Heroux-Devtek (OTC:HERXF) Stock, Quote.Headers.trade-ideas

Heroux-Devtek Inc designs develops, manufactures, and repairs landing gear and actuation systems and components for the aerospace market. It also provides hydraulic and electromechanical flight control actuators, custom ball screws, and fracture-critical components. Geographically, the company generates a majority of its revenue from the United States and the rest from the United Kingdom, Canada, Spain, and other regions.

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HERXF

TSX:HRX

Heroux Devtek Inc (TSX: HRX) (OTC: HERXF)

Desjardins Hikes Heroux Devtek&#39;s Price Target By 8%

Earnings

Heroux-Devtek Q4 Profit Surges 12%

Heroux-Devtek Inc

National Bank Financial Inc analyst Cameron Doerksen maintains Heroux-Devtek (OTC:<a class="ticker" href="https://www.benzinga.com/stock/HERXF#OTC">HERXF</a>) with a Outperform and raises the price target from $23 to $26.

National Bank Financial Inc Maintains Outperform on Heroux-Devtek, Raises Price Target to $26

Heroux Devtek Inc&nbsp;(TSX: HRX) (OTC: <a class="ticker" href="https://www.benzinga.com/stock/herxf#OTC">HERXF</a>)<a class="editor-rtfLink" href="https://www.benzinga.com/quote/HERXF" style="background-image:initial; background-position:initial; background-size:initial; background-repeat:initial; background-attachment:initial; background-origin:initial; background-clip:initial; margin-top:0pt; margin-bottom:0pt; color:#4a6ee0" target="_blank">&nbsp;price target has been raised&nbsp;</a>to C$27 from C$25 by&nbsp;Desjardins&nbsp;analyst Benoit Poirier.
The analyst reiterated the Top Pick rating on the shares.
The analyst mentioned that Heroux Devtek reported another solid quarter despite challenging operating conditions.
Poirier adds that while these issues are expected to persist in the mid-term, management&rsquo;s strong operational track record gives confidence in its ability to navigate through this challenging environment while unlocking value for shareholders.
The analyst believes Heroux Devtek presents a compelling value thesis, with an attractive valuation and a healthy balance sheet, to opportunistically unlock inorganic growth opportunities, with encouraging signs that the air travel recovery is on its way.
Price Action:&nbsp;HRX shares are trading higher by 5.32% at C$15.04 on TSX on the last check Monday.
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Desjardins Hikes Heroux Devtek's Price Target By 8%

ScotiaBank upgrades Heroux-Devtek (OTC:<a class="ticker" href="/stock/HERXF#OTC">HERXF</a>) from Sector Perform to Sector Outperform and raises the price target from $13 to $16.5.

Upgrades

ScotiaBank Upgrades Heroux-Devtek to Sector Outperform, Raises Price Target to $16.5

Heroux-Devtek Inc (OTC: <a class="ticker" href="/stock/herxf#OTC">HERXF</a>) posted a 12% gain in its fourth-quarter profit.

Heroux-Devtek's quarterly net income climbed to C$9 million, or 29 Canadian cents per share, versus C$8 million, or 26 Canadian cents per share, in the year-ago period.

Its sales gained 3% to C$109.0 million.

Héroux-Devtek Non-GAAP EPS of C$0.27, revenue of C$163.5M

Héroux-Devtek Inc. (HERXF) Q3 2024 Earnings Call Transcript

Héroux-Devtek Inc. 2024 Q4 - Results - Earnings Call Presentation

Héroux-Devtek reports Q4 results

Heroux-Devtek Inc. (HERXF) Q4 2024 Earnings Call Transcript

Héroux-Devtek enters into agreement to be acquired by Platinum Equity

Heroux-Devtek: A Premium On Acquisition, But Not The Best M&A Deal

<a href="https://investorplace.com">InvestorPlace - Stock Market News, Stock Advice &amp; Trading Tips</a>
On July 11, private equity firm Platinum Equity Advisors announced that it would acquire H&eacute;roux-Devtek (OTCMKTS:<a href="https://investorplace.com/stock-quotes/herxf-stock-quote/">HERXF</a>), a Quebec-based aerospace firm. The <a href="https://www.newswire.ca/news-releases/heroux-devtek-enters-into-definitive-agreement-to-be-acquired-by-platinum-equity-846165900.html">$1.35 billion</a> deal is one of the many Canadian acquisition targets that are or should be on American firms&rsquo; buy lists.&nbsp;



