EFX, TCW & LNR: Watch these producer manufacturing stocks amid current volatility - Kalkine Media

July 11, 2023 03:56 AM EDT | By Akanksha Vashisht
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Summary

  • Rising inflationary levels and the current increase in job gains reported by Statistics Canada have added fuel to rate hike expectations in the coming week.
  • Enerflex, a manufacturer of natural gas transportation equipment, reported a record revenue of CA$825 million in the first fiscal quarter of 2023.
  • Trican and Linamar reported YTD gains of 1.96%  and 12.41% as per their closing price on Monday.

The Canadian economy has been observing a barrage of indications pointing towards a potential rate hike in the next policy meet. Be it the rising inflation or the current increase in job gains reported by Statistics Canada, the current circumstances have further strengthened the chances of a rate hike by the central bank.

Rate hike expectations have led to slower property sales across the country as buyers anticipate increased borrowing costs in near future. Meanwhile, the banking sector could potentially perform relatively well as interest rates are on the increase.

ALSO READ: What to expect as the Central Bank leans towards another rate hike in July

As the market poises for an interest rate hike, investors may turn to sectors that have shown stable financial performance. The following producer manufacturing companies have reported year-on-year gains in their quarterly results for the March 2023 quarter.

Find out more about these stocks here:

Enerflex Ltd. (TSX: EFX)

Enerflex is engaged in the production and manufacturing of equipment and systems that are useful in natural gas transportation. Its main area of focus includes gas compression and its operations run across the world that are divided into three segments: US, Canada, and rest of the world.

For Q1 FY23, Enerflex reported a record revenue of CA$825 million, as against CA$323 million in the first quarter of 2022. The adjusted EBITDA was CA$122.8 million in March 2023 quarter, compared to CA$34.9 million in March 2022 quarter.

Image source: ©2023 Kalkine®; Data source: Company Reports

Meanwhile, Enerflex’s net earnings for the March 2023 quarter stood at CA$13.5 million. This marked an upswing from its net loss of CA$0.4 million in March 2022 quarter.

EFX closed at CA$9.57 on Monday, July 10, 2023. The stock has YTD gains of 12.46% as on July 10, 2023.

Trican Well Services Ltd. (TSX: TCW)

Trican provides equipment that is useful in drilling and stimulation of oil and gas wells through pressure pumping procedures. It also provides services such as coiled tubing, cementing, and fracturing.

For the March 2023 quarter, Trican reported a revenue of CA$297 million, which marked a 36% increase over its revenue of CA$218.9 million for the March 2022 quarter. The adjusted EBITDA for the quarter was CA$82.9 million, compared to CA$42 million for the March 2022 quarter. 

Image source: ©2023 Kalkine®; Data source: Company Reports

The stock closed at CA$3.65 on Monday, after reporting YTD gains of 1.96% as on July 10, 2023.

Linamar Corporation (TSX: LNR)

Linamar manufactures highly engineered products for the Agricultural and Aerial Work Platform industries. The company has expertise in light metal casting, forging and assembly of electric and traditional vehicle components and systems.  

The company reported a year-on-year increase of 28.9% in sales during March 2023 quarter to CA$2.29 billion. Meanwhile, the net earnings for the quarter were reported to be CA$ 117 million, as against CA$ 96.3 million for the previous corresponding period.

Image source: ©2023 Kalkine®; Data source: Company Reports

The stock closed at CA$ 70.03 on July 11, 2023, on Monday, July 10, 2023. The YTD gain on the stock was 12.41% as per Monday’s closing price.


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