The shares of many small companies are rallying in April 2021. These small companies have not only reported strong growth in the recent quarterly fundamentals, but their strong financial growth trend is likely to sustain in the coming years as well.
TSX investors can buy any of the following three stocks of small Canadian companies to get handsome returns on their investment in 2021 and beyond.
Aya Gold & Silver stock
Aya Gold & Silver (TSX: AYA) is a Canadian gold and silver mining company with a market cap of $558 million. Last week, its stock continued to rally for the second consecutive week. Its stock rallied by 16% last week after ending the previous week with about 7% gains. The recent rally in Aya Gold & Silver stock came after it posted far better-than-expected 2020 earnings and revenue on March 26.
In the full year 2020, the company’s total revenue stood at US$13.8 million — much better as compared to analysts’ consensus estimate of US$11.7 million. These gains were mainly driven by a 61% jump in its silver production and a 55% rise in silver sales last year. Aya Gold & Silver stock has risen 467% in the last year, as the company continued to beat expectations, despite the pandemic-related operational challenges.
In 2021, analysts expect the company’s revenue to more than double and its adjusted earnings to grow by nearly 700%. That’s why I expect its stock to continue trading on a solid note in 2021.
Tecsys stock
Tecsys (TSX: TCS) is a Montreal-based enterprise software firm with its main focus on providing supply chain solutions to businesses. It currently has a market cap of $715 million. Tecsys stock rose by nearly 14% last week to end its seven-week long losing streak.
Its last week’s sharp gains came after the company on April 8 revealed that Fuel Transport — the Canadian transportation company — has started using Tecsys’s advanced supply chain execution software for its warehousing operations to modernize its tech stack.
In Q3 of the fiscal year 2021, Tecsys’s earnings per share (EPS) doubled on a YoY (year-over-year) basis to $0.12, beating analysts’ consensus estimates. For the quarter, its total revenue also registered 19% YoY positive growth. Analysts expect its earnings to rise by 161% to $0.47 in the fiscal year 2021, along with positive growth in its revenue.
These solid earnings and revenue growth expectations could help Tecsys stock continue rising in the coming months. That’s why you may want to add this tech stock to your portfolio now.
Karora Resources stock
Karora Resources (TSX: KRR) is a Toronto-based diversified mining firm. Its stock is currently trading at $3.96 per share, translating into a market cap of $583 million. Its stock rose by 13.3% last week, bringing its month-to-date gains to 18%.
In the quarter ended December 2020, Karora’s reported a more than 200% YoY rise in its EPS to $0.28. It was also 81% higher than analysts’ earnings estimate. During the same quarter, the company’s revenue rose by 22% from a year ago to $69.3 million. On the profitability side, its adjusted EBITDA jumped by 81% YoY in Q4, driving its 15.9-percentage-point EBITDA margin expansion.
These solid recent fundamentals justify a 147% rally in Karora Resources stock in the last year. I expect its stock to continue outperforming the broader market with its main focus on increasing its coal production and reducing costs at the same time.
