Two Canadian stocks analysts love right now

The stock market is not supposed to be entertainment, but for most investors lately things have been downright boring.

That will likely continue for a little while longer, says at least one analyst.

Paradigm Capital analyst Aazan Habib, in a recent report to clients, said equity indices are following the seasonal script closely right now, signalling weakness until at least mid-October.

The S&P 500 is testing the August lows and 4300 support zone as tactical momentum indicators enter oversold territory,” the analyst argued in research update to clients September 24. “While an oversold bounce/relief rally seems probable from these levels, the seasonal composite suggests the corrective phase has room to run into mid-October. The daily chart is forming a head & shoulders distribution pattern that measures downside to the 4050-4100 zone, an area that contains the upward sloping 200-day moving average. We could see a scenario where the index bounces to fill the gap between 4374 and 4400 before continuing lower to this downside target.”

What to do in the meantime? At Cantech Letter we gather research from scores of analysts so you can find the best opportunities. Here are two stocks analysts love right now.

DCBO stock

After attending the company’s annual user conference, National Bank Financials analyst Richard Tse has maintained his “Buy” rating on Toronto-based Docebo (DCBO Stock Quote, Chart, News, Analysts, Financials NASDAQ:DCBO).

Tse says he came away impressed from the event.

“We had the opportunity to attend Docebo Inspire, the Company’s annual user conference early this week,” the analyst noted. “The well-attended event of 600 provided an opportunity to speak with customers, prospects and partners while demo-ing various software modules with an opportunity to hear about the Company’s upcoming product roadmap in addition to a dedicated session for investors and analysts. While we already liked this name going into this event, what we learned on the ground (actually) elevated our view that Docebo is one of the highest quality small/mid-cap companies in our technology coverage universe. As we see it, in a market (Learning Management) that’s likely one of the most competitive in enterprise software, Docebo has managed to rise above many of its peers care of Management’s ability to innovate and execute with an eye on driving operating leverage from a disciplined approach to capital allocation. Bottom line, the conference reinforced our thesis on why DCBO remains one of our Top Picks”

In a research update to clients September 21, Tse maintained his “Outperform” rating and one-year price target of (US) $50.00 on DCBO.

NPI stock

Following news from its Baltic offshore wind project in Poland, Industrial Alliance analyst Naji Baydoun has raised his price target on Northland Power (Northland Power Stock Quote, Chart, News, Analysts, Financials TSX:NPI).

On September 19, Northland Power announced that its Baltic Power offshore wind project had signed a credit agreement to secure $5.2-billion in financing.

“Overall, we view this update as a net positive (1) with execution on key offshore wind projects de-risking the growth outlook, and (2) by providing improved visibility on strong project returns,” the analyst said. “We expect NPI to provide similar updates on its large-scale offshore wind project in Hai Long in Taiwan before year-end, providing investors with greater clarity on final project costs and returns/economics. We also anticipate further updates on capital recycling initiatives shortly, providing incremental capital for growth and surfacing value for shareholders. In the meantime, the shares remain attractively valued from both an absolute and relative basis.”

In a research update to clients September 20, Baydoun maintained his “Buy” rating and raised his price target on NPI from $38.00 to $39.00, implying a return of 67.8 per cent at the time of publication.