Cantech Letter Model Portfolio Update, June 2011

Today, we provide a mid-year update to the Cantech Letter Model Portfolio. This list is a collection of Canadian technology stocks that rank exceptionally highly in our own Quant Snapshots feature. You’ve seen Quant Snapshots dotted throughout the site. They rank companies in five key metrics; price to sales, cash to market cap, debt to market cap, three year growth and enterprise value to sales.

The Cantech Letter Model Portfolio began on September 26th, 2008 and, as it turned out, made a rather inauspicious debut. Our first entry, Intrinysc Software (TSX:ICS) has hovered anywhere between a 30% and 75% loss. Fortunately, a few highlights have redeemed our belief in value and in technology. We added Aastra Technologies (TSX:AAH) to the portfolio on November 24th, 2008 at $8.75. We then removed it months later, June 4, 2009 when it hit $30.58, locking in a +242% for the Model Portfolio. Another stock, Matrikon (TSX:MTK) was sold to Honeywell in 2009 for $4.50, representing a 114% gain over the price we added it to our list, $2.10.We are now in Year Three of the Cantech Letter Model Portfolio.

Now, about the average annualized return. As of June 20th, 2011, Average Annual Return of Cantech Letter Model Portfolio stands at 11.9%.

The TSX as a whole, meanwhile has gained 5.25% in the same time frame.

So, how did we get here? As mentioned, The Cantech Letter Model Portfolio is now in Year Three. Year One began September 26th, 2008 and ended September 25th, 2009 and included fifteen stocks. That year was up 31.9% as worldwide markets rallied back after the financial crisis that began in the autumn of 2008. 2009 was a tougher year. The portfolio now included seventeen stocks, but finished down 10.6%.

Now in Year Three of the Cantech Letter Model Portfolio things are back on the upswing. The current gain of the index sits at 14.3% Year to Date.

The first pick was September 26, 2008. So the years run like this:

Year One: September 26th, 2008-September 25th, 2009
Year Two: September 25th, 2009-September 24th, 2010
Year Three: September 24, 2010-to present

Year One: +31.9%
Year Two: -10.6%
Year Three (to date) +14.3%

Average Annual Return of Cantech Letter Model Portfolio: 11.9%

Please note, Cantech Letter’s Model Portfolio is supplied for information purposes only, and this information should not be construed as investment advice and it is not intended to solicit the buying or selling of any of the stocks mentioned. Before we move forward, this is probably a good time to bring attention to Cantech Letter’s full disclaimer – CLICK HERE – to review.

Now, let’s look at the component parts.

1. Intrinysc Software (TSX:ICS)
Original Profile date: September 26, 2008.
Price at profile date: $0.20.
Price at September 24th, 2010: $.05
Price at June 20th, 2011: $0.13
Year Three Gain/Loss: +160%

2. Carmanah Technologies (TSX:CMH)
Original Profile date: October 6, 2008
Price at profile date: $0.20.
Price at September 24th, 2010: $.75
Price at June 20th, 2011: $0.57
Year Three Gain/Loss: -24%

3. Versatile Systems (TSXV:VV)
Original Profile date: October 19th, 2008.
Price at profile date: $0.11.
Price at September 24th, 2010: $.085
Price at June 20th, 2011: $ .09
Year Three Gain/Loss +5.5%

4. Jemtec (TSXV:JTC)
Original Profile date: October 15th, 2008.
Price at profile date: $0.81
Price at September 24th, 2010: $.74
Price at June 20th, 2011: $ .70
Year Three Gain/Loss -5.4%

5. Tecsys (TSX:TCS)
Original Profile date: October 27th, 2008.
Price at profile date: $1.20.
Price at September 24th, 2010: $1.88
Price at June 20th, 2011: $2.14
Year Three Gain/Loss +13.8%

6. Sierra Wireless (TSX:SW)
Original Profile date: November 10th, 2008.
Price at profile date: $9.50
Price at September 24th, 2010: $10.59
Price at June 20th, 2011: $11.50
Year Three Gain/Loss +8.6%

7. Chartwell Technologies (TSX:CWH)
Original Profile date: November 17th, 2008
Price at profile date: $1.55
Price at September 24th, 2010: $.75
Price at June 20th, 2011: $1.14
Year Three Gain/Loss +52%

8. Serenic Corp (TSXV:SER)
Original Profile date: December 1st, 2008
Price at profile date: $0.245
Price at September 24th, 2010: $.40
Price at June 20th, 2011: $.20
Year Three Gain/Loss -50%

9. Glentel Inc (TSX:GLN)
Original Profile date: January 5, 2009
Price at profile date: $8.75
Price at September 24th, 2010: $19.41
Price at June 20th, 2011: $34.82 (adjusted for a 2:1 stock split May 9th)
Year Three Gain/Loss +79.4%

10. Miranda Technologies (TSX:MT)
Original Profile date: January 19, 2009
Price at profile date: $6.99
Price at September 24th, 2010: $4.76
Price at June 20th, 2011: $7.14
Year Three Gain/Loss +50%

11. RDM Corp (TSX:RC)
Original Profile date: February 2, 2009
Price at profile date: $0.75
Price at September 24th, 2010: $.92
Price at June 20th, 2011: $.97
Year Three Gain/Loss +5.2%

12. Hemisphere GPS (TSX:HEM)
Original Profile date: May 8, 2009
Price at profile date: $1.22
Price at September 24th, 2010: $.74
Price at June 20th, 2011: $1.10
Year Three Gain/Loss +48.6%

13. International Datacasting (TSX:IDC)
Original Profile date: August 28, 2009
Price at profile date: $0.265
Price at September 24th, 2010: $.0.285
Price at June 20th, 2011: $.405
Year Three Gain/Loss +42.1%

14. Biorem (TSX:BRM)
Original Profile date: February 4th, 2010
Price at profile date: $0.68.
Price at September 24th, 2010: $0.48
Price at June 20th, 2011: $.495
Year Three Gain/Loss -21.9%

15. International Road Dynamics (TSX:IRD)
Original Profile date: February 26th, 2010
Price at profile date: $.87
Price at September 24th, 2010: $0.63
Price at June 20th, 2011: $.445
Year Three Gain/Loss -29.3%

16. Cyberplex (TSX:CX)
Original Profile date: July 16, 2010
Price at profile date: $.63
Price at September 24th, 2010: $0.46
Price at June 20 2011: $.105
Year Three Gain/Loss -77.2%

17. Sangoma (TSXV:STC)
Original Profile Date: January 14th, 2011
Price at profile date .50.
Price at June 20th, 2011: $.43
Year Three Gain/Loss -14%

Disclaimer: Cantech Letter’s Model Portfolio is supplied for information purposes only. Cantech Communications makes all reasonable attempts to ensure the timeliness and accuracy of the information provided in our website. However, there are no representation or warranties as to the accuracy, reliability, completeness or timeliness of such information. This information should not be construed as investment advice and is not intended to solicit the buying or selling of any stocks mentioned. Investors should complete their own due diligence before making any investment decisions. From time to time Cantech Letter may profile our client companies or companies we have personally invested in. In these cases we will expressly disclose this relationship.

Disclosure: at publication date Cantech Letter Editor Nick Waddell owns shares of Serenic (TSXV:SER) and International Datacasting (TSX:IDC). Cantech Communications also supplies corporate communications services to Serenic.

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