Canada’s Cashed up Tech Stocks
Category TWO: Market Cap between $200 million and $1 billion
1. QLT Inc. (TSX:QLT) 66.5%
Market Cap: $367.6 million
Cash and Short Term Investments: $244.63 million
Vancouver’s QLT has seen its share of highs and lows. Founded in 1981 as Quadra Logic Technologies, the company went public in 1986 at $2.50 per share. In 2000, the year QLT received FDA approval for Visudyne, a macular degeneration treatment, shares of QLT soared to over $100 a share. But things came crashing back to earth after Visudyne brought in less revenue than anticipated.
Shares of QLT fell to just over the $2 mark in 2009 but have rebounded to more than triple that since. Today Visudyne, which is marketed by Swiss giant Novartis, has been used in more than two million treatments worldwide and is commercially available in more than 80 countries, but the treatment still managed to be a drag on the company; in the fourth quarter of 2010, Visudyne sales fell nearly 4 per cent to (US) $24.5-million.
2. Dragonwave (TSX:DWI) 43.6%
Market Cap: $218 million
Cash and Short Term Investments: $94.98 million
DragonWave’s incredible run of 2009, in which the company went from trading under a dollar on the Canadian Venture exchange to a full NASDAQ listing and share price over (US) $13, was interrupted when Q4 2010 data revealed that 87% of the Ottawa company’s revenue was derived from one customer; Clearwire. DragonWave provides wireless microwave transmission systems for internet protocol networks. These products that enable the rollout of broadband voice, video and data.
Many analysts believe that as large carriers like AT&T and Verizon roll out into suburban and rural areas, where microwave equipment has natural advantages over fiber, companies like DragonWave will be natural benefactors. The fortunes of Clearwire are clearly a big deal to DragonWave, and the company has stated one of its goals is to reduce its dependence on its largest customer. But between fiscal 2010 and fiscal 2011 Revenue decreased by $40.0 million. Shares of the Ottawa based company, which had hit a high near $14 in the first few days of 2010 cooled off to recent levels of near $6 since.
3. Boralex (TSX:BLX) 39.7%
Market Cap: $330.4 Million
Cash and Short Term Investments: $131.27 Million
Quebec based independent power producer Boralex has been a model of consistency. The company, which made its name building hydroelectric power stations, has seen its revenue grow steadily, from $163 million in 2007 to over $200 million in 2010. But clearly this isn’t good enough for the company’s President and CEO Patrick Lemaire, who recently initiated an aggressive expansion strategy into wind power. The result? The company recently reported Q1 2011 that showed a nearly thirty million dollar leap in revenues to $82 million from Q1 2010’s $51 million.
4. Sandvine (TSX:SVC) 34.6%
Market Cap: $260.2 Million
Cash and Short Term Investments: $90.02 million
Usage based billing, bandwidth throttling, a pay per use internet. Sandvine’s business can described with a host of hot button terms. Or it could be described with just one: Netflix. The growth of Netflix is bringing debate about bandwidth management to a head. On May 17th, Sandvine released a report showing that Netflix now accounts for 29.7% of all downstream traffic during peak period. Waterloo’s Sandvine sells technology that gives service providers a window into the world of their chaotic traffic. Many investors believe Sandvine may be able to help US service providers avoid the worst scenarios, or at least curtail the problem until more capacity becomes available. Cantech Letter talks to this month’s man on the cover, Sandvine President and CEO Dave Caputo.
5. Sierra Wireless (TSX:SW) 32.3%
Market Cap: $343.4
Cash and Short Term Investments: $110.76 million
Last September, Vancouver’s Sierra Wireless announced it was cutting sixty jobs and reorganizing into three distinct business units, each with its own dedicated sales, marketing, and research and development personnel. Since its halcyon days before the dot-com bubble burst, it’s been a long bumpy ride for Sierra Wireless, which builds and markets wireless modems and machine to machine devices. But the company appears to be gaining real traction, revenue has risen from $221 million in fiscal 2006 to $650 million in fiscal 2010.
CLICK HERE for PART THREE of this article, in which we count down the Top 10 Cashed up Canadian Techs with a Market Cap Less Than $200 million, but more than $10 million.