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 1,309.06 on Wednesday and is up by about 60 per cent over the past 52 weeks. The Russell 2000 in the U.S. hit a record 2,653.31 on Wednesday and is up about 19 per cent over the past 52 weeks.
Small-cap summary
Ag Growth International Inc. (AFN-T) announced early Thursday that its president and CEO Paul Householder has immediately stepped down for personal reasons and resigned from the board. The leadership change has prompted at least one analyst to speculate that the company could be a takeover target.
The company said that Paul Brisebois, its senior vice-president of North America Farm and Global Portables, has been named interim president and CEO while a search for a replacement is underway.
“To ensure a seamless transition of responsibilities and continuity, Mr. Householder has agreed to remain available to provide transition services to the company,” the company stated in a release.
National Bank Financial analyst Maxim Sytchev mused in a note today that the company could be put on the block.
“Amid rebuffing several takeover attempts in 2024 and now a process being run in relation to Kepler Weber (see link here), one naturally has to wonder if a potential suitor would once again take a run at AFN now that investors are somewhat calmer in relation to accounting issues that still need to be remedied (but the worst case scenario was averted,“ he wrote. ”If there was time to act, we are not sure that one could present a better entry point – no CEO, materially reduced valuation vs. May 2024 offer and, thematically, food storage is now gaining the post-Cold War rage, again."
Added Mr. Sytchev: “In our view, the new clearing price in case of a sale could be in the mid-$40s to account for cyclical pressures and decline in profitability vs. the May 2024 time frame.”
He has an “outperform” (buy) on the stock and $39 price target.
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Blackline Safety Corp. (BLN-T) shares slipped in early Thursday trading after the company reported mixed results for its fourth quarter ended Oct. 31
Before markets opened on Thursday, the technology-driven worker safety monitoring products and services company reported revenue of $39.3-million, up 10 per cent from a year earlier, which it said was primarily driven by an increase in service revenue.
The result was below expectations of $41.5-million, according to S&P Capital IQ consensus estimates.
Its net loss was $620,000 or a penny per share, which was in line with expectations and compared with a loss of $68-million or nil a year earlier.
Adjusted EBITDA was $2.2-million, ahead of expectations of $1.5-million and compared to $2-million a year earlier.
“BLN continues to face a challenging demand environment with the U.S. government shutdown further hurting order flow in Q4, which helped drive the revenue miss this quarter,” TD analyst David Kwan, who has a “hold” and $8 price target on the stock, wrote in a note. “However, it continues to do well on the cost optimization front, as margins continue to trend upward.”
Added Mr. Kwan: “We think the continued growth headwinds could continue to limit near-term upside to the stock.”
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Velan Inc. (VLN-T) shares sank in early Thursday trading after its largest shareholder, Velan Holding Co., announced plans to sell its entire holdings to Birch Hill Equity Partners.
After markets closed on Wednesday, the industrial valve maker said Birch Hill is buying 72.1 per cent of Velan’s shares and 92.8 per cent of its voting rights for $13.10 per share.
“Birch Hill intends to maintain the company’s significant presence in Quebec including the Montreal head office, ensuring that Velan remains active in the local industrial sector while benefiting from the resources and capital necessary for its next phase of growth across Canada and internationally,” Velan stated in a release.
Birch Hill will also have the right to appoint up to four of seven nominees to the board if it maintains more than 40-per-cent ownership of the voting rights.
Velan also said the transaction only relates to Velan Holding’s stake. “No other shareholders of the company will be parties to the contemplated transaction, and no buyback, sale, or acquisition of shares held by shareholders other than Velan Holding or its associated entities is expected [as part of the transaction],” it stated.
Velan also reported results for its third quarter ended Nov. 30, including sales of US$71.7-million, down from US$73.4-million last year.
Net income of US$3-million or 14 cents US per share compared to a net loss of US$47.8-million or US$2.22 per share, last year.
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Cogeco Inc. (CCA-T) shares rose in early Thursday trading after the company reported a drop in revenue but higher adjusted profit for its first quarter ended Nov. 30 that also beat expectations.
After markets closed on Wednesday, Cogeco said its revenue was $735.6-million, down 3.8 per cent compared to $765-million for the same quarter last year. The expectation was for revenue of $737-million, according to S&P Capital IQ.
