5 Small Cap Stocks Selling Off Despite Robust Earnings Growth

Earnings growth represents a company’s ability to grow its revenue base and profitability. And by doing so for three consecutive years, it is a strong indication of management’s success and performance. Unfortunately, Canadian stock markets have been quick to sell off holdings over the past year in light of poor economic conditions, but is the sell-off warranted for the stocks on our list today?

WestJet Airlines Ltd. (TSX: WJA) – $22.59

Airlines

WestJet Airlines Ltd. is a Canada-based company engaged in the provision of airline service and travel packages. The Company offers scheduled service to approximately 93 destinations in North America, Central America, the Caribbean and Europe.

  • Market Cap: $2,821,601,216
  • YTD Price Change: -31.4%
  • P/E (LTM): 7.1x
  • Earnings CAGR (2011-2014): 24.1%

Enbridge Income Fund Holdings Inc. (TSX: ENF) – $30.50

Oil & Gas Transportation Services

Enbridge Income Fund Holdings Inc., through its investment in Enbridge Income Fund, holds energy infrastructure assets. The Company’s business is limited to ownership of its interest in Enbridge Income Fund (the Fund). The Fund’s objective is to pay out a high proportion of available cash in the form of dividends to shareholders.

  • Market Cap: $2,826,324,503
  • YTD Price Change: -23.7%
  • P/E (LTM): 22.5x
  • Earnings CAGR (2011-2014): 35.8%

Related: Hottest Stocks in Canada? Here’s 5 Big Small Cap Momentum Movers >>

COGECO Inc. (TSX: CGO) – $57.99

Broadcasting

COGECO Inc. is a diversified holding corporation. The Company, through its subsidiaries, operates in two segments: Cable and other. The Cable segment provides a range of Analogue and Digital Television, HSI and Telephony services primarily to residential customers. It also provides business services, including data networking, Ethernet, hosting, high speed Internet (HIS) access and Voice over Internet Protocol (VoIP) services, to small and medium sized businesses.

  • Market Cap: $856,640,667
  • YTD Price Change: -6.5%
  • P/E (LTM): 9.6x
  • Earnings CAGR (2011-2014): 60.7%


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Computer Modelling Group Ltd. (TSX: CMG) – $11.79

Software

Computer Modelling Group Ltd. (CMG) is Canada-based computer software technology company engaged in serving the oil and gas industry. The Company is a supplier of advanced processes reservoir modeling software with a client base of international oil companies and technology centers in over 50 countries. It has 550 oil and gas companies and consulting firms in more than 55 countries. The Company’s software products include STARS, GEM, IMEX, CMOST and BUILDER.

  • Market Cap: $940,214,793
  • YTD Price Change: -0.4%
  • P/E (LTM): 28.3x
  • Earnings CAGR (2011-2014): 11.8%

Avigilon Corp. (TSX: AVO) – $11.89

Communications & Networking

Avigilon Corporation is a Canada-based business intelligence and security solutions company. It develops, manufactures, markets and sells high definition (HD) and megapixel (MP) network-based video surveillance systems, video analytics and access control equipment for the global security market. The Company’s offerings include end-to-end product solutions, HD IP Cameras, Network Video Recorders (NVR), Analog Video Encoders, Avigilon Control Center, Avigilon Access Control Manager (ACM) and RIALTO Analytics Appliance. Its end-to-end product solutions include HD IP cameras, video management software, access control and adaptive video analytics.

  • Market Cap: $543,780,415
  • YTD Price Change: -36.8%
  • P/E (LTM): 15.3x
  • Earnings CAGR (2011-2014): 109.4%