Goal: Identify those small cap companies on TSX & TSXV that are generating a lot of free cash flow (FCF/Total Revenue > 25%). Free cash flow is a strong indicator of a company’s ability to generate cash from business after meeting capital expenditure requirement.
Screening Criteria
Companies with revenue of over $50 million in last 12 months, have Total Economic Value (TEV) between C$10- 100 million and have FCF as percentage of revenue of over 25%, indicating that these companies are generating a lot of free cash flow.
| Company Name |
Exchange:Ticke |
Company Description |
Market Cap $M |
Total EV [Latest] (C$ mm)] |
Total Revenue [LTM] (C$ mm |
Free Cash Flow as % of Total Rev |
| QLT Inc. |
TSX:QLT |
a global biopharmaceutical company engaged in the business of discovering, developing and commercialization of therapies |
278.07 |
65.9 |
127.7 |
73.4% |
| Stoneham Drilling Trust |
|
Stoneham Drilling Trust (the Trust) is an open-ended investment trust. The Trust is engaged in providing contract drilling services to oil and natural gas exploration and production companies operating within the Western Canada Sedimentary Basin and the Anadarko Basin of Oklahoma. |
25.35 |
79.2 |
79.0 |
43.9% |
| Foremost Income Fund |
TSX:FMO.UN |
Foremost Income Fund is an open-ended mutual fund trust. The Fund is comprised of two operating entities: Foremost Universal LP (Universal) and Foremost Industries LP (Foremost). Universal designs, manufactures, sells and services oil treating systems, pressure vessels, fluid storage tanks, gas separators, steam generators and compression equipment. Foremost designs, manufactures, sells and services drilling equipment, heavy all-terrain vehicles and related parts and tooling. |
128.47 |
94.9 |
151.2 |
40.8% |
| Divestco Inc. |
TSX:DVT |
Divestco Inc. (Divestco) is an exploration services company that provides an integrated portfolio of software, services, data and consulting to the oil and gas industry. |
19.3 |
54.0 |
80.1 |
40.2% |
| Chesswood Income Fund |
TSX:CHW.UN |
Chesswood Income Fund (the Fund) is an open-ended, limited purpose trust. The Fund was created to invest in the financial services industry in Canada and the United States through the acquisition of cars4U Ltd and the indirect acquisition of Pawnee Leasing Corporation (Pawnee). |
31.84 |
73.4 |
76.8 |
34.9% |
Information as of December 11, 2009
Source: Capital IQ