There was a theme running through last week’s top tech performers on the TSX, and that theme was change. From a dramatic ousting of the entire board at Bennett Environmental (TSX:BEV) to the turnaround at Ottawa’s International Datacasting (TSX:IDC), management changes appear to be unlocking dormant value in some Canadian techs. We countdown the top tech performers on the TSX for the week of July 11th-15th. All stocks in the TSX Technology, Cleantech and Life Sciences indices are part of the survey, excepting those that began the week at less than $.10 cents.
1. Afexa Life Sciences Inc (TSX:FXA) +26.0%
Price on July 8th: $.365
Price on July 15th: $.46
Edmonton based Afexa, which is best known for its COLD-FX product, has had a tough go of things of late. Investors clearly don’t like the uncertainty around the company’s management situation. Jack Moffatt, the man who steered the company since a 2008 shakeup, will not be back and the company has not yet found a replacement. In March of this year Afexa traded as high as $.60 cents, but fell to nearly half that by June, when it announced its fiscal 2011 revenue was just $39.6 million, down from $56.1 million in 2010. But things aren’t all bad for Afexa. The company recently received positive word from a clinical trial on its CVT-E002. The trial, conducted at the Wake Forest Baptist Medical Centre in Winston-Salem, N.C., showed the treatment reduced the incidence and severity of acute respiratory infections for patients with chronic lymphocytic leukemia.
2. Intertape Polymer Group (TSX:ITP) +25.4%
Price on July 8th: $1.89
Price on July 15th: $2.37
Intertape Polymer, which has been around since the early 1980’s, grew rapidly through acquisition in the 90’s. The company now does in excess of $700 million in annual revenues, selling specialty tapes, stretch wrap and shrink films. Trouble is, Intertape’s stocks chart has looked like a ski hill for much of the past decade, as it was posting some hefty losses. The company was clearly feeling the effects of competing with a giant like 3M in an inherently low-margin business. But Intertape nearly broke even in its recently reported Q1 2011, a phenomenon management credits with a recent move into range of new higher margin products.
3. International Datacasting Corporation (TSX:IDC) +14.5%,
Price on July 8th: $.38
Price on July 15th: $.435
The turnaround continues at International Datacasting. When a new team, lead by former Lietch exec Fred Godard and Toronto banker Adam Adamou, took over the Kanata based provider of satellite equipment products the company was spinning its tires. But fiscal 2011 was International Datacasting’s best year ever. The topline number, $34.4 million, was a 48% increase from the year before. CLICK HERE for Cantech Letter’s recent interview with Adamou and Godard.
4. Redline Communications Group Inc. (TSX:RDL) +10.7%
Price on July 8th: $.56
Price on July 15th: $.62
Markham’s Redline, which sells specialized wireless products to service providers, had been living under the shadow of a class action suit that was filed by Siskinds LLP. The suit, which was filed last autumn and settled recently, said the company had misrepresented its financial statements going back to 2006. While Redline did not disclose the settlement amount, the matter is effectively closed and investors can concentrate on the company’s prospects, which look increasingly rosy. Despite a year that management described as one of “significant restructuring” the company managed to post revenue of $54.4-million, an increase of 43 per cent over the $38.0-million reported in 2009. The trend continued into their recently reported Q1, 2011, which was also up.
5. Bennett Environmental Inc. (TSX:BEV) +9.5%
Price on July 8th: $ 2.22
Price on July 15th: $ 2.43
A recent major shakeup at Oakville’s Bennett is starting to ripple through the company’s stock in a positive way. Late last month, a dissident shareholder group, led by Vancouver’s Second City Capital Partners, succeeded in removing the company’s board and CEO. But outside of its legal issues, Bennett Environmental is a bit of a turn-around story. In early 2004, shares of the company, which uses thermal oxidation technology to remediate contaminated soil and contaminated construction debris, were going for more than $27. However its legal troubles with shareholders, which actually began around that time, weighed heavily on the company. The stock fell to pennies in late 2008 and languished until late 2009, when it was clear that Bennett’s fiscal health was rapidly improving; revenues grew from under $11 million in 2006 to over $28 million in 2009, and topped $32 million in 2010. The new board will no doubt seek ways to unlock value from the company balance sheet, which boasts $65 million in cash.
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