The Canadian small caps on our list have seen their EPS fall significantly over the past three years
SmallCapPower | July 6, 2017: Seeing earnings per share (EPS) decline is a bad sign for any investor. It either means the company’s operations are deteriorating or they have issued more shares, meaning each investor gets less profits. Either way, it is earnings that moves stock prices, and seeing earnings decline significantly over the past three years is troublesome. If earnings continue to decrease the stock prices will likely follow, so investors tend to avoid stocks like these unless they have reason to believe the trends will be reversed. Today we have identified five Canadian small caps whose EPS has each declined over 50% during the past three years.
First Majestic Silver Corp (TSX: FR) – $10.10
Non-Gold Precious Metals & Minerals
First Majestic Silver Corp. is a mining company focused on silver production in Mexico and it is pursuing the development of its existing mineral property assets. The Company operates through eight segments, six of which are located in Mexico; one retail market segment in Canada, and one metal trading segment in Europe. Its segments in Mexico are Santa Elena, La Encantada, La Parrilla, Del Toro, San Martin and La Guitarra. Its segment in Canada is Coins and Bullion Sales, and the segment in Europe is Silver Sales. The Company owns and operates approximately six producing silver mines: the La Encantada Silver Mine, La Parrilla Silver Mine, Del Toro Silver Mine, San Martin Silver Mine, La Guitarra Silver Mine and Santa Elena Silver Mine.
- Market Cap: $1,652,121,086
- 3 Year % Change in EPS: -61.5%
- EPS (LTM): $0.15
Enerflex Ltd. (TSX: EFX) – $18.87
Oil Related Services and Equipment
Enerflex Ltd. is a Canada-based supplier of natural gas compression, oil and gas processing, refrigeration systems and electric power equipment. The Company’s in‐house resources provide the capability to engineer, design, manufacture, construct, commission and service hydrocarbon handling systems. The Company operates through three segments: Canada, USA and Rest of World. The Canada segment is engaged in manufacturing (primarily compression equipment), service and rentals. The USA segment is engaged in the manufacture of natural gas compression equipment and process equipment. It also offers product support services and rentals.
- Market Cap: $1,670,568,610
- 3 Year % Change in EPS: -60.3%
- EPS (LTM): $0.23
Liquor Stores NA Ltd. (TSX: LIQ) – $9.89
Food Retail & Distribution
Liquor Stores NA Ltd is a Canada-based operator of retail liquor stores that operates over 180 stores in Alberta, over 30 stores in British Columbia, over 20 stores in Alaska and over 10 stores in Kentucky. The Company’s Liquor Stores primarily operate under the brand names Liquor Depot, Liquor Barn, and Wine and Beyond in Alberta; Liquor Depot, Liquor Barn and Wine Cellar in British Columbia; Brown Jug in Alaska, and Liquor Barn, The Ultimate Party Source and Liquor Barn Express in Kentucky.
- Market Cap: $274,414,794
- 3 Year % Change in EPS: -57.7%
- EPS (LTM): $0.30
Quarterhill Inc. (TSX: QTRH) – $1.85
Investment Holding Companies
Quarterhill Inc, formerly Wi-LAN Inc, is a Canada-based investment holding company focused on growing its business by acquiring technology companies in the Industrial Internet of Things (IIoT) across multiple verticals. The Company targets companies with a broad range of products and services that capture, analyze and interpret data, and that have financial performance, management teams, intellectual property underpinnings and opportunities to develop long-term recurring and growing revenue streams.
- Market Cap: $218,177,828
- 3 Year % Change in EPS: -57.2%
- EPS (LTM): $0.13
Mullen Group Ltd. (TSX: MTL) – $16.04
Oil Related Services and Equipment
Mullen Group Ltd. is a supplier of trucking and logistics services in Canada. The Company operates through its Business Units, which are divided into two operating segments: Trucking/Logistics and Oilfield Services. The Trucking/Logistics segment consists of over 10 Business Units, offering a range of truckload and less-than-truckload (LTL) general freight services to customers in Canada and the United States. These services include transporting goods, including general freight; commodities, such as cable, pipe and steel; over-dimensional loads, such as heavy equipment and compressors, and dry bulk commodities, such as cement and frac sand. The Oilfield Services segment consists of over 10 Business Units that provide transportation services, drilling, well-servicing and dewatering services to the oil and natural gas industry.
- Market Cap: $1,662,615,229
- 3 Year % Change in EPS: -70.1%
- EPS (LTM): $0.44
Disclosure: Neither the author nor any of the principals at Small Cap Power, or their family members, own shares in any of the companies mentioned above.
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