Colliers International Group Inc.

Colliers International Group Inc (TSX: CIGI) is a real estate services and investment management company. It has operations in over 60 countries and provide expert advice and services to maximize the value of the property for real estate occupiers, owners, and investors.

Why Investors Should Book Profit?

• Lower operating margins V/s Industry: In Q2 2021, the Company failed on maintaining its pace and witnessed lower performance across its margin matrix and ROE against the industry, which exhibits the pressure on company.

• Stretched Valuation: CIGI shares are available at an NTM Price/Cash Flow multiple of 26.3x compared to the industry (Real Estate Operations) median of 11.5x. This implies that CIGI shares are extremely overvalued against the industry.

• Increase in Leverage: The company’s debt to equity ratio at the end of the June 2021 stood at 1.57x higher than 1.44x reported at the end of the March 2021 quarter and higher than the industry median of 0.72x. This implies higher balance sheet risks.

• Trading above the upper band of the Bollinger Bands®: Recently, the stock witnessed a healthy rally on the daily price chart and now it has moved above the upper band of the Bollinger band, indicating the stock is perhaps overbought and due for a price correction or a consolidation. Furthermore, the momentum oscillator RSI (14-Period) is trading at ~82.33 levels, which also indicates that the stock is in overbought zone and there is possibility of price consolidation.

Source: REFINITIV, Analysis by Kalkine Group 

Valuation Methodology (Illustrative): EV to EBITDA

*1USD-1.25CAD 

Stock recommendation

Although the company posted healthy growth in its topline but witnessed lower performance across its operating margin matrix and ROE against the industry, exhibiting the pressure on company. Moreover, technical indicators also suggesting the stock is in overbought zone and a potential price correction or consolidation is on the cards. Therefore, based on the above rationale and valuation, we recommend a “Sell” rating on the stock at the closing price of CAD 165.27 on August 4, 2021. 

Docebo Inc 

Docebo Inc. (TSX: DCBO) is a Canada-based company that offers cloud-based artificial intelligence (AI) powered e-learning platform. It provides an easy-to-use customizable learning platform, with the end-to-end capabilities that are needed to train internal and external workforces, partners and customers. Its AI-based E-learning platform allows customers to take control of online delivery of their desired training and retain institutional knowledge with real time tracking of training results

Why Investors Should Book Profit?

• On Tuesday, DCBO shares moved above the Upper Bollinger Band©, with a short, bodied Candle stick and in very next trading session a DOJI kind patter appeared which indicates that the bulls are getting indecisive and control in stock might shift in the hands of Bears.
• The leading momentum indicator, the 14-day RSI hovering in an overbought zone at 75, which implies that price consolidation could be seen in the stock in near term.

Source: REFINITIV, Analysis by Kalkine Group 

• The stock is generating negative return on shareholder’s money, with TTM ROE of negative 12.4%.

Stock Recommendation: On the valuation front, DCBO shares are trading at an EV/Sales multiple of 17.74x on NTM basis whereas Industry Peer’s Median 12.98x, which implies a valuation gap of 36% between DCBO and Peer’s. Further, given the heightened uncertainties in the wake of delta variant spread, there might be some valuation consolidation we can see in near-term, and companies with not a very strong fundamentals together with extremely overvalued price could fall sharply. Therefore, we recommend a “Sell” rating on the stock at the closing price of CAD 87.44 on August 04, 2021.

NanoXplore Inc 

NanoXplore Inc. (TSX: GRA) is a graphene company, manufacturer, and supplier of high-volume graphene powder for use in industrial markets. The company provides graphene-enhanced plastic and composite products to various customers in transportation, packaging, electronics, and other industrial sectors. Geographically, it generates a majority of revenue from the United States.

Why Investors Should Book Profit?

• In the last trading session, GRA shares have strongly crossed the Upper Bollinger Band© and registered a closing above it. Normally a deviation above 2x from the 20-day SMA indicates that a potential price correction could take place in near-term.
• The leading momentum indicator 14-day RSI hovering in an overbought zone at 74.4, which implies that a potential price consolidation could take place from the current levels.

Technical Price Chart (as on August 04, 2021). Source: REFINITIV, Analysis by Kalkine Group

• The stock is trading at a stretched valuation. The stock is available at a forward EV to Sales multiple of 6.33x against the industry average of 1.77x

Stock Recommendation: The company is reporting losses right from operating level to bottom. Further, the heightened uncertainties over global equity markets on the back of resurgence in the Covid-19 cases and lackluster performance of China’s manufacturing sector in July signaling a potential downtrend trend. Moreover, the stock is trading at stretched valuation. Also, technical indicators are showing a potential price correction or consolidation. Therefore, booking profit near the peak of the stock would be a wise decision. Hence, we recommend a “Sell” rating on the stock at the closing price of CAD 5.65 on August 04, 2021.

*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.