Globe & Mail Article
Thu, 27 Oct 2016 9:16 EDT
It is a quiet day on the economic front in Canada with no major releases. In the U.S., key economic reports released today are durable goods, jobless claims, and pending home sales.
In terms of earnings releases, there are 12 companies in the S&P/TSX composite index that are reporting third-quarter financial results today among the earnings parade are Teck Resources, Potash, Husky Energy, MEG Energy, Cenovus Energy, First Quantum Minerals, Eldorado Gold, and Yamana Gold.
To recap, on Wednesday, the S&P/TSX composite index lost 63 points, or 0.42 per cent to close at 14,808. There were 81 securities in the TSX Index that advanced, 162 securities declined in value, and four stocks closed the day unchanged.
The S&P/TSX composite index is up 0.55 per cent month to date, and up 13.82 per cent year to date.
On today's TSX Breakouts report, there are 18 securities on the positive breakouts list (stocks with positive price momentum) and 28 stocks on the negative breakouts list (stocks with negative price momentum).
Discussed today is a stock that is just below the screening criteria with a market capitalization of $193-million (below the $200-million threshold). While it is below the TSX Breakouts report radar, it is on analysts' radars with coverage from eight firms - all of whom have 'buy' recommendations. The stock I am referring to is TIO Networks Corp.(TNC-X).
A brief outline is provided below that may serve as a springboard for further fundamental research.
The company
TIO provides technology used to process bill payment transactions. The company's fiscal year end is July 31.
Before the market opened on June 28, the company reported third quarter fiscal 2016 financial results. Revenue was $17.97-milion, up from $13.57-milion during the same period last year, and beating the consensus estimate of $16.65-million. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was $2.88-million, up from $1.35-million in the previous year, and ahead of the Street's forecast of $1.81-million. The share price rallied 5 per cent to $2.12 from $2.02.
According to Bloomberg, for the past four quarters, the share price has rallied materially the day it reported its financial results, increasing between 4 per cent and 14 per cent. The stock can have volatile moves given its low liquidity. Its two-month historical daily average trading volume is approximately 91,000 shares.
The company is anticipated to report its fourth-quarter fiscal 2016 and fiscal year-end results in November. For the fourth quarter, the Street is forecasting revenue of $27.16-million, EBITDA of $3.05-million, and earnings per share (EPS) of 2.5 cents.
On Oct. 18, the company announced it completed the first phase of the integration of its recent acquisition of Softgate Systems Inc., an acquisition completed in April. Management is forecasting the company will realized at least $6-million of synergies, expressed in U.S. dollars.
AI
