Haywood analyst Pardeep Sangha today published his top picks for the first quarter of 2017. The analyst says two companies share the honour: Espial Group (TSX:ESP) and AcuityAds (TSXV:AT).
Sangha thinks AcuityAds still has upside despite a strong recent performance.
“Acuity is showing strong revenue and EBITDA growth, but remains undervalued,” says the analyst. “The company completed its acquisition of 140 Proof and recently raised $4.6M in an equity which positions Acuity for more acquisitions. Furthermore, we are expecting Acuity Ads to report record results for Q4 in March.”
Sangha thinks AcuityAds will generate EBITDA of $1.6-million on revenue of $33.6-million in fiscal 2016. He expects these numbers will improve to EBTDA of $2.8-million on a topline of $50.9-million the following year.
Sangha has a “Buy” rating and a one-year price target of $3.50 on AcuityAds.
Espial had a more up and down year in 2016, but Sangha thinks 2017 will be better, owing in part ot a pipeline of opportunities it has been developing.
“Espial is on the verge of launching with Tele Columbus in Germany which is a much awaited catalyst for the company,” he notes. “Espial has a strong pipeline of opportunities which could close in the first half of 2017. We believe Espial is significantly undervalued, and the market is not recognizing any value for its recent WHS acquisition.”
Sangha thinks Espial will post EBITDA of negative $6.9-million on revenue of $24.1-million in fiscal 2016. He expects these numbers will improve to EBITDA of $0.2-million on a topline of $41.8-million the following year.
Sangha has a “Buy” rating and a one-year price target of $3.75 on Espial Group.