A look at some small-cap stocks making news - or about to
Canada’s S&P/TSX Small Cap Index (TXTW-I) hit a record 1,261.67 in early Friday trading and is up by about 50 per cent over the past 52 weeks. The Russell 2000 in the U.S. hit a record 2,634.22 in early Friday trading and is up about 16 per cent over the past 52 weeks.
Small-cap spotlight:
Blackline Safety Corp. (BLN-T) investors will be looking for another strong quarter of revenue growth when the Calgary-based company reports its latest financial results next week.
Blackline, which provides technology-driven worker safety monitoring products and services, is expected to report revenue of $41.5-million for its fourth quarter ended Oct. 31, according to S&P Capital IQ consensus estimates, up from $35.7-million a year earlier.
Adjusted EBITDA is expected to be $1.5-million compared to $2-million a year earlier.
Blackline manufactures and sells industrial wearable safety technologies such as personal and area gas monitoring devices, cloud-based device management software, and data analytics for workplace safety and productivity applications. Its clients are in sectors such as energy, public works, utilities and industrial manufacturing.
Investors will also be looking for updates on the company’s business wins when it reports on Jan. 15, including a recently struck multi-year agreement with giant energy producer Abu Dhabi National Oil Company (ADNOC). In August, Blackline said ADNOC placed its first purchase order under a multi-year agreement for up to 28,000 Blackline devices plus services. In September, the company announced a $1.8-million contract with a major North American water and wastewater utility provider that includes 560 devices that includes self-monitoring services.
Ventum Capital Markets analyst Amr Ezzat, who has a “buy” rating and $8.75 target on the stock, described Blackline as “the undisputed industry leader in true connected safety solutions.”
In an Jan. 8 earning preview note, Mr. Ezzat said his expectation is for revenue of $40.9-million and adjusted EBTIDA of $1.6-million for the fourth quarter.
He noted that the company’s third quarter delivered “steady execution,” with results matching his revenue and EBITDA forecasts.
“While hardware remained soft, service revenues grew 27 per cent year over year, highlighting the resilience of the recurring model,” he wrote, adding that gross margins hit a new record at 64 per cent, and adjusted EBITDA was positive for the fifth straight quarter.
He also noted that annual recurring revenue crossed the $80-million mark in the third quarter.
“Recent software upgrades and the ADNOC win support a growing Tier-1 pipeline, while margin expansion and operating leverage continue to trend in the right direction despite a still-cautious macro backdrop,” he wrote.
He also noted that the company has reinvested about 25 per cent of its sales into product development since 2014, which has led to its “differentiated product line and a three- to five-year technological lead over competitors.”
Still, he wrote that investors “often pigeonhole this trailblazer as merely a hardware provider to the Canadian energy sector. This narrow view overlooks a much richer narrative.” About 75 per cent of the company’s business is outside Canada and only 39 per cent is tied to oil and gas, the analyst noted, calling it “a far cry from the company’s beginnings.”
Blackline shares have been roughly flat over the past year, ranging between a high of $7.97 in June and a low of $5.98 in August. The average price target among seven analysts who cover the stock is $9.29.
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Small-cap summary
Ag Growth International Inc. (AFN-T) shares soared on Friday after the company reported its delayed third-quarter results that beat expectations and an update on its Brazil operations that one analyst described as a “pretty big relative win.”
After markets closed on Thursday, the Winnipeg-based bulk commodity storage, transport and processing company reported revenue of $389-million for the quarter ended Sept. 30, up 9 per cent from $357.2-million for the same time last year. The result was ahead of the consensus estimate of $353.4-million, according to S&P Capital IQ.
Adjusted profit of $27.1-million or $1.31 per share compared to $26.3-million or $1.26 a year earlier. The result was ahead of expectations of $1.02 per share.
Adjusted EBITDA of $71-million was up from $68.5-million last year and ahead of expectations of $64.4-million.
“Our third quarter results reflect both the realities of our markets and the strength of our strategy,” said CEO Paul Householder in a release. “Our focus on product transfers, emerging markets, and growth platforms across our international regions has enabled us to deliver a solid third quarter amid varied regional market conditions.”
In November, the company announced a delay of its third-quarter earnings and withdrew its previously issued adjusted EBITDA guidance for fiscal 2025, saying it needed more time to finalize the accounting treatment of its operations in Brazil.
In its third-quarter results, the company said its audit committee did an independent review of its financial reporting and internal controls for its Brazil operations and found “certain deficiencies” in the financial reporting processes and internal controls.
“These findings of deficiencies were determined to constitute a material weakness in our internal control over financial reporting, which we are actively addressing and for which we have initiated remediation measures,” the company stated, adding that there were no material concerns.