Why are American firms <a href="https://www.maplecouncil.org/momentum-content/2023/3/23/mampa-into-canada-five-areas-of-interest-for-us-buyers">attracted to Canadian businesses</a>? The reasons include close geometric proximity to the U.S. and similar business practices and regulatory approval protocols.&nbsp;



While the H&eacute;roux-Devtek acquisition is a private-equity sponsored transaction, I can think of plenty of strategic targets for American firms to feast their eyes on. Two industries that come to mind are cannabis and clean energy.&nbsp;



With that in mind, I&rsquo;ll recommend three Canadian acquisition targets, all of whom trade on a U.S. stock exchange. To ensure these businesses are large enough, I&rsquo;ll restrict my search to those with market capitalizations of $1 billion or more.&nbsp;



According to S&amp;P Global Market Intelligence, 85 such firms exist. Let&rsquo;s examine the three that should be most attractive to strategic buyers.



<h2>Thomson Reuters (TRI)</h2>



<div><img width="300" height="169" src="https://investorplace.com/wp-content/uploads/2019/11/newspapers1600-300x169.jpg" alt="newspapers folded and arranged in row like books on a shelf. gray background. media stocks"><div>Source: Shutterstock</div></div>Thomson Reuters (NYSE:<a href="https://investorplace.com/stock-quotes/tri-stock-quote/">TRI</a>) is <a href="https://www.sedarplus.ca/csa-party/records/document.html?id=06594f27cbdabd121caab46351ac9d3f45fdc8f145f37ad8d124367a22ad5bf0">69% owned by Woodbridge Company</a>, a holding company for the Thomson family of Canada. Any deal would have to get the green light from Chairman David Thomson and his brother Peter, who sits on Thomson Reuters board, and is Chairman of Woodbridge.



The company provides information, technology and expertise to industry professionals in tax and accounting, news and media, and legal. It has <a href="https://investors.thomsonreuters.com/static-files/47412ad2-d720-4a02-99c7-cbd7c425c16d">five reporting segments</a>. Among them are Legal Professionals (41% of 2023 revenue if $6.8 billion), Corporates (24%), Tax &amp; Accounting Professionals (16%), Reuters News (12%) and Global Print (7%).&nbsp;



Currently, Thomson Reuters has an enterprise value of $76.49 billion, 25x EBITDA. For anyone looking to buy the company, they would likely have to pay close to $100 billion or more.&nbsp;



S&amp;P Global (NYSE:<a href="https://investorplace.com/stock-quotes/spgi-stock-quote/">SPGI</a>) has a market cap about double Thomson Reuters. So it might be able to pull off the acquisition. Whether it would want to is another thing entirely.&nbsp;



<h2>TFI International (TFII)</h2>



<div><img width="300" height="169" src="https://investorplace.com/wp-content/uploads/2022/03/tfii_tfi_international_1600-300x169.png" alt="Canpar logo on a delivery truck in a street of Toronto, Ontario. Canpar, part of TFI international, is a Canadian courier specialized in parcels &amp; letters shipping"><div>Source: BalkansCat / Shutterstock.com</div></div>TFI International (NYSE:<a href="https://investorplace.com/stock-quotes/tfii-stock-quote/">TFII</a>) has an enterprise value of <a href="https://www.morningstar.com/stocks/xnys/tfii/valuation">$20.73 billion</a>, 12.75x the transportation and logistics company&rsquo;s EBITDA.



