A sign of the times? Maybe. On Friday, for the first time in recent history, the three top volume traders on the TSXV Exchange were all technology issues.
Intertainment Media (TSXV:INT), SelectCore (TSXV:SCG) and Fireswirl Technologies (TSXV:FSW) bested the volume of any commodity stock Friday. All three have had strong recent runs punctuated by large spikes in volume.
Shares of Fireswirl, which makes branded e-commerce platforms for mobile devices in China, came back from the dead late last year after the company’s Q3 2010 revenue spiked to $4,743,827, an increase of more than five thousand per cent. Fireswirl shares could be had for as little as three and a half cents last October, but closed at $.32 cents on Friday.
The roots of Vaughan, Ontario’s Selectcore, which was established in 1999, are in selling prepaid telecom to an established network of retail convenience and grocery store locations. Selectcore has grown its revenue from $37 million in fiscal 2006 to over $103 million in 2010. But shares of the company more than tripled in just five sessions earlier this month, after the company received approval for its Iridium brand MasterCard from the United States Patent and Trademark Office. The move will allow Selectcore to enter the prepaid credit card market, a space that an independent research report commissioned by MasterCard estimates will surpass $440 billion by 2017, which is more than four times its estimated 2009 value of $120.2 billion.
Friday’s action was nothing new for Intertainment Media, which is the top trader of the TSX Venture Exchange this year. Intertainment has risen as high as a half-a-billion dollar market capitalization on the back of Ortsbo, software that translates, in real time, more than fifty different languages across a dozen social media platforms. On the last day of 2010, shares of Intertainment could be had for a dime. In 2011, Intertainment shareholders have enjoyed a stunning run; the company’s stock closed as high as $2.25 on April 19th, before settling back to Friday’s close of $1.28.
So what’s going on here? Part of the explanation is a recent global commodities slump. The TSX, the more senior sibling to the Venture Exchange, lists 55% of the world’s public mining companies. The TSX has fallen more than 4% so far in May.
But others say Friday’s action may be a sign many investors are looking to take some commodities gains off the table and put them to work elsewhere.
“Investors have not placed much emphasis on the software and services sector in recent years and we believe it is time to change that stance,” said Tom Liston, technology analyst with Versant Partners. Liston added: “We generally see a larger opportunity in the smaller cap names as the group has lagged the recent price moves in the larger cap group.”
Liston believes a a recent flurry of M&A activity, globally, means the technology sector is set to move higher.