Most Oversold TSX Small Caps During the Past Week

The four TSX small caps on our list all have low Relative Strength Index (RSI) scores

SmallCapPower | October 15, 2018: The United States Federal Reserve raised interest rates to 2.25% recently, which contributed to a major North American stock market selloff over the past week. From October 8 – 11, 2018, the TSX fell 4.1%, the NASDAQ declined 5.4%, and the Dow Jones dropped 5.1%. Today, we have identified four TSX small caps that were oversold during this period as measured by Relative Strength Index (RSI) scores. RSI is a measure of price momentum; values over 70 indicate a stock might have been overbought, while a score below 30 indicates being oversold. These companies on our list could see a bounce-back should the market believe they were oversold during the correction.

Hardwoods Distribution Group (TSX:HDI) – $14.87
Forest & Wood Products

Hardwoods Distribution Group is a distributor of architectural building products including decorative surfaces, plywood and high-grade hardwood to clients across Canada and the United States. The Company has three leading distribution brands: Hardwoods, Frank Paxton and Rugby Architectural Building Products. The Company announced Q2/2018 sales of $298.2M, a 7.4% increase Y/Y, with an adjusted EBITDA of $16.8M.

  • Market Cap: $318.2 Million
  • 1 – Week Total Return: -8.5%
  • 6 – Months Total Return: -19.4%
  • RSI Simple – 14 Days: 8.83

Trillium Therapeutics Inc. (TSX:TRIL) (NASDAQ:TRIL) – $4.82
Biotechnology

Trillium Therapeutics is a clinical-stage biotechnology company that develops therapies for cancer treatment. The Company’s flagship project focuses on negating the effects of the CD47 molecule to improve the immune system’s ability to detect and destroy cancer cells. Trillium currently has five clinical programs within its pipeline all of which are in Phase 1 of clinical study. The Company announced that it will provide updates on two clinical trails at the 16th Annual Discovery on Target conference in Boston, Massachusetts and at the European Organization for Research and Treatment in Cancer (EORTC CLTF) meeting in St. Gallen, Switzerland on September 28, 2018.

  • Market Cap: $69.3 Million
  • 1 – Week Total Return: -21.4%
  • 6 – Months Total Return: -44.8%
  • RSI Simple – 14 Days: 11.25

Heroux Devtek Inc. (TSX:HRX) – $13.23
Aerospace Parts

Heroux Devtek is a designer, developer, and manufacturer of aerospace products. The Company specializes in landing gear and actuation systems manufacturing for both commercial and military aircraft. In July, the Company announced that it had been awarded a five-year contract by Lockheed Martin Aeronautics Company to manufacture the landing gear for the C130-J Hercules aircraft beginning in January 2020. The Company reported sales of $85.8M for the quarter ended June 30, 2018 and an adjusted EBITDA of $12.2M.

  • Market Cap: $479.2 Million
  • 1 – Week Total Return: -5.8%
  • 6 – Months Total Return: -9.4%
  • RSI Simple – 14 Days: 11.93

Western Forest Products Inc. (TSX:WEF) – $1.87
Forest & Wood Products

Western Forest Products is a Canada-based lumber company operating in British Columbia and Washington State. The Company produces 1.1 Billion board feet/year (Bbf), primarily of red cedar and Japan specialty. Its timber resources are largely unaffected by the mountain pine beetle, a pest that threatens to kill large proportions of western forests. The Company announced Q2/2018 revenues of $327.8M and adjusted EBITDA of $50.2M, a 7% increase in EBITDA from the same period last year.

  • Market Cap: $726.8 Million
  • 1 – Week Total Return: -9.2%
  • 6 – Months Total Return: -30.8%
  • RSI Simple – 14 Days: 14.29

Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.

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