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October 7, 2019

TSX Today – A Look at the Week Ahead on the TSX Index

Disclaimer: The writer of this article may have positions in the securities mentioned in this article. The fact they hold positions in securities has had no impact on the production of this article

By Mathieu Litalien

October 7, 2019

We are entering our first full week of the quarter and although earnings south of the border are ramping up, it will still be a quiet week for Canadian stocks. That being said, there are still a few intriguing quarterly results on the docket and a couple of key releases that may give investors some economic insight.

Tuesday, October 8

There is plenty of housing data to be on the look out for this week. On Tuesday, Canadian Housing Starts for September will be released. The consensus is for a 4.0% decline over September of last year. Likewise, Canadian Building Permits for August will be released shortly after. It is expected that permits increased by 10 basis points over July.

Housing data is closely watched by the markets as it is a key economic indicator. It can have an impact on banking, construction, homebuilders, lumber companies and more. Weak housing data can be a sign of a slowing economy.

Theratechnologies (TSX:TH), a small cap biotechnology company, is scheduled to report third quarter earnings before the open on Tuesday. It will be an important event for the company who’s stock price has dipped by approximately 40% in 2019.

At the heart of its issues, the company’s new flagship drug Trogarzo was on track to receive expedited approval by the European Commission in early 2019. Unfortunately, approval was delayed and it only received the go-ahead a couple of weeks ago.

Analysts are expecting the company to post a loss of 4 cents per share on revenue of $18 million. This would represent 32.5% growth over the third quarter of last year. Now that Trogarzo has received EMA approval, the expectation is for 50%+ growth over the next few years.

Of note, Theratechnologies was named to the inaugural TSX30 which ranks the top performers on the TSX Index. It ranked 21st out of 583 companies and its share price gained 161% over the past three years.

Friday, October 11

Another interesting growth company is scheduled to announce earnings this coming week. MTY Food Group (TSX:MTY) operates as a franchiser in the quick service and casual dinning industry. Its brands include Baton Rouge, Cultures, Country Style, ManchuWOK, Mr. Sub, Taco Time and Tutti Fruitti among a dozen more.

A former Dividend Aristocrat, MTY changed its focus from a reliable dividend stock to one that is more focused on growth through acquisition. Over the past five years, it has grown earnings by an average of 18% annually. The expectation is for 21% annual earnings growth over the next five years.

Analysts expect earnings of $1.02 per share on revenue of $167.5 million. This represents growth of 15% and 84% over the third quarter of 2018. Results will be released before the bell on Friday.

*Mat Litalien owns shares in Theratechnologies. 

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Mathieu Litalien

Mathieu is an individual investor and has been investing part-time for the better part of the past 20 years. He is primarily interested in fundamental analysis, focusing on the long-term and his portfolio is composed primarily of dividend-paying equities. Mathieu has a moderate risk profile and also looks for growth and value. His passion for finance and the markets have led him to his MBA and writing for Seeking Alpha, Motley Fool and Stocktrades. Mathieu also focuses primarily on stock research and content production for Stocktrades.ca Premium and the Stocktrades blog.

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