The TSE Index was down 2.04% in the month of April, up 3.61% YTD and 5.22% over the past year. Canadian GDP was up 0.2% in the first quarter of 2024 and 0.93% on a year-over-year basis; in the USA the GDP was up 1.6% for the first quarter and 3.00% on a year-over-year basis. Canadian inflation rate was 2.70% annually in April 2024 and the US annual rate was 3.4% in April 2024. With this background, the following Table presents the highest and lowest performers for the month of April, 2024.

Propel Holdings Inc. (PRL)

The top performer of April was Propel Holdings Inc. whose stock price was up 35% on the month, up 72% year-to-date, and up 235% over the past year. One year ago, PRL was trading near all-time lows (given the stock’s recent inception) at $6.94. PRL has had a meteoric run-up since then hitting numerous 52-week and all-time highs. The stock closed at a new all-time high at $22.80 on April 11^th before reaching an even higher levels, closing at $27.95 on May 9^th.

PRL is an innovative fintech company operating through its main three brands, MoneyKey and CreditFresh in the US, and Fora in Canada. Propel provides access to credit for both US and Canadian consumers which are considered underserved by the conventional financial systems. PRL has its own proprietary AI platform that evaluates consumer credit differently than traditional methods of credit scores, and the company has recently launched its Lending-as-a-Service (LaaS) product line in partnership with Pathward.

In first quarter earnings, PRL reported adjusted EPS of $0.41, beating estimates of $0.37. GAAP EPS was $0.35, beating estimates of $0.31. Revenue of $96.5 million matched estimates and displayed growth of 47% year-over-year. PRL saw loans increase 39% from same period a year prior. EBITDA rose 73%, net income rose 77%, and EPS rose 81%, all year-over-year. Return on equity was an impressive 49% improving from the prior period at 35%. As a result of these strong results, PRL raised its dividend by 8%. The company noted 'strong demand' in a usually slow quarter which highlights the momentum that PRL is currently seeing.

TerraVest Industries Inc. (TVK)

The second-best performer of April was TerraVest Industries Inc. (TVK) whose stock price was up 20% on the month, up 63% year-to-date, and up 168% over the past year.

TVK operates as a diversified industrial company that produces and markets goods and services to a variety of different end markets including agriculture, energy, mining, transportation, etc. The company has a broad portfolio of businesses that they have acquired over the years. For example, one of its primary businesses is to provide HVAC (home heating and cooling products) equipment such as refined fuel tanks, air conditioning equipment and control, etc. for commercial and residential customers.

The stock’s big jump in April can be attributed to this acquisitive growth strategy. On April 2^nd, TVK announced that it agreed to acquire Advance Engineered Products, a Saskatchewan-based manufacturer and service provider in the tank-trailer industry. Financial details were not immediately disclosed but stock jumped 6.5% following the news. TVK said that the acquired company’s, “diverse product portfolio and extensive service platform" complements TVK’s existing tank trailer businesses.

TVK released Q1 earnings earlier on in this cycle in February but highlighted by revenue growth of 29% year-over-year coming in at $228 million versus forecasts of $177.2 million in the prior year. Net income was $19.3 million versus $13.1 million in the year prior displaying growth of 48%. Diluted net income per share came in at $0.91. Cash from operating activities also increased 76% year-over-year to $38.6M. An evidently strong quarter from TVK while the company had also previously raised its dividend by 20%.

Goeasy Ltd. (GSY)

 The third best performer of April was goeasy Limited (GSY) whose stock price was up 10% on the month, up 11% year-to-date, and up 90% over the past year. The stock has been quite volatile recently as well as historically with a beta at 1.95. Goeasy has seen its stock dip to a 52-week low of $101.34 in 2023, highlighting this volatility.

GSY is one of Canada’s leading non-prime consumer lenders operating under Easyhome, Easyfinancial and LendCare brands. GSY operates through two segments, Easyfinancial and Easyhome, with the former driving a significant chunk of the company’s total revenues.

In April, there was not too much material information that warranted the price movement. GSY received an analyst upgrade to “Outperform” from CIBC on the back of impacts from the Federal Governments Budget. The government was expected to ‘crackdown on predatory lending,’ however changes ended up being relatively minimal in the Spring Budget and CIBC had weighed this announcement heavily. GSY did release Q1 earnings early on in May, delivering EPS of $3.83 matching estimates. Revenue was $357.1 million beating estimates of $347.9 million and displayed growth of 24% year-over-year. Originations rose 12% while applications rose 41% from the year prior, highlighting strong demand. Guidance calls for the year to be 'at the high end of prior forecasts.’ While not a blowout quarter, it was a decent start to the fiscal year for GSY, and management commentary was positive.

