RY 179.2 0.0056% SHOP 172.86 0.5175% TD 101.95 0.6317% ENB 62.09 0.0161% BN 94.2 0.9106% BAM 86.72 0.2543% TRI 276.76 0.3554% BMO 154.22 -1.179% CSU 4874.8252 0.2984% CP 104.91 -0.0857%
RY 179.2 0.0056% SHOP 172.86 0.5175% TD 101.95 0.6317% ENB 62.09 0.0161% BN 94.2 0.9106% BAM 86.72 0.2543% TRI 276.76 0.3554% BMO 154.22 -1.179% CSU 4874.8252 0.2984% CP 104.91 -0.0857%

small-cap

One Industrial Stock under the Radar- PYR

Nov 12, 2021 | Team Kalkine
One Industrial Stock under the Radar- PYR

 

PyroGenesis Canada Inc. (TSX PYR) is a Canada-based technology company. The Company designs, develops, manufactures and commercializes advanced plasma processes.

Key Highlights:

Catering diverse range of industries: The Company provides engineering and manufacturing solutions, contract research, as well as process equipment packages to the defense, metallurgical, mining, advanced materials including three dimensional (3D) printing, and environmental industries. The Company offers plasma atomized metal powders, aluminum and zinc dross recovery, waste management systems and plasma torches.

No Balance Sheet risk: The company is virtually debt free, with Debt/Equity ratio of 0.09x as of June 30, 2021, vs. industry median of 0.89x. Also , % long-term debt to total capital ratio stood at 7.7% vs industry median of 34.3%. A lower debt position in the total capital structure implies a lower balance sheet risk.

Gaining Technical Strength: On daily price chart, PYR shares breached its crucial 50-day SMA resistance and traded above that for the three consecutive sessions. Moreover, momentum indicator 14-day RSI hovering in a neutral zone with bullish bias at 61.12. Also, 14-day RSI taking 60 support, another positive indicator, implies that stock carrying potential to move up from the current trading level.

Technical Price Chart (November 11, 2021). Source: REFINITIV, Analysis by Kalkine Group

Risk Associated to Investment

The company is exposed to variety or risks ranging from liquidity risk, credit collection risk, forex risk and supply chain risk as well.

Financial Highlights: Q2FY21

Source: Company Filing

  • During the Q2FY21, the company’s reported revenue surged by 289% to CAD 82.81 million from CAD 21.28 million reported in the same quarter of the previous financial year.
  • Gross profit also soared up by 290% to CAD 49.33 million vs CAD 12.66 million reported a year in Q2FY20.
  • Gross margin improved slightly to 59.6% vs 59.5% reported in the comparable quarter of the previous financial year.
  • In Q2FY21, the company reported net losses of CAD 20.36 million vs CAD 5.22 million of net profit reported in Q2FY20.
  • The company’s financial expenses significantly lowered to CAD 40,086 in Q2FY21 from CAD 276,928 in Q2FY20, primarily attributable to lower interest and accretion on lower amounts of debt.

Stock Recommendation

PyroGenesis Canada Inc. is a leader in the design, development, manufacture and commercialization of advanced plasma processes. The company maintains its competitive advantage by remaining at the forefront of technology development and commercialization. Their core competencies allow PyroGenesis to lead the way in providing innovative plasma torches, plasma waste processes, high-temperature metallurgical processes, and engineering services to the global marketplace.

Further, technical indicators are moving well for the stock, with prices moved above its crucial short-term resistance and momentum indicator are hovering in a neutral zone with strong bullish bias.

However, the company is exposed to variety of risks.  Hence, we recommend a “Speculative Buy” recommendation at the closing price of CAD 5.22 (as on November 11, 2021).

*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.

Technical Analysis Summary

1-year Price Chart (as on November 11, 2021). Source: REFINITIV, Analysis by Kalkine Group

*The reference data in this report has been partly sourced from REFINITIV.


Disclaimer

The advice given by Kalkine Canada Advisory Services Inc. and provided on this website is general information only and it does not take into account your investment objectives, financial situation and the particular needs of any particular person. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. The website www.kalkine.ca is published by Kalkine Canada Advisory Services Inc. The link to our Terms & Conditions has been provided please go through them. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations later.