In its outlook, the company said expectations for fourth-quarter adjusted EBITDA are lower, citing “challenging market conditions, negative mix, and notably higher SG&A [selling, general and administrative expenses] costs relative to prior year.”
The company said visibility into early 2026 for its farm segment “remains limited due to challenging market conditions which are expected to persist.”
National Bank analyst Maxim Sytchev said the results “qualify as a solid beat, though the bigger news is a lack of further ‘bad news’ around the Q3/25 filing delay that contributed significantly to AFN’s -54% share price collapse last year."
Added Mr Sytchev in a note: “While Q4/25E is expected to be soft on higher costs and challenging market conditions (EBITDA expected to be down y/y and sequentially, suggesting full-year 2025E EBITDA closer to the $220 mln range vs. consensus at $227 mln). Nevertheless, yesterday’s print should act as a material ‘clearing event’ for frustrated shareholders.”
He added: “Bottom line – amid ratings suspension and questions around delisting, this is a pretty big relative win. The stock was taken for dead, amid some sell-side suspending coverage and us fielding questions from investors regarding TSX delisting rules. The quarter was not exactly stellar but relative to what had transpired (i.e. stock collapsing -40% on ~ 15% BZ exposure), financial process deficiencies in Brazil is a dramatically different outcome vs. irregularities, corruption and / or the ENTIRE Commercial business being contaminated.”
He has an “outperform” and $37 target on the stock.
Commented ATB analyst Tim Monachello before markets opened this morning: “Despite a weakening outlook for Q4/25 results, we expect a strongly positive market reaction given that financial reporting delays were not related to any material malfeasance, and did not produce any restatements; for context, AFN shares traded 27% lower since delaying its Q3/25 results.”
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Algoma Steel Group Inc. (ASTL-T) has provided fourth-quarter guidance, including a wider earnings loss and lower shipments.
The company said total steel shipments for the quarter ended Dec. 31 are expected to be in the range of 375,000 to 380,000 tons, down from 419,173 tons reported in the third quarter and 548,802 tons in the fourth quarter of 2024.
Adjusted EBITDA is expected to be in the range of negative $95-million to negative $105-million, versus the expectation of negative $92.5-million. Its adjusted EBITDA loss in the third quarter was $87.1-million and a loss of $60.3-million in the fourth quarter of 2024.
In a release, CEO Rajat Marwah said the fourth-quarter results were in line with expectations, “reflecting the continued impact of steel tariffs and the previously announced wind-down of our blast furnace operations, which are expected to conclude in the coming days.”
He said the company’s first unit of its Electric Arc Furnace (EAF) project is now operating 6 days per week and that the second unit is on schedule.
“As we move toward completing our transition to EAF steelmaking during the current quarter, we continue to optimize our existing assets and advance discussions with potential partners to expand our finishing capabilities,” he stated in a release. “This strategy is deliberately aligned with Canada’s national interest—strengthening domestic steelmaking capacity, supporting critical infrastructure and defence supply chains, and reinforcing Canada’s long-term industrial competitiveness.”
Stifel analyst Ian Gillies retained his “buy” rating and $11.50 target price for what he described in a note as a “high risk/high reward stock.”
Added Mr. Gillies: “We still like the risk/reward on ASTL but it requires some intrepidity.”
He said the company “continues to have sufficient liquidity to make it through 2027E, which then brings into question as to why own the equity given negative EBITDA forecasts in 2026E and 2027E. We believe that significant upside exists in the stock upon sanctioning of the beam mill. If executed, we believe ASTL could generate EBITDA of $346 mm in 2029E, even if 50% tariffs are in place. Under this guise, the stock is trading at 5.2x EV/EBITDA. The second material catalyst, albeit unknown, could be a reduction in Section 232 tariffs.”
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Chemtrade Logistics Income Fund (CHE-UN-T) announced an increase to its monthly distributions and updated guidance.
After markets closed on Thursday, Chemtrade said it’s projecting record adjusted EBITDA in fiscal 2025, surpassing 2023 when it generated adjusted EBITDA of $502.6-million. It also said it expects 2026 adjusted EBITDA to range between $485-million and $525-million.
“The midpoint of 2026 guidance is similar to the 2025 projected adjusted EBITDA and emphasizes the significant step-change in Chemtrade’s adjusted EBITDA and cash flow generation in the last five years,” the company stated.
Chemtrade also said it plans to invest between $35-million and $55-million in growth capital expenditures, with a focus on water treatment chemicals projects.
The trust also said it’s increasing its monthly distribution to 6 cents from 5.75 cents. It said the distribution represents a payout ratio of 45 per cent based on the mid-point of its 2026 guidance. Chemtrade said it will also continue to do unit buybacks.
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Tilray Brands Inc. (TLRY-T) reported an uptick in revenue and trimmed its losses in its second fiscal quarter ended Nov. 30.
