Tax loss season. Parting is a sweet sorrow, but December is the time of year when we the Canadian government makes it easier to say goodbye to those who have brought us more grief than gratification.
To those looking for bargains, there are actually two peaks to the tax loss selling season. The first actually occurs in October, which is the year end for many hedge funds. The second begins right about now, and is generally more comprised of retail investors dusting their dogs.
Are there gems in December’s 52-week low bargain bin? We check out the stories of the Canadian tech stocks that hit bottom as of Friday, December 2nd.
1. Biorem (TSX:BRM)
2011 is a year Biorem shareholders would rather forget. The stock, which began the year at $.50 cents didn’t experience any particular jolt to bring it to Friday $.16 cent close, but a steady diet of uncertainty around shuffling management and continued losses (the company lost $1.65 million in its recently reported Q3) chipped away at the share price. Shareholders now find Biorem, which sells biofiltration systems that control air emissions in a variety of industrial applications, trading at a market cap of less than $2 million, while revenue from the three quarters the company has reported in 2011 totaled nearly $8.6 million.
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2. Cantronic Systems (TSXV:CTS)
Infrared thermal imaging. Night vision. Thermal tactical binoculars. Cantronic’s product list reads like the tools at the disposal of James Bond, but the Coquitlam, BC based company isn’t trying to stop Goldfinger from robbing Fort Knox. Instead, Cantronic’s technology solutions are being used, increasingly, to solve real world problems. The Company’s FeverScan M3000D dual-vision thermal imaging camera system, for instance, has been installed in various airports and key locations in Greece and Iraq for swine flu screening. 2011 was all about moving into China for the persistently profitable Cantronic; the company recently won a $2.6 million contract to to further the expansion of the citywide networked video surveillance system in to Kaili, a city in China’s Guizhou province.
3. Reg Technologies (TSXV:RRE)
A better mousetrap. While British Columbia cleantech peer Westport Innovations has garnered worldwide attention as a leader in developing natural gas engines, Richmond, BC’s Reg Technologies has worked in its shadow developing a better internal combustion engine. Reg says its RadMax™ rotary technology makes a more lightweight, vibration free unit with fewer than fifty parts. The result, says management, is a cleaner, more fuel efficient engine. Reg spent 2011 working up prototype of the engine, moving from engineering drawings to 3D cad model, to the beginnings of a prototype. But no marketable product equals no revenue (the company lost $145,292 for the three months ended July 31, 2011,) and investors have focused on that negative of late, sending shares of the company to $.11 cents Friday.
4. Smartcool (TSXV:SSC)
Energy efficiency has come a long way in a short time. A typical refrigerator built in 1986 uses 1,500 kWh and costs $120 – $150 per year to run. A refrigerator built today would use approximately one third less energy. Newer light bulbs use three-fourths less energy and produce the same amount of light as incandescent light bulbs. Vancouver based SmartCool Systems (TSXV:SSC) is a company trying to bring these kind of efficiencies to air conditioning and refrigeration systems which, until now, had lagged behind other systems. Smartcool’s ESM™ and ECO3™ are after market products that have been verified by third parties like the Oak Ridge National Laboratory. ESM™ and ECO3™ do not affect the temperature or humidity of the controlled space, they can be manually bypassed at any time, and they have no impact on existing equipment, controllers or warranties. Smartcool’s revenue is increasing, the $4.2 million topline the company reported in 2010 was nearly four times that of 2008, but they’re still losing cash; more than a million in Q2 2011.
5. 20-20 Technologies (TSX:TWT)
As recently as 2008, Quebec’s 20-20 Technologies (TSX:TWT) was looking like a true Canadian success story. The company, which began in the 1980′s as a small Quebec cabinet manufacturer, morphed into the world’s leading provider of computer-aided design, sales software and manufacturing for the interior design industry. Revenue grew rapidly until the crisis of late 2008, when depending upon the US home sector for sales suddenly looked like a terrible gamble. Nonetheless, 20-20 battled through by cutting costs. Fiscal 2010 started to show signs that the company could indeed recover, as it earned $2.3 million on revenues of $65.2 million, which was up a few percentage points over fiscal 2009. The company has since recorded three profitable quarters in 2011.