Adjusted EBITDA fell 2.5 per cent year over year to $361.8-million.Adjusted profit was $28.9-million or $3 per share, ahead of expectations of $2.63 and compared to $27.2-million or $2.82 per share last year.
Meanwhile, Cogeco Communications Inc. (CCA-T) reported revenue of $707.2-million, down from $738.7-million a year earlier and below expectations of $714.1-million.
Adjusted profit of $89.5-million or $2.11 per share was down from $90.7-million oor $2.14 a year ago. Still, the result beat expectations of $2.05 per share.
“Our consolidated financial results for the quarter were in line with our expectations,” said CEO Frédéric Perron. “In the U.S., we’ve materially improved our subscriber trends for a second consecutive quarter, just as we said we would. This has translated into our best U.S. subscriber metrics in the past 15 quarters and we are just getting started, as we continue to deploy new sales and marketing strategies and invest in even faster network speeds.”
Canaccord Genuity analyst Aravinda Galappatthige, who has a “buy” rating on Cogeco Communications stock with a price target of $75, described the results as “generally in line,” with quarterly revenue results impacted by ongoing weakness in U.S. cable, offset by a strong performance in Canada.
“However, we have seen improving US broadband sub trends point to a potential recovery through the remainder of the year,” he wrote.
He also said consolidated EBITDA was ahead of expectations, “driven by solid cost reduction execution in Canada.
“While the U.S. financials did not improve from Q4 levels, the sub trends, as well as other rationalization and revenue-oriented initiatives, suggest a meaningful recovery through rest of the year,” he wrote.
TD analyst Vince Valentini, who has a “buy” and $95 target on Cogeco Communications stock, said in a note that bearish investors “will point to worse-than-expected revenue and EBITDA growth in the U.S. segment (HSD declines), but a meaningful beat on U.S. sub losses should instill confidence that those financial trends should improve soon.”
He also noted that consolidated financials beat and there was no change in 2026 guidance.“Solid Canadian segment financials cannot be ignored, especially with a prospective FCF yield near 20%,” he wrote. “This company remains structurally undervalued in our view, especially when we consider $14+ per share in hidden spectrum value, and our previously published analysis that the struggling U.S. division accounts for only 13% of our target equity value.”
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Cineplex Inc. (CGX-T) shares fell on Wednesday after the company reported higher box office sales in December compared to the same month a year ago, but lower sales for the fourth quarter year over year.
Fourth-quarter box office sales amounted to $140.7-million, down 5 per cent over the same period last year.
“This compared to previous consensus expectations of 17.1 per cent growth and our own prior forecast of 7.6 per cent growth,” Canaccord Genuity Aravinda Galappatthige wrote in a note. “However, with the slow start to quarter in October and November, and the latest edition of Avatar underperforming domestic box office expectations by approximately $100M (for the first 4 weeks), we saw a meaningful variance.”
As a result, the analyst said he expects a “more moderated” fourth quarter result with adjusted EBITDA of $51.3-million versus consensus of $64.7-million.”
The analyst said the fourth-quarter results could result in 2026 expectations being “tapered down a bit, with consensus calling for high single-digit box office growth in the current year.”
He maintained his “hold” rating and reduced his target by $1.50 to $11.50 “as we roll forward to 2027E and more moderate box office expectations.”
National Bank analyst Adam Shine lowered his fiscal 2025 forecast following the latest box-office results.
“While movie exhibition didn’t face any big shocks following prior impacts from COVID and the writers/actors strikes, 2025 got off to a slow start with a particularly weak March and also faced y/y declines in August, October, and November,” he wrote.
Mr. Shine maintained his “outperform” (buy) rating and trimmed his target by 50 cents to $14.
Cineplex is expected to report its fourth-quarter results on Feb. 11.
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Blue Ant Media Corp. (BAMI-T) shares were down in early trading on Thursday, following Wednesday’s decline, after the company said it swung to a loss in its first quarter compared to the same period a year earlier.
Before markets opened on Wednesday, the company reported a loss of $6.8-million or 31 cents per share for its first quarter ended Nov. 30, compared to a profit of $1.2-million or 6 cents in the prior-year period.
