Solium Capital will be impacted by oil and gas slide, says Laurentian

Depressed activity in the oil and gas sector is a factor that will lower trading activity and weigh on Solium Capital’s (TSX:SUM) first quarter results, says Laurentian Bank Securities analyst Nick Agostino.

Today after market, Solium Capital will report its Q1, 2015 results.

Agostino says Solium’s first quarter is historically strong, but this one will be impacted by depressed trading activity that won’t be rescued by what the analyst expects will be a more than 4% lift from foreign exchange. He notes that the oil and gas sector represents less than 50% of Solium’s Canadian sector exposure, and Canada accounts for about 40% of the Calgary-based company’s overall sales.

Agostino says he will be looking for three things from the results and conference call, which will follow at 2:30 PM EST.

“1) trading activity commentary for Q1 and outlook for 2015, and participant trading rates relative to historical seasonal levels, 2) any insight on recent TD Ameritrade channel agreement, including pricing details particularly with respect to trading revenues, and 3) new wins, growth prospects and RFP activity in Europe/Australia.”

In a research update to clients Friday, Agostino maintained his “Buy” rating and one year target of $8.50 on Solium Capital, implying a return of 22.3% at the time of publication.

Agostino expects Solium will generate EBITDA of $4.4-million on revenue of $22.1-million in the first quarter of 2015.