The S&P/TSX SmallCap Index declined 1.99 per cent in September, once again outperforming the S&P/TSX Composite Index, which fell 2.85 per cent.
Weakness was widespread with only 68 stocks in the index, or 29 per cent of the members, delivering positive price returns.
A notable standout was strength in the industrials sector. Last month, there were four sectors in the SmallCap Index that realized positive price returns: industrials, consumer staples, technology and health care with gains of 10.75 per cent, 1.63 per cent, 0.78 per cent and 0.59 per cent, respectively.
Analysts’ forecast returns, recommendations and yields for all stocks in the S&P/TSX Composite Index
The largest sector detractors were materials, energy, communication services and financials with negative returns of 5.06 per cent, 4.73 per cent, 4.55 per cent and 4.09 per cent, respectively.
The top 10 performers in September were:
- Eupraxia Pharmaceuticals Inc. (EPRX-T), up 45 per cent
- Vista Gold Corp. (VGZ-T), up 27 per cent
- Tecsys Inc. (TCS-T), up 27 per cent
- Aecon Group Inc. (ARE-T), up 25 per cent
- Firan Technology Group Corp. (FTG-T), up 23 per cent
- Russel Metals Inc. (RUS-T), up 23 per cent
- Wajax Corp. (WJX-T), up 22 per cent
- Bird Construction Inc. (BDT-T), up 21 per cent
- Mattr Corp. (MATR-T), up 20 per cent
- Dexterra Group Inc. (DXT-T), up 20 per cent.
Stocks with large positive revisions to their average target prices over the past month include:
- Troilus Mining Corp. (TLG-T), increased 21 per cent to $4.58 from $3.79
- Jaguar Mining Inc. (JAG-T), increased 19 per cent to $15.50 from $13
- Orezone Gold Corp. (ORE-T), increased 18 per cent to $4.81 from $4.08
In the first nine months of the year, the S&P/TSX SmallCap Index rallied 19.36 per cent, compared to an 11.11 per cent return for the S&P/TSX Composite Index.
Now, here’s a look at analysts’ current target prices, recommendations, forecast returns and yields for all securities in the S&P/TSX SmallCap Composite Index grouped by sector and ranked according to their expected price returns (excluding dividend and distribution income). The posted target price for each security is an average of all available target prices from analysts.
A target price typically reflects an expected share or unit price 12 months from now based on an analyst’s financial modelling, such as a discounted cash flow or sum-of-the-parts model. For the yield provided, Bloomberg calculates this figure by annualizing the most recent announced dividend or distribution value.
It’s important to note that high target prices, which imply stellar returns that seem unbelievable may be just that - unrealistic. At times, when a stock price falls analysts may maintain their bullish expectations, inflating the forecast return.
In addition, an outlier (extreme target price) can skew the average target price, to the upside or downside, particularly when the number of analysts covering a stock is low. Don’t let a huge projected gain lure you into a position – it is critical to look at the company and industry fundamentals.