Strong performances from its fitness clubs and mortgage brokerage businesses are good signs for Founders Advantage Capital (Founders Advantage Capital Stock Quote, Chart, News TSXV:FCF), according to Noel Atkinson, analyst for Clarus Securities. In a quarterly update to clients on Tuesday, Atkinson maintained his \u201cSpeculative Buy\u201d rating and raised his target price from $2.00 to $2.75 per share, which at press time represented a projected 12-month return of 116.5 per cent. Calgary-headquartered Founders Advantage is an investment company with majority stakes in three product and services companies in Canada. Its largest single contributor by EBITDA is Dominion Lending Centres, one of Canada\u2019s largest mortgage brokerage companies, in which Founders purchased a 60 per cent ownership in June 2016 for $88.1 million. Also in 2016, FA Capital bought a 60-per-cent stake in fitness chain Club16 for $22.0 million, while in 2017 it purchased a 52-per-cent stake in handheld radio accessories business Impact for $12.0 million. In September 2019, FA Capital sold its 50 per cent stake in printing company Astley Gilbert for $17.0 million. FA Capital announced its second quarter 2020 results on Monday for the period ended June 30, with combined revenues of $15.0 million and attributable adjusted EBITDA of $2.8 million. Those numbers compared to $23.6 million and $5.2 million, respectively, from a year earlier. For the Q2, DLC generated funded mortgage volumes of $10.5 billion and EBITDA of $5.7 million, up 12 and 47 per cent, respectively, compared to a year ago. On Club16, management said its focus is now on safely reopening existing locations as of June 1 and starting up two new sites in BC, expected to open mid-September. \u201cThe reopening process has been successful to date and Club16 has experienced net new member growth for its existing clubs,\u201d said James Bell, president and CEO, in a press release. \u201cFurther, Impact continues to generate positive free cash flow and is focused on penetrating new markets. Overall, we are very pleased with how well our investee partners are performing.\u201d The quarterly numbers were above Atkinson\u2019s estimates, with the $15.0-million top line beating his $12.2-million forecast and the $2.8-million in adjusted EBITDA beating his $1.2-million estimate. In his report, the analyst said DLC\u2019s cloud-based mortgage brokerage platform, Newton Velocity, continues to see higher uptake rates and could be a hidden jewel for FA Capital. \u201cWhile they are not yet disclosing the size and scale of Newton, management believes it could become a substantial revenue contributor over the next few years and enhance broker retention,\u201d Atkinson. Overall, Atkinson has raised his target multiple for FA Capital from 7x to 9x on the strength of the DLC business and some incremental value for the Newton Velocity platform. For 2020, the analyst is now calling for revenue of $82.6 million (previously $68.1 million) and attributable adjusted EBITDA of $16.9 million (previously $11.2 million). \u201cWe are raising our 2020-2021 estimates again as DLC and CLUB16 are performing well above our prior expectations. Our forecast does still reflect some conservatism about CLUB16 over the next few quarters, given that federal public health officials continue to warn of another COVID outbreak across Canada this fall and winter \u2013 which could slow membership growth or force CLUB16 to temporarily close their gyms again,\u201d Atkinson wrote.