Multiple ResponsesQ: These companies (EGLX, WELL and AT) are getting killed on no news. I understand the environment with tax loss, covid, backdrop etc. What I don't understand is why the shorts aren't covering or appear to be. Also are these companies prime candidate's for a takeover?
Short-sellers may continue to view the selling as not done and would not want to exit too early. Essentially they are riding the negative momentum. Buyers are also not yet showing strength, but we think this will change in the new year. Of the three, we think AT is most likely to be acquired, then EGLX, then WELL. However, the management for all three has expressed that they will not sell easily.
What are your top 3 choices of Canadian small cap value stocks today for a 5 year hold?
It is tough to pick three, but if we had to choose we would go with: AT, CTS, and ANRG
And later......... AT now has 40% of its market cap as cash. It is profitable and has positive cash flow. Its US IPO was in June at US$10.15 and the stock is $3.23. Insiders own 16%. The stock has of course been a pig, but we think selling today would be closer to an eventual bottom. Things are not as bad as the stock price might indicate, in our view.
Lots of questions for 5iResearch yesterday. GLTA