Late in 2012, Research in Motion still grabs most every tech headline here in Canada, but the names it overshadows are starting to make a real impact, says one of Canada’s top ranked tech analysts.
Cantor Fitzgerald’s Director of Canadian Research Tom Liston was on BNN’s Business Day with host Marty Cej last week to talk about his favourite names for the upcoming year.
Liston says that after an unprecedented dry stretch, 2012 was the year we finally started to see more investment in technology. He says some names are simply so outstanding, they are demanding attention.
The Cantor analyst says that for five years now, his top picks have been the same two stocks, Descartes Systems Group (TSX:DSG) and Catamaran Corp. (TSX:CCT). Both stocks have had steady upward movements the entire time, and Liston thinks that will continue in 2013.
Catamaran’s rise has been nothing short of spectacular. The company, which raised few eyebrows when it went public in 1997 through an RTO, took home top spot in Fortune Magazine’s 2011 100 fastest-growing companies list. The company recently posted quarterly revenue of $3.2 billion. Liston, who was among the first analysts to cover Catamaran, says he still sees 30% upside in the stock.
Descartes Systems, says Liston, is a company that simply gets better with age. That’s because the Art Mesher led company, he says, delivers high returns on investment for its clients in any business environment. This has led to a string of impressive client wins and 32 consecutive quarters of EBITDA improvement. Liston has a TOP PICK and $11 target on Descartes.
Avigilon (TSX:AVO) is a company Liston added this past summer. He said a strong run in the company’s shares might make it look expensive to some, but that must be framed in the context of its strong double-digit growth, which may end up making current prices look cheap.
Another company Liston has added recently is Redline Communications (TSX:RDL). He says CEO Eric Melka has rescued the company from the brink of disaster and is now winning business because its offerings are differentiated from its competitors. Liston has a BUY rating and $7.50 target on Redline.