A look at some small-cap stocks making news - or about to
Canada’s S&P/TSX Small Cap Index TXTW-I is up 30 per cent over the past 52 weeks as of Thursday’s close. It hit a record high of 1,053.11 on Wednesday. The Russell 2000 in the U.S. reached a record of 2,470.08 on Thursday and is up 12 per cent over the past 52 weeks.
Small-cap spotlight
Investors will be watching how the recent market rebound has impacted the financial performance of asset manager AGF Management Ltd. (AGF-B-T) when it reports its latest earnings next week.
The company is expected to report revenue of $147.1-million and adjusted earnings per share of 44 cents for its third quarter ended Aug. 31, according to S&P Capital IQ. For the same quarter last year, revenue was $137.7-million and adjusted earnings were 37 cents per share.
Earlier this month, AGF reported total assets under management (AUM) and fee-earning assets of $56.8-billion as of Aug. 31, up 14 per cent from the same period a year ago.
BMO Capital Markets analyst Tom MacKinnon increased his target to $15 from $12 ahead of the third-quarter earnings report, reflecting an improving industry outlook and stronger equity markets. He maintained his “market perform” (hold) rating.
He said third-quarter AUM was 4 per cent better than expected and increased his EBITDA and EPS estimates each by 5 per cent, to $46-million and 45 cents, respectively.
“Reflecting this, and incorporating operational leverage, 2026E EPS increases 8 per cent to $1.80 (consensus $1.78). We introduce 2027E operating EPS of $1.90 (consensus $1.87),” he wrote in a Sept. 15 note.
Among the six analysts that cover the stock, there are four buys and two holds. The average target price is $15.
The company’s dividend currently yields about 3.6 per cent. The stock is up 70 per cent over the past year and has traded between a high of $14.42 and a low of $8.17 over that period.
The earnings are expected to be released before markets open on Sept. 24. It will be the first earnings report after the sudden death in early July of AGF’s chief executive officer and chief investment officer Kevin McCreadie. He was 64. The asset manager named president Judy Goldring as the new CEO, effective July 3.
In mid-July, the company appointed Chris Jackson, a member of the company’s executive management team since 2018, as president and chief operating officer. David Stonehouse was appointed interim CIO while a search is underway for a replacement, the company stated.
Small-cap summary
Other small caps making news this week
Algoma Steel Group Inc. (ASTL-T) announced an increase in the size of a recent credit agreement to US$375-million from US$300-million.
It said the extra US$75-million is being provided by Export Development Canada, which joins the company’s existing lending syndicate as a direct lender.
“This transaction is part of a broader set of liquidity initiatives Algoma is pursuing to strengthen its financial position and provide flexibility to navigate evolving market conditions,” the company stated in a release after markets closed on Thursday.
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Aecon Group Inc. (ARE-T) announced after markets closed on Thursday that it has acquired Texas-based Trinity Industrial Services, a privately owned company that does maintenance, capital projects, turnarounds and fabrication for industrial clients, primarily in Texas and Louisiana.
“This transaction provides Aecon with an expanded footprint in one of the most significant industrial hubs in the U.S., enhances relationships with major clients, secures a growth platform in target markets and strengthens recurring revenue,” stated Aecon CEO Jean-Louis Servranck.
The terms of the agreement weren’t disclosed in the release.
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Reitmans (Canada) Ltd. (RET-X) reported flat revenue and lower earnings for its second quarter ended Aug. 1
After markets closed on Thursday, the retailer reported revenue of $215.9-million which was relatively in line with the same quarter last year. It said comparable sales were down 1.3 per cent compared to last year.
“Sales in the second quarter were among the best in the last few years, despite three fewer stores and the closure of Thyme Maternity,” said CEO Andrea Limbardi in a release. “Customers remained price-conscious, and we strategically moved inventory through focused promotions, which impacted year-on-year gross profit.”
Adjusted EBITDA was $21.4-million, down 8.5 per cent from the same quarter last year, “largely due to lower gross margin and unfavourable foreign exchange compared to last year,” the company said.
Net earnings came in at $13.1-million or 26 cents per share compared to $15.7-million or 32 cents a year earlier.
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NanoXplore Inc. (GRA-T) shares rose on Thursday, after falling earlier in the week, after the company announced a “significant supply agreement” with Chevron Phillips Chemical (CPChem) to provide a proprietary carbon product produced at the company’s graphene production facility in Montreal.
NanoXplore will supply the product, called Tribograf, to CPChem under a new long-term agreement, which it described as “an important step in expanding the commercial use of Tribograf and reinforces NanoXplore’s vision to be a leading supplier.”
