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Beat the market with these three Canadian stocks

Picking winners is never easy, but the help of a few expert opinions can make the task all that much smoother. Here, Cantech presents three stocks with either “Buy” or “Speculative Buy” ratings from analysts.

First up is digital healthcare name CloudMD (CloudMD Stock Quote, Charts, News, Analysts, Financials TSXV:DOC), which has a network of medical clinics, an electronic medical records (EMR) business and medical practice management software. 

Echelon Capital Markets analyst Rob Goff recently reiterated a “Speculative Buy” rating on the company after reviewing its first quarter 2023 financials. Goff is expecting more focused and efficient operations from CloudMD this year with free cash flow expected to turn positive in 2024.

“We are encouraged to see Q422 and now Q123 results support baseline organic revenue growth of ~ten per cent with expanding gross margins, as annually recurring revenues (ARR) take on a larger share of the mix and where efficiency measures support our forecast of modest positive EBITDA in Q423,” Goff wrote in a May 30 report.

Goff is forecasting full 2023 revenue and adjusted EBITDA of $111.7 million and negative $3.1 million, respectively, and 2024 revenue and EBITDA of $126.6 million and positive $2.6 million, respectively. 

With his “Speculative Buy,” Goff also maintained a target price of $0.40 per share, which at the time of his report’s publication represented a one-year projected return of 122 per cent.

Next we have Canadian overnight freight business Cargojet (Cargojet Stock Quote, Charts, News, Analysts, Financials TSX:CJT), which flew high in the earlier days of the pandemic but has seen its stock cut in half over the past two years with, among other factors, slower growth in the e-commerce space having its effect on business.

But Beacon Securities analyst Ahmad Shaath likes the name, saying investors can benefit from owning CJT if and when consumer spending picks back up.

“Looking ahead, we expect Domestic Network growth to be muted this year as consumer spending trends continue to be a headwind. With this backdrop, the narrative around CJT story for FY23E is now all about cost cutting and network optimization, thus we expect multiple expansion potential to be contingent on the company’s success in those initiatives. Surprises to the upside would come if consumer spending picks up later this year,” said Shaath in a May 1 report.

After reviewing Cargojet’s first quarter results, Shaath revised his forecast for Cargojet and is now calling for full 2023 and 2024 revenue of $973.0 million and $1,002.0 million, respectively, and EBITDA for 2023 and 2024 at $328.0 million and $359.0 million, respectively.

Last is Canadian cannabis company BZAM (BZAM Ltd Stock Quote, Charts, News, Analysts, Financials CSE:BZAM), which Clarus Securities analyst Noel Atkinson says is seeing good customer demand for its products and holds the #6 position in terms of market share in the Canadian industry.

Atkinson said management is looking to hit positive adjusted EBITDA and free cash flow this year and the analyst is forecasting 2023 net revenue of $102.7 million and adjusted EBITDA of $0.8 million. 

Atkinson maintained a “Speculative Buy” rating on BZAM and $0.65 per share target price, which at the time of publication represented a one-year return of 100 per cent.

“Our target price equates to 1.5x 2024e EV/sales – in line with the peer group’s average 2024e EV/sales multiple and very reasonable for a legal CPG company with meaningful expected organic growth over the next couple of years and rising Adj. EBITDA margins as well,” Atkinson wrote in a June 1 report. 


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