Unlock the Power of Informed Investing with 5i Research!

DIY investing doesn't have to mean going it alone. At 5i Research, we're your trusted partner in navigating the stock market. Our platform offers comprehensive stock and market research, empowering you to make smart investment decisions. 

• Investor Q&A: Have burning questions? Get answers from our team of experts and fellow investors in our dedicated Q&A section.
• Research Reports: With over 60 meticulously researched Canadian stocks, our reports offer in-depth analysis, giving you the confidence to invest wisely. 
• Model Portfolios, Alerts, Forums, Portfolio Tracking, and Much More...

TFII International Inc. (TFII)

The worst performer of April was TFI International Inc. (TFII) whose stock price was down 17% on the month, down 1% year-to-date, and up 23% over the past year. TFII pulled back hard in April after opening the month just under $215, near the 52-week high levels $220.93.

TFII operates as a diverse transportation operator in the United States and Canada. The company has a successful track record of acquiring companies and integrating them into its decentralized network of operating segments. TFII provides a wide variety of services in the transportation field such as same-day and next-day delivery, freight, pickup and delivery of small packages, etc.

The company opened the month strong, closing its $1.1 billion acquisition of Daseke on April 2^nd, which prompted many analysts to boost their price targets. The highs were short lived as the trucking industry continued to show weakness, particularly peer company JBHT reported weak earnings bringing down competitors.

TFII reported Q1 earnings on April 25^th, displaying the anticipated weakness. EPS was $1.24 compared to $1.33 the prior year, and short of estimates ($1.36). Revenue was $1.87 billion, up 1.1% from the prior year and matching estimates. Package and courier revenue fell 8.3%; Truckload -4%; Logistics +24%, LTL -1.5%. EBITDA was $268.4M, up 1.6% from the prior year but short of estimates ($278.5M). US LTL was strong, but TFII admitted it was a 'challenging environment'. Still, it was good that revenues could in fact still rise as there was only one acquisition than closed in the quarter. TFII is a strong company that is sensitive to the economy which investors are currently feeling the effects of.

Real Matters Inc. (REAL)

The second worst performer of April was Real Matters Inc. (REAL) whose stock price was down 16% on the month, down 18% year-to-date, and up 1% over the past year. REAL’s stock really has not done much over the past three years being very flat and choppy. Going back to April of 2022, REAL was in the same $4-$5 range that it continues to be stuck in today.

REAL operates in the real estate appraisal and title service industry in North America, the company plays an essential role in the value chain of the real estate market by helping mortgage lenders reduce the risk of lending and meet regulatory requirements. In addition, REAL also provides insurance inspection services by ensuring all the historical and current owners of the property are taken into account during the due diligence process, maintaining transparency between buyers and sellers. REAL generates revenue by providing local knowledge and expert opinions on the fair market value of a residential property. Mortgage originations are one of the key drivers of growth for REAL, and with the state of the housing market over the last few years, the recent struggles can be justified.

There was no material information that came out in April impacting REAL.

Ag Growth International Inc. (AFN)

The third worst performer of April was Ag Growth International Inc. (AFN) whose stock price was down 14% on the month, up 5% year-to-date, and down 11% over the past year. AFN actually started the month quite well, touching 52-week highs of $64.51 before things began to turn and ultimately fell hard at the end of the month.

AFN is a leading provider of equipment solutions that support the efficient storage, transportation, and processing of food on a global scale. The company has manufacturing facilities in Canada, the US, Brazil, France, India, and Italy, allowing it to distribute its products worldwide.

AFN reported weak first quarter results to end April prompting the selloff. EPS was $0.39 missing estimates of $0.67. Revenue was $314.5 million, declining 9% year-over-year, and missed estimates of $356.8 million. EBITDA also missed estimates by 5%. Management notes 'pockets of cautious purchasing behaviour' and expects all of its growth to come in the second half of the year. EPS growth is still expected for the full year. However, with debt high (6X cash flow), declining sales and a weakening outlook, there are plenty of forces working against AFN. The stock is now very cheap, but there is plenty riding on the second half of the year’s results.

Take Care,