Q: I was just about to give up on Sylogist because of its downward trend over the past 5 weeks in a strong market. Then I discovered that CFRA rates it a Strong Buy!! I know that their report is algorithm-generated, but still! I checked out other CFRA algorithm-generated reports for other small-cap Canadian tech stocks and couldn’t find another Strong Buy (lots of sells). I originally signed up for 5i Research because you cover small Canadian companies. SYZ never issues stock, so there's no analyst coverage. Only algorithms. So how much credence would you put on CFRA's algorithm? What is causing it to generate a Strong Buy for SYZ?
5i Research Answer:
We do not have strong insight into CFRA's methodology, but SYZ is expected to see EPS more than triple in 2024. This, combined with the fact that small caps can do well in a rate pivot, and are significantly undervalued vs large caps right now, are likely big factors.