After markets closed on Thursday, the cannabis company reported revenue of US$217.5-million for the quarter, ahead of expectations of US$211.2-million and up from US$211-million for the same quarter last year.
Its net loss improved to US$43.5-million or 41 cents US per share compared to a net loss of US$85.3-million or 99 cents US a year earlier. The expectation was for a loss of 14 cents US per share, according to S&P Capital IQ consensus estimates.
Its adjusted loss was US$2-million or 2 cents US per share compared to US$2.2-million or 3 cents US a year ago.
Adjusted EBITDA was US$8.4 million in the second quarter compared to US$9-million a year earlier.
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MDA Space Ltd. (MDA-T) shares closed up nearly 7 per cent on Thursday after the company said it signed a deal with the U.S. Missile Defense Agency for the Scalable Homeland Innovative Enterprise Layered Defense (SHIELD) program.
“This contract award positions MDA Space to bid on future tasks and services that support the expansive US defence initiative, which covers a broad range of work to strengthen defence against threats from land, sea, air, cyberspace, and space,” the company stated in a release before markets opened on Thursday.
The U.S. Missile Defense Agency works on ballistic missile defence systems for the United States and its allies. U.S. President Donald Trump has announced plans for a “Golden Dome” missile defence program to protect the United States.
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Kits Eyecare Ltd. (KITS-T) shares rose this week after the Vancouver-based company reported preliminary fourth-quarter results that beat expectations.
The company said revenue for the quarter ended Dec. 31 was up 20 per cent year over year to approximately $53.9-million.
Canaccord Genuity analyst Luke Hannan said the preliminary number exceeded his estimate of $52.6-million and consensus of $52.9-million and was at the high end of management’s $52-million to 54-million guidance range.
“The adjusted EBITDA margin range of 4.0-5.0% is below the 4.0-6.0% guidance coming into the quarter, but roughly in line with our 5.0% estimate and slightly below consensus’ 5.4% forecast,” he wrote.
“We attribute the lower EBITDA margin to higher new customer acquisitions as well as holiday period promotions, though note that no margin drivers were described in the press release.”
Mr. Hannan also noted that during the 2025 Black Friday/Cyber Monday period, marketing spend accounted for 14.3 per cent of sales, higher than his full-quarter estimate of 13 per cent, although within the company’s 13-to-15 per cent guidance.
“All told, preliminary Q4/25 results demonstrate to us that KITS continues to drive robust, profitable growth, a function of its value proposition featuring high-quality glasses at attractive prices and showing up at customers’ doors within a day or two,” wrote Mr. Hannan, who has a “buy” and $23 target on the stock. “We believe KITS remains well-positioned to deliver growth in the year ahead.”
The company said it plans to report final results in early March.
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Zedcor Inc. (ZDC-X) shares were volatile this week; first falling amid concerns about Amazon’s entrance into the mobility security trailer market, but then rising after the company provided an operational update.
Calgary-based Zedcor, which provides mobile surveillance and live monitoring solutions, fell earlier this week after Amazon’s Ring business unit debuted a surveillance trailer at CES, starting at US$4,999, significantly less than Zedcor’s MobileyeZ manufacturing cost of US$20,000, noted Sitfel analyst Ian Gillies in a note.
“We believe Zedcor’s unit is more robust, explaining at least US$8,000 of the US$15,000 cost difference,” he wrote in a Jan. 6 note. “Amazon’s entrance will fuel the ZDC competitive moat concerns, but there remains a large untapped market that can likely handle multiple players with different service tiers. Moreover, there is some nuance to be considered on product offerings and end markets being pursued, which should insulate ZDC from AMZN’s entrance to some degree.”
The company then provided an update after markets closed on Wednesday, which Mr. Gilles said in a note on Jan. 7 should allay some investor fears about the company’s near-term growth.
“Our discussions with management suggested that mobility security surveillance is a fast-growing market that will have room for multiple service offerings (e.g. high-end (Zedcor), mid-level and budget, which does make sense, in our view),” he wrote.
He has a “buy” and $.25 target on the stock
National Bank Financial analyst Richard Tse, who has an “outperform” and $7.50 target on the stock, said the corporate update “reinforces Zedcor’s continued momentum going into 2026.”
He pointed to the 398 towers deployed in the U.S. in the fourth quarter, up from 307 in the third quarter and up from 152 in the fourth quarter of last year.
“In our view, the above-noted expansion investments signal a commensurately growing pipeline of prospects,” he wrote.
He also said that Amazon’s product looks similar to Zedcor’s and other competing offerings but “it’s important to note what’s differentiated Zedcor in a market that already includes a number of competitors is Zedcor’s full-service, end-to-end offering,” and that its “aggressive sales motion has allowed Zedcor to grow meaningfully despite existing incumbents; as such, we don’t see any near-term material impact from the Amazon launch to Zedcor’s current growth path.”
