Echelon Capital Equity analysts at Echelon Capital Markets added a pair of stocks to their “Top Picks Portfolio” for the second quarter of the year.
The list now contains 16 companies.
“We unfortunately report that Echelon’s Top Picks Portfolio underperformed for Q122 with a decline of 7.6 per cent while the S&P/TSX Composite and S&P/TSX Small Cap Indices returned 3.8 per cent and 8.4 per cent, respectively,” they said. “Our performance was within the context of the Russell 2000 Index declining 7.5 per cent for the quarter as it underperformed the larger cap S&P 500 return of negative 4.6 per cent.
“We note that our lack of exposure to oil and gas impacted our relative performance. Energy companies within the S&P/TSX Small Cap index were up an average of 45.7 per cent for the quarter where they closed the year with a weighting at 20.3 per cent of the index. Our negative 7.6-per-cent return compares to the broader TSX Venture Composite Index return of negative 5.0 per cent.”
The additions to the list are:
* Playmaker Capital Inc. with a “speculative buy” rating and $1.20 target. The average is $1.20.
“Fresh off a strong Q421 earnings print that saw the Company deliver quarterly revenues/EBITDA of $7.0-million/$2.5-million and exceptional quarter-over-quarter growth of 47 per cent/28 per cent, we envision Playmaker continuing to positively reset expectations across 2022 on the strength of its potent organic growth engine and highly engaging digital sports media ecosystem,” said analyst Rob Goff. “Playmaker’s playbook is being revealed as one that seeks to acquire a foundation of engaging, authentic properties and platforms, before pulling multiple organic growth levers to supercharge monetization. Playmaker Bench – its proprietary, in-house tech stack – has emerged as a pivotal contributor to the Company’s monetization strategy, both in selling prospective targets on Playmaker’s vision, and then more importantly, executing on robust advertising yield improvements; Bench essentially acts as the rising tide that lifts all boats in the ecosystem. However, while it’s likely the strongest organic growth lever, it doesn’t work in isolation. Playmaker thrives on the cross-pollination of platform capabilities – or what the Company refers to as centres of excellence – where areas of expertise, such as Yardbarker’s syndication team, are being leveraged across the entire business, unlocking new revenue streams for platform siblings Futbol Sites (FSN) and The Nation Network (TNN). Finally, layering secular industry tailwinds on top – such as the launch of online sports betting (OSB) across the Americas, i.e., Playmaker’s backyard – reflects a company that we see firing on all cylinders throughout 2022 and beyond.”
* Flagship Communities REIT with a “buy” rating and US$24 target. Average: US$23.88.
“Flagship owns a portfolio of manufactured housing communities (MHCs) across seven states in the central/Midwest U.S.,” said analyst David Chrystal. “The MHC industry has historically provided investors with consistent and stable organic growth throughout all economic conditions. We believe that Flagship is well-positioned to deliver strong organic revenue growth owing to (1) significant room to increase occupancy, (2) the rapidly rising cost of alternative accommodation options, and, (3) outsized wage growth among the REIT’s tenant base. The REIT trades at a substantial discount to our NAV estimate (18 per cent), and a materially lower 2022E FFO multiple than the U.S. peer group. We expect that as management establishes a public market track record, this discount will narrow.”
Returning stocks are: Silver X Mining Corp. ; BSR REIT); RediShred Capital Corp. ; Calian Group Ltd; CloudMD Software & Services Inc; Converge Technology Solutions Corp. ; Quisitive Technology Solutions Corp. ; Osino Resources Corp. ; Pan Global Resources Inc. ; Quipt Home Medical Corp. ; Diagnos Inc. ; Verano Holdings Corp; Ayr Wellness Inc. and E3 Metals Corp.