3 Canadian Small Cap Stocks Set to Stumble?

Analysts see much downside potential for the Canadian small cap stocks on our list

SmallCapPower | August 1, 2017: Sell ratings by analysts almost never happen. Data from FactSet suggests that only ~5% of recommendations are sell ratings. Today we have identified three Canadian small cap stocks that have significant downside potential, according to sell-side analysts. The stocks on our list are covered by four or more analysts and have price targets over 40% lower than their current market price.

Related: Top 15 Penny Stock Picks of 2017 

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TerraVest Capital Inc. (TSX: TVK) – $9.60
Oil Related Services and Equipment

TerraVest Capital Inc. is a Canada-based holding company, which is focused on acquiring businesses. The Company’s segments include Fuel Containment, Fabrication and Service. The Fuel Containment segment is a manufacturer of items, such as propane vessels, pressure vessels, commercial and residential liquid containment units, as well as bulk propane trucks (which are primarily steel-based) for the North American market. Through its fabrication segment, it fabricates oil and gas wellhead processing equipment, through its subsidiaries TerraVest Industries Limited Partnership (RJV), NWP Industries LP (NWP) and EnviroVault Limited Partnership (EnviroVault) for the oil and natural gas industry in North America.

  • Market Cap: $176,017,766
  • Median Price Target:  $3.50
  • Downside: 64%

Pizza Pizza Royalty Corp. (TSX: PZA) – $16.79
Restaurants & Bars

Pizza Pizza Royalty Corp. owns the trademarks and trade names used by Pizza Pizza Limited (PPL) in its Pizza Pizza and Pizza 73 restaurants. PPL operates its Pizza Pizza Restaurants as franchise oriented restaurants and Pizza 73 Restaurants are owned, and operated as independent businesses. It operates through receipt of royalty income from the ownership of the Pizza Pizza and Pizza 73 Rights and Marks segment. Pizza Pizza is a franchise-oriented restaurant business operating in the province of Ontario in which it dominates the pizza quick service restaurant (QSR) segment. Pizza Pizza Restaurants operate in Ontario, Quebec, Saskatchewan, Manitoba and Nova Scotia.

  • Market Cap: $413,342,802
  • Median Price Target:  $10.00
  • Downside: 40%

Concordia International Corp. (TSX: CXR) – $1.75

Concordia International Corp, formerly Concordia Healthcare Corp, is a Canada-based pharmaceutical company. The Company, through subsidiaries, owns a portfolio of branded and generic prescription products. Its activities are divided into four segments: Concordia North America, includes sales of pharmaceutical products, such as Donnatal for the treatment of irritable bowel syndrome, Zonegran for the treatment of partial seizures in adults with epilepsy and Nilandron for the treatment of metastatic prostate cancer; Concordia International, includes a portfolio of branded and generic products that are sold to wholesalers, hospitals and pharmacies in over 100 countries, and focuses on acquisition, licensing and development of off-patent prescription medicines; Orphan Drugs, includes Photofrin, which is for the treatment of certain forms of rare cancer, and Corporate cost centre, includes centralized costs incurred by the Company.

  • Market Cap: $88,593,356
  • Median Price Target:  $0.87
  • Downside: 50%

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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