It said the loss in the most recent quarter includes a $3.1-million non-cash accounting loss and $3.4-million of transaction and restructuring costs associated with its reverse takeover transaction before going public and its Magellan and Thunderbird acquisitions.
Blue Ant’s revenue came in at $80.5-million compared with $48.7-million for the same quarter last year. The increase was driven by strong performance in its studio business and contributions from recent acquisitions.
“Our Q1 results were in line with expectations and reflected the scale we have been building through disciplined execution of our growth strategy,” CEO Michael MacMillan stated in a release.
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Corus Entertainment Inc. (CJR-B-T) reported revenue of $267.6-million, down 18 per cent from $327.2-million a year earlier. The result was below expectations of $268.9-million, according to S&P Capital IQ estimates.
Its net loss attributable to shareholders of $11.1-million or 6 cents per share compared to a profit of $11.9-million or 6 cents per share a year ago.
“Our first quarter results were in line with our expectations, with persistent market headwinds and industry conditions continuing to impact both advertising and subscriber revenue,” said CEO John Gossling.
He said the company has made progress related to the proposed recapitalization transaction first announced in November, which will be put to a security-holder vote on Jan. 30.
The restructuring will involve exchanging $500-million in senior unsecured notes for equity in a new parent company, NewCo, that will own Corus. The note holders will own 99 per cent of the new company’s shares.
All existing Corus shares will be exchanged for shares in the new company collectively worth 1 per cent of the total equity. The plan, under the Canada Business Corporations Act, was supported by holders of nearly three-quarters of its total $750-million in senior unsecured notes.
All lenders under the senior credit facility and the Shaw Family Living Trust, which indirectly holds more than 80 per cent of class A voting shares, have also entered into agreements with the company to support the restructuring.
National Bank Financial analyst Adam Shine maintained his “underperform” (sell) recommendation and 1-cent target price.
“Projected values in NAV were negative but turn to breakeven with recapitalization, which we hoped would involve greater debt reduction,” he wrote in a note.
“While we include 100x more shares for now, we should expect a share consolidation of perhaps at least 1-for-100 to create a share price above zero. Given evolving drop in profits in our forecast, we’d need to justify a multiple above 5x for TV to have a positive fiscal 2027 estimated NAV under a 1-for-100 share consolidation.”
Added Mr. Shine: “As we await the completion of the recapitalization, our target reflects a notional value of $0.01/share ahead of any share consolidation, possible valuation changes and regulatory relief not currently anticipated.”
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Canaccord Genuity Group Inc. (CF-T) announced that it has acquired Carbon Reduction Capital, which provides M&A, project finance, and capital-raising services in the U.S. across the renewable energy sector.
Financial terms weren’t disclosed.
The acquisition “accelerates our sustainability ambitions by leveraging deep sector expertise and unlocking new opportunities to increase our market share in the U.S. and globally,” said CEO Jeff Barlow in a release.
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Total Energy Services Inc. (TOT-T) rose earlier this week after the company announced a 20-per-cent increase to its quarterly dividend and preliminary capital budget for 2026.
Before markets opened on Tuesday, the Calgary-based company said it expects its 2026 capital expenditure budget to be $55.8-million, financed with cash on hand and cash flow from operations.
It also said that about $24.5-million of 2025 capital expenditure commitments will carry into 2026.
It said the dividend will rise to 12 cents per share from 10 cents beginning for the quarter ended March 31.
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Maple Leaf Foods Inc. (MFI-T) stock rose this week after the company said it expects a mid-single-digit increase in revenue in fiscal 2026 compared to the year before and announced a 10-per-cent increase in its quarterly dividend.
Before markets opened on Tuesday, the company said its adjusted EBITDA is expected to be between $520-million and $540-million, driven by revenue growth and margin improvement from different initiatives. The company also plans to spend about $160-million to $180-million on maintenance, productivity improvements and automation.
Maple Leaf is raising its quarterly dividend to 21 cents per share from 19 cents.
Canaccord Genuity analyst Luke Hannan increased his target to $37 from $36 and reiterated his “buy” recommendation after the news.
