process, “ensuring continuity and a seamless handover of responsibilities.”
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IsoEnergy Ltd. (ISO-T) announced late Monday that it’s buying Australian-listed Toro Energy Ltd., owner of the Wiluna Uranium Project in Western Australia, in a deal valued at $68.1-million.
Under the terms of the transaction, Toro shareholders will receive 0.036 of a common share of IsoEnergy. The exchange ratio implies consideration of A$0.584 per Toro Share, representing nearly an 80-per-cent premium to the last traded price on the Australian Stock Exchange A$0.325 per share on Oct. 10.
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Galaxy Digital Holdings Ltd. (GLXY-T) announced late Friday a $460-million private strategic investment in its Class A common stock, including about nine million shares from the company and about 3.75 million shares from certain executive officers of Galaxy, including its founder and CEO, at $36 per share. It said the investment is from “one of the world’s largest and most respected asset managers,” but didn’t disclose the name.
Galaxy said it intends to use the proceeds from the investment for general corporate purposes and to power the buildout of its Helios data center campus.
Upcoming small-cap earnings:
Oct. 21: Galaxy Digital Holdings Ltd. (GLXY-T)
Oct. 22: Precision Drilling Corp. (PD-T), Winpak Ltd. (WPK-T)
Oct. 23: Hammond Power Solutions Inc. (HPS-A-T)
Oct. 27: Morguard North American Residential REIT (MRG-UN-T)
Oct. 29: Aecon Group Inc. (ARE-T), Morguard REIT (MRT-UN-T), Allied Properties REIT (AP-UN-T), Primaris REIT (PMN-UN-T), Timbercreek Financial Corp. (TF-T)
Oct. 30: Secure Waste Infrastructure Corp. (SES-T), Black Diamond Group Ltd. (BDI-T), Spin Master Corp. (TOY-T), Coveo Solutions Inc. (CVO-T), Champion Iron Ltd. (CIA-T)
Nov. 3: BTB REIT (BTB-UN-T), Ag Growth International Inc. (AFN-T), Gibson Energy Inc. (GEI-T), CT REIT (CRT-UN-T)
Nov. 4: Minto Apartment Real Estate Investment Trust (MI-UN-T), Parex Resources Inc. (PXT-T), Cargojet Inc. (CJT-T), Propel Holdings Inc. (PRL-T), Information Services Corp. (ISC-T), Andrew Peller Ltd. (ADW-A-T), SNDL Inc. (SNDL-CN), Pet Valu Holdings Ltd. (PET-T)
Nov. 5: Curaleaf Holdings Inc.(CURA-T), BSR REIT (HOM-U-T), Killam Apartment REIT (KMP-UN-T), Canada Packers Inc. (CPKR-T), First Capital REIT (FCR-UN-T), Russel Metals Inc. (RUS-T), Alaris Equity Partners Income Trust (AD-UN-T), Badger Infrastructure Solutions Ltd. (BDGI-T), Trulieve Cannabis Corp. (TRUL-CN)
Nov. 6: Dentalcorp Holdings Ltd. (DNTL-T), Canfor Corp. (CFP-T), Canfor Pulp Products Inc. (CFX-T), Cascades Inc. (CAS-T), Pason Systems Inc. (PSI-T), Interfor Corp. (IFP-T), Enerflex Ltd. (EFX-T), TerrAscend Corp. (TSND-T), Lightspeed Commerce Inc. (LSPD-T), NFI Group Inc. (NFI-T), Slate Grocery REIT (SGR-UN-T), Source Energy Services Ltd. (SHLE-T), Cineplex Inc. (CGX-T), Doman Building Materials Group Ltd. (DBM-T), Kits Eyecare Ltd. (KITS-T), Canada Goose Holdings Inc. (GOOS-T)
Nov. 7: Chorus Aviation Inc. (CHR-T), Boralex Inc. (BLX-T), Exchange Income Corp. (EIF-T)
Nov. 11: Extendicare Inc. (EXE-T), True North Commercial REIT (TNT-UN-T)
Nov. 12: Pollard Banknote Ltd. (PBL-T), Bird Construction Inc. (BDT-T), Thinkific Labs Inc. (THNC-T), North American Construction Group Ltd. (NOA-T)
Nov. 13: Superior Plus Corp. (SPB-T), Total Energy Services Inc. (TOT-T), Profound Medical Corp. (PRN-T), AutoCanada Inc. (ACQ-T), Ballard Power Systems (BLDP-T), KP Tissue Inc. (KPT-T), Corby Spirit and Wine Limited (CSW-A-T), Automotive Properties REIT (APR-UN-T), H&R REIT (HR-UN-T)
Nov. 14: Conifex Timber Inc. (CFF-T), Neo Performance Materials Inc. (NEO-T), Pizza Pizza Royalty Corp. (PZA-T), MDA Space (MDA-T)
Nov. 20: Real Matters Inc. (REAL-T)
Nov. 27: Rogers Sugar Inc. (RSI-T)