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Gold Reserve Ltd. (GRZ-X) shares are up about 140 per cent this week after the company said it’s looking to regain control of its assets in Venezuela following the country’s recent regime change.
“The situation on the ground in Venezuela remains dynamic and, as a result, we cannot give any guidance at this time to our shareholders on when, or if, we will be able to return to our Venezuelan properties,” the company stated in a release.
Still, Gold Reserve stated it has “the means and the fortitude to return to Venezuela and we stand ready to do our part to work with all legitimate parties to assist with post-Maduro transition and recovery efforts to foster peace and prosperity.”
The company operated two gold and copper deposits before they were seized by Venezuela’s government.
“Gold Reserve has a long-standing history in Venezuela, developing the largest gold and copper deposits in South America, only to have its Brisas development illegally expropriated by the Chavez regime and its Siembra Minera joint venture illegally expropriated by the Maduro regime,” the company stated. “These Venezuelan gold projects are currently being illegally mined using Chinese technology under the direction of the Cartel de los Soles (a designated narco-terrorist organization) for the financial benefit of the Maduro regime.”
In an interview with Bloomberg News, company vice-chair Paul Rivett said he fielded numerous calls from mining companies last weekend expressing interest in the deposits.
“We will be doing some form of a transaction, whether it involves an investment into us or a partnership,” he said in a Monday interview with Bloomberg.
On Friday, the company said in a release that it’s reviewing and updating its security plans to support “eventual negotiations for a safe return to operations in Venezuela, when conditions permit.”
Separately, the company said it agreed to pay about $5-million in commitment fees to banks tied to the loan facility it used to bid for shares of PDV Holdings, as part of its efforts to recover assets in Venezuela.
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Minto Apartment REIT (MI-UN-T) announced this week that it’s going private in a deal valued at $2.3-billion, including debt.
Minto is being taken private for $18 per unit by Crestpoint Real Estate Investments LP, which will own 50.1 per cent of the company. Crestpoint is a division of Connor, Clark & Lunn Financial Group Ltd. Minto Group, controlled by the founding Greenberg family, will own 49.9 per cent.
Read the full Globe story here
Read what analysts had to say in Tuesday’s analyst upgrades and downgrades here
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Goodfood Market Corp. (FOOD-T) shares fell earlier this week amid the Canadian Food Inspection Agency’s (CFIA) suspension of the Montreal-based meal kit and grocery delivery company’s licence. The CFIA said it suspended the licence on Dec. 30 and reinstated it on Jan. 8. The CFIA said there was no recall associated with the suspension.
In a note to customers on Jan. 6, Goodfood president Neil Cuggy said the CFIA recently changed the classification of its operating licence at its Montreal facility and temporarily suspended it there while it addressed updates to meet new requirements.
“While we are disappointed by the decision, we respect the CFIA’s role and are working closely with them to make the necessary changes immediately,” he said. “What’s most important for you to know is this: Our products remain safe, and food quality has always been, and continues to be, a top priority at Goodfood.”
In a follow-up note to customers on Jan. 8, Mr. Nuggy said the Montreal facility is again fully operational and service resumed nationally, including in the Maritimes.
“We want to reinforce that this temporary suspension was administrative in nature, only and not related to food quality or safety,” he wrote.
Goodfood shares are down 27 per cent over the past year, as of Thursday’s close.
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Colabor Group Inc. (GCL-T) announced on Thursday that it has filed for an initial order to seek protection from its creditors under the Companies’ Creditors Arrangement Act (CCAA). Trading of its shares was also halted.
It said the order includes certain of its subsidiaries, Transport Paul-Émile Dubé Ltée, Le Groupe Resto-Achats Inc. and Norref Fisheries Quebec Inc.
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Upcoming small-cap earnings:
Jan. 14: Blue Ant Media Corp. (BAMI-T), Corus Entertainment Inc. (CJR-B-T)
Jan. 15: Blackline Safety Corp. (BLN-T)
Jan. 27: AGF Management Ltd. (AGF-B-T)
Jan. 29: Real Matters Inc. (REAL-T), Coveo Solutions Inc. (CVO-T), High Tide Inc. HITI-X,
Feb. 10: Morguard North American Residential REIT (MRG-UN-T)
Feb 11: Killam Apartment REIT (KMP-UN-T), Primaris REIT (PMN-UN-T)
Feb. 17: CT REIT (CRT-UN-T),
Feb. 26: Pason Systems Inc. (PSI-T)
March 5: Aecon Group Inc. (ARE-T)
March 6: Nexus Industrial REIT (NXR-UN-T)