Earlier in the week, the company reported fourth-quarter earnings and a CEO transition.
NanoXplore reported revenue of $31.7-million for its fourth quarter ended June 30, down from $38.1-million a year earlier. The result was below expectations of $33-million. Its loss of $2.3-million compared to a loss of $2.4-million for the same period last year.
The company also announced that its founder, president and CEO Soroush Nazarpour will step down in December. The stock fell by about 10 per cent earlier in the week after the news. Mr. Nazarpour will stand for re-election at the annual meeting to remain on the board as vice-chairman, the company said. He will be replaced by chief operating officer Rocco Marinaccio, who has been with the company for almost seven years.
Ventum Capital Markets analyst Amr Ezzat, who has a “buy” and $3.50 target, described the succession as “orderly” and noted that the first half of fiscal 2026 “will be turbulent as transport customers cut back,” but added that the second half should improve.
National Bank analyst Baltej Sidhu, who has a “sector perform” (hold) and $2.80 target on the stock, described the company as being at “an inflection point, with the leadership transition designed to build on technical background and enhance operational execution.”
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Pollard Banknote Ltd. (PBL-T) shares closed up 10 per cent on Thursday after the company said the National Lottery of Belgium has communicated its “notice of intent” to award a 12-year contract to the company. The contract has an estimated value of €177 million ($289-million Canadian, using an exchange rate of $1.63 Canadian per Euro).
The formal award of the contract is subject to a mandatory 15-day standstill period pursuant to Belgian procurement law, the company stated in a release before markets opened on Thursday.
“We view the announcement as a big win for the company as it has faced challenges in the very competitive iLottery market,” Acumen Capital analyst Jim Byrne said in a note. He has a “buy” and $32 target on the stock. “Along with Kansas, the company now has two stand-alone iLottery contracts and we believe they will contribute nicely to EBITDA and free cash flow in the coming years.
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Sangoma Technologies Corp. (STC-T) stock dropped on Thursday after the company reported a weaker-than-expected outlook for its next fiscal year, despite beating expectations for its fourth-quarter earnings.
After markets closed on Wednesday, the business communications platform provider reported revenue of US$59.4-million for its fourth quarter ended June 30, compared to US$60.9-million for the same quarter last year. The expectation was for revenue of US$58.6-million.
Net income of US$209,000 or 1 cent US per share compared to a loss of US$1.7-million or 5 cents US for the same quarter last year. Adjusted EBITDA of US$11.4 million was up from US$11.1-million a year ago and beat expectations of US$10.7-million.
For fiscal 2026, Sangoma is expecting revenue to be in the range of US$200-million to US$210-million, compared to $209-million in fiscal 2025. The analyst expectation was for US$215.6-million, according to S&P Capital IQ.
Acumen Capital analyst Jim Byrne kept his “buy” rating but lowered his target to $12 from $12.50 to reflect slightly lower estimates.
“The anticipated growth in FY26 will now begin in fiscal Q2 and beyond as the company’s go-to-market strategy has encountered some longer sales cycles and implementations for their larger MRR [monthly recurring revenue] projects,” he wrote in a note.
Canaccord Genuity analyst Robert Young lowered his target to US$8.50 from US$10, noting that the company’s guidance for fiscal 2026 was weaker than his model.
“That said, management remains bullish and re-emphasized the end of a long transformation phase and the beginning of a multi-prong growth strategy underpinned by a strengthened balance sheet,” he wrote in a note. He has a “speculative buy” on the stock.
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Canopy Growth Corp. (WEED-T) announced on Wednesday that Tom Stewart has been appointed chief financial officer, effective immediately. Mr. Stewart has served as interim CFO since July and has been a member of the company’s senior finance leadership team since 2019.
“Mr. Stewart’s appointment supports the continued execution of Canopy Growth’s fiscal year 2026 strategy, which is marked by structural efficiency, operational and commercial focus, and disciplined capital allocation and cost management,” the company stated in a release.
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Russel Metals Inc. (RUS-T) announced cost-cutting measures this week in its Western Canadian operations that it says will “rationalize excess capacity/redundant locations, reduce invested capital and gain operational efficiencies.”
Some of the changes include selling real estate associated with its branches in Delta, B.C. and Saskatoon and the permanent closure of the Delta location.
The company said it will record a provision for restructuring relating to the permanent closure of the Delta location of approximately $4-million.
National Bank analyst Maxim Sytchev reiterated his “outperform” (buy) rating and $55 price target after the announcement this week.