“We derive our target price using a sum-of-the-parts methodology, based on 10.6x (unchanged) our 2026 EBITDA estimate of $533-million (from $524-million previously) and MFI’s 16-per-cent ownership stake in CPKR,” he wrote. (CPKR is the ticker symbol for Canada Packers Inc, which Maple Leaf spun out of its business last year.
“Following the spin-out of its pork processing business, we believe Maple Leaf should exhibit a higher degree of top-line and margin resilience on a go-forward basis, which should garner a higher multiple from investors,” Mr. Hannan wrote. “In our view, Maple Leaf offers long-term investors an attractive growth profile at a reasonable valuation given the company’s robust brand portfolio and category dominance in prepared meats.
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Kraken Robotics Inc. (PNG-X) shares rose earlier this week after the company announced $35-million in battery sales to three unnamed customers.
Its SeaPower batteries enable long-endurance subsea operations on unmanned underwater vehicles (UUVs).
“We’re pleased to see increasing momentum on our SeaPower battery sales and look forward to continued strong growth with our current UUV customers and to integrating on several new platforms throughout 2026,” CEO Greg Reid stated in a release before markets opened on Tuesday.
“With manufacturing capacity coming online in North America in addition to our European operations, we are well-positioned to supply power systems to the rapidly growing UUV segment, across platforms from extra-large to small (XLUUV to SUUV).”
Canaccord Genuity analyst Doug Taylor raised his target to $9 from $6 “to reflect the market enthusiasm for defence-centric names” but maintained a “hold” recommendation.
He said the new sales extend “a streak of recent success for the battery division, as it continues to ride the wave of emerging international defence initiatives to modernize sovereign naval capabilities amid growing geopolitical conflict.”
Added Mr. Taylor: “This strong thematic has continued to propel Kraken’s already sporty valuation even further – the company now trades at ~56x 2026E EBITDA. We expect the company to continue delivering strong top-line growth, powered by battery supply and demand expansion and the conversion of the sonar systems pipeline. However, the high valuation balances our view."
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SunOpta Inc. (SOY-T) shares soared earlier this week after the company raised its fiscal 2025 outlook.
Its 2025 revenue outlook increased to $816-million to $818-million from $812-million to $816-million previously. Its adjusted EBITDA outlook rose to $94-million to $95-million from $90-million to $92-million previously. It said the updated outlook expects revenue growth of approximately 13 per cent and adjusted EBITDA growth of 6 to 7 per cent compared to fiscal 2024.
“While we had a challenging October, we delivered results above expectations in November and December, driving fourth-quarter profitability that is significantly better than what we anticipated two months ago,” CEO Brian Kocher stated in a release. “This progress certainly reinforces our confidence in the previously provided outlook for 2026.”
The company said it would update its 2026 outlook when it releases its fourth‑quarter and fiscal 2025 results in March.
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Upcoming small-cap earnings:
Jan. 20: Goodfood Market Corp. (FOOD-T)
Jan. 26: Cannara Biotech Inc. (LOVE-X)
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, Champion Iron Ltd. (CIA-T)
Feb. 5: Rogers Sugar Inc. (RSI-T), Canada Goose Holdings Inc. (GOOS-T)
Feb. 10: Morguard North American Residential REIT (MRG-UN-T), Stingray Group Inc. (RAY-A-B)
Feb 11: Killam Apartment REIT (KMP-UN-T), Primaris REIT (PMN-UN-T), First Capital REIT (FCR-UN-T), Cineplex Inc. (CGX-T), Slate Grocery REIT (SGR-UN-T)
Feb. 12: Interfor Corp. (IFP-T), Mullen Group Ltd. (MTL-T)
Feb. 13: Chorus Aviation Inc. (CHR-T), Interfor Corp. (IFP-T)
Feb. 17: CT REIT (CRT-UN-T),
Feb. 18: Gibson Energy Inc. (GEI-T)
Feb. 19: Sienna Senior Living Inc. (SIA-T)
Feb. 24: Cargojet Inc. (CJT-T)
Feb. 26: Pason Systems Inc. (PSI-T), Enerflex Ltd. (EFX-T)
March 5: Aecon Group Inc. (ARE-T)
March 6: Nexus Industrial REIT (NXR-UN-T)
-with files from Irene Galea and The Canadian Press