The company&rsquo;s history dates back to <a href="https://tfiintl.com/wp-content/uploads/2024/02/AIF-2023_VF-2.pdf">1957</a>. But it was only in 1996 when a new management team led by Alain B&eacute;dard took over. Then the business really began thriving by focusing on increasing revenues and profits. Also, it strengthened its position in the North American transportation market and created a more balanced revenue mix.&nbsp;



While organic growth has been generated, TFII is known for making plenty of acquisitions, both big and small. Since 1996, B&eacute;dard and his management team have made over <a href="https://tfiintl.com/wp-content/uploads/2024/05/TFI_corporateOverview_Mar2024.pdf">90 acquisitions</a>. Many of them are in the U.S., where it generates two-thirds of its revenue.&nbsp;



In 2023, it made <a href="https://tfiintl.com/wp-content/uploads/2024/02/AIF-2023_VF-2.pdf">11 acquisitions</a>, none of them significant to top-line revenue. However, in 2024, it&rsquo;s already made one big move, acquiring Daseke, a flatbed and specialized transportation company, for <a href="https://tfiintl.com/wp-content/uploads/2024/04/TFI-International-Press-Release-April-1st-2024-ENG.pdf">$1.1 billion</a>.&nbsp;



I think TFI would be an excellent acquisition for Berkshire Hathaway (NYSE:<a href="https://investorplace.com/stock-quotes/brk-a-stock-quote/">BRK-A</a>, NYSE:<a href="https://investorplace.com/stock-quotes/brk-b-stock-quote/">BRK-B</a>). The latter could merge it with McLane Company, the foodservice distribution business it owns.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;



<h2>Docebo (DCBO)</h2>



<div><img width="300" height="169" src="https://investorplace.com/wp-content/uploads/2023/09/machine-learning1600-300x169.png" alt="3d rendering robot learning or machine learning with education hud interface, AI training on data sets"><div>Source: Phonlamai Photo / Shutterstock.com</div></div>Docebo (NASDAQ:<a href="https://investorplace.com/stock-quotes/dcbo-stock-quote/">DCBO</a>) has an enterprise value of <a href="https://www.morningstar.com/stocks/xnas/dcbo/valuation">$1.09 billion</a>, making it the smallest of three Canadian companies. The company&rsquo;s AI-powered learning management system (LMS) is used by over <a href="https://s24.q4cdn.com/246292444/files/doc_presentation/2024/IR-Deck-May-2024-FINAL-updated-2024_05_22.pdf">3,800 corporate customers</a>. In 2023, DCBO generated over $200 million in annual recurring revenue (ARR), growing its ARR by 24%.&nbsp;&nbsp;



Founded in 2005, its customer base includes well-known brands such Thomson Reuters, Lululemon Athletica (NASDAQ:<a href="https://investorplace.com/stock-quotes/lulu-stock-quote/">LULU</a>) and Netflix (NASDAQ:<a href="https://investorplace.com/stock-quotes/nflx-stock-quote/">NFLX</a>). The average contract value has grown from $12,000 in 2017 to $52,000 in 2024.



Docebo follows the <a href="https://www.wallstreetprep.com/knowledge/rule-of-40/">&ldquo;Rule of 40&rdquo;</a> which is defined as year-over-year (YOY) revenue growth plus EBITDA margin is 40 or greater. In 2023, it had revenue of <a href="https://s24.q4cdn.com/246292444/files/doc_financials/2023/q4/Docebo_Q4-2023-PR.pdf">$180.8 million</a>, 27% higher than 2022. Meanwhile, its EBITDA margin was 9.0%, for a total of 36, just shy of 40. In Q1 of fiscal year 2024, these two numbers came to 38.5, 150 basis points from becoming a Rule of 40 company.&nbsp;&nbsp;&nbsp;&nbsp;



On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com <a href="https://investorplace.com/corporate/investorplace-publishing-guidelines/">Publishing Guidelines</a>.



On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
<div>Will Ashworth has written about investments full-time since 2008. Publications where he&rsquo;s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.</div><h3>More From InvestorPlace</h3>
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The post <a href="https://investorplace.com/2024/07/ma-watch-3-canadian-companies-that-should-be-on-american-firms-buy-lists/">M&amp;A Watch: 3 Canadian Companies That Should Be on American Firms&#8217; Buy Lists</a> appeared first on <a href="https://investorplace.com">InvestorPlace</a>.

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