“Bottom line – further working capital release underscores outstanding operational execution and intelligent capital allocation strategy," he wrote in a note. “Significant opportunities to free up working capital and rationalize/improve operations were a key part of our bullish stance on the Samuel MSC acquisition ... and we are pleased to see management has achieved the upper end of its targeted reductions while continuing to improve the operational efficiency of the Samuel legacy assets.”
Mr. Sytchev says he remains “bullish on the Russel story given continued M&A optionality (leverage at only 0.3x our 2025E EBITDA), supportive metals prices ... margin-accretive capex initiatives and attractive valuation.”
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Goeasy Ltd. (GSY-T) announced this week that its chief financial officer Hal Khouri will be leaving the company after its third-quarter reporting in November to pursue a new opportunity outside of Canada. He joined the company in 2019.
The company said it’s searching for a replacement and has made “significant progress” toward identifying an interim CFO.
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Enerflex Ltd. (EFX-T) announced this week the appointment of Paul Mahoney as its president and CEO, effective Sept. 29. He will also be on the board.
Interim CEO Preet Dhindsa will remain as senior vice-president and chief financial officer. Joe Ladouceur, who served as interim CFO, will remain as vice-president treasury, tax and insurance.
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Savaria Corp. (SIS-T) increased its monthly dividend to 4.67 cents per common share, which on an annual basis is an increase of two cents or 3.7 per cent to 56 cents. This increase will apply to the dividends payable monthly starting on Oct.8 to shareholders of record on Sept. 29.
“This dividend increase reflects our confidence in delivering profitability in the coming years, while maintaining ample balance sheet flexibility to pay down our debt and invest in growth opportunities as they arise,” stated executive chairman Marcel Bourassa in a release.
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High Tide Inc. (HITI-X) shares rose this week after the company reported third-quarter earnings that beat expectations.
After markets closed on Monday, the Calgary-based cannabis company reported revenue of $149.7-million for the three months ended July 31, compared to $131.7-million during the same period last year. The company said it was a record and represented the fastest growth rate in seven quarters. The result beat expectations of $147.9-million.
Net income of $832,000 or a penny per share, compared to $825,000 or a penny per share last year. The expectation was for a loss of one cent.
Ventum Capital markets analyst Andrew Semple increased his target to $9 from $8.50 and kept his “buy” rating.
“High Tide remains our highest conviction idea in Canadian cannabis,” he wrote in a note. "It is one of the few cannabis companies in Canada to sustainably grow EBITDA, generate sustainable positive FCF, and maintain clear growth drivers ahead. We note the potential for additional upside to our forecast as High Tide could potentially utilize its growing cash position to support accelerated growth and make acquisitions that would be accretive to its current valuation."
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Sylogist Ltd. (SYZ-T) said this week that its board has formed a special committee of three independent directors to consider the requisition by shareholder OneMove Capital Ltd. for a shareholder meeting to nominate three directors.
The company said it had previously engaged with OneMove in June and August and that the shareholder sent a letter to the company on Sept. 2 requesting a board seat and a response by Sept. 8.
The company said it responded on Sept. 8, “reiterating” that its priority is its upcoming board strategy meetings and that it expected to provide a response to the request in late September or early October, giving it time to “consider the issues raised comprehensively,” it stated in a release.
“It is unfortunate that OneMove has chosen to escalate rather than engage in constructive dialogue with the company in a reasonable timeframe,” the company stated.
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Telesat Corp. (TSAT-T) shares soared this week after the company announced it had completed the distribution of 62 per cent of the equity of its Telesat Lightspeed business to an indirect subsidiary of Telesat Corp.
Telesat said there are no changes to its operations as a result of the transaction.
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DavidsTea Inc. (DTEA-X) shares sank this week after the company reported a wider loss in its second quarter and relatively flat sales versus the same period last year.
Before markets opened on Tuesday, the company reported sales of $11.1-million, up 0.5 per cent from the prior-year quarter. Its adjusted net loss amounted to $1.8-million or 6 cents per share in the second quarter compared to an adjusted net loss of $1-million or 4 cents a year ago.
The stock is down 34 per cent since the earnings release, as of Thursday’s close. It has no analyst coverage, according to S&P Capital IQ.
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Upcoming small-cap earnings:
Sept. 24: AGF Management Ltd. (AGF-B-T)
Sept. 25: Vecima Networks Inc. (VCM-T)
Oct. 1: Novagold Resources Inc. (NG-T)
Oct. 29: Aecon Group Inc. (ARE-T)
Oct. 30: Secure Waste Infrastructure Corp. (SES-T)
Nov. 6: Dentalcorp Holdings Ltd. (DNTL-T)
Nov. 14: Conifex Timber Inc. (CFF-T)