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Tough market? Analysts say buy these Canadian stocks

TGH stock

After a seven month streak that saw the S&P 500 rise 21 per cent, it has been a brutal August, with a 5% drop.

Is this a shocker? Not really.

“This month’s weak showing probably doesn’t come as a surprise, explained Business Insider’s Phil Rosen recently. “History tells us that August has been the second-worst month of the year for stocks going back more than three decades, according to data from Stock Trader’s Almanac, and it’s particularly bad in the year before a presidential election.”

So in preparation for autumn, what are you looking at? You might want to consider these two Canadian stocks because analysts are bullish on them right now.

Tornado Global Hydrovacs

The company’s second quarter is in the books and Beacon Securities analyst Russell Stanley is still liking Tornado Global Hydrovacs (Tornado Global Hydrovacs Stock Quote, Chart, News, Analysts, Financials TSXV:TGH)

On August 17, TGH reported its Q2, 2023 results. The company reported EBITDA of $2.01-million on revenue of $23.5-million, a topline that was up 76 per cent over the same period last year.

In a research update to clients, Stanley broke down the quarter.

“TGH reported Q2 revenue/adjusted EBITDA of $23.5M/$2.0M v. our forecast of $21.2M/$1.9M. Revenue was 11% above forecast, which contemplated a flat Q2 after a stronger-than-expected Q1,” the analyst said. “Revenue improved 75% y/y and 12% q/q. Hydrovac Sales improved 84% y/y and 12% q/q to $21.9M, with Parts & Services contributing $1.6M in revenue, in line with Q1 levels. Gross margins were 83 bps below our forecast, but still improved 49 bps q/q. Margins continue to be negatively impacted by increased material/labour/freight cost inflation, but the company is benefiting from sourcing parts more globally. The gross margin improvement drove adjusted EBITDA margin growth of 68 bps q/q. The company continues to generate positive operating cash flow before (OCF of $1.5M) and after working capital (CFO of $0.5M), and with nominal CAPEX requirements, this translated to positive free cash flow of $0.3M.”

In the August 18 report, Stanley maintained his “Buy” rating and one-year price target of 89 per cent at the time of publication.

Wishpond Technologies

Following the company’s most recent quarterly numbers, Eight Capital analyst Christian Sgro remains bullish on Wishpond Technologies (Wishpond Technologies Stock Quote, Chart, News, Analysts, Financials TSXV:WISH).

On August 17, Wishpond reported its Q2, 2023 results. The company posted EBITDA of $215,926 on revenue of $5.64-million, a topline that was up 13 per cent over the same period last year.

Sgro says it appears to be onward and upward for WISH, although the revenue number did miss consensus, which was $5.9-million.

“Wishpond reported growth behind the Street, resetting this year’s outlook below 30% y/y and checking back our estimates,” he said. “Management remained upbeat on the market opportunity, refocusing the sales strategy around an evolving suite of AI and martech tools that drive ROI for clients. Cash flow performance met our expectations, with Wishpond balancing growth investment with break-even profitability. We continue to model an acceleration in organic growth in the seasonally stronger back half of the year.”

In a research update to clients August 18, Sgro maintained his “Buy” rating and one-year price target of $1.30 on Wishpond.

Disclosure: Wishpond is an annual sponsor of Cantech Letter

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About The Author /

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.
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