The innovation sectors have carried the mail on the TSX for a couple years now. Stocks like Avigilon, Amaya Gaming, Tekmira and Dirtt Environmental Solutions seem to have replaced long forgotten mining and metals names in the imagination of Canadian investors.
“Some of the world’s most exciting technology and innovation companies are being founded, built, and funded in Canada—and investors from around the world are taking notice. said Michael Kousaie, Head, Business Development (Technology) at TSX and TSXV in a recent article. “These investors, though, aren’t just venture capitalists. As companies with an impressive depth of talent and dynamism turn to public markets to help them achieve their growth plans, demand is growing among public investors seeking to diversify their investments beyond typically dominant sectors such as mining and oil.”
So have new investors missed the boat on the innovation sectors? Maybe not. These analysts think these five stocks still have triple-digit upside. We rank them according to their implied return as of last Friday, August 22nd.
1. Revive Therapeutics (TSXV:RVV) 344%
By finding new uses for existing drugs, Revive Therapeutics is well positioned in a pharmaceutical industry that is facing a “significant patent cliff”, says Beacon Securities analyst Doug Cooper. In a research report to clients in mid-July, Cooper initiated coverage of Revive Therapeutics with a “Buy” rating and a one-year price target of $2.00. Shares of Revive have risen since, but Cooper’s target still implied a return of 203% as of last Friday.
2. Urthecast (TSX:UR) 316.7%
The selloff that came after Urthecast announced its high-res camera on the International Space Station would be delayed is a buying opportunity for investors with a longer time frame, says Clarus analyst Eyal Ofir. “The knee-jerk reaction in the share price to the HRC delay is short sighted and presents another buying opportunity for patient investors that are willing to take on the inherent volatility,” he said. In a research report to clients in mid-July, Ofir maintained his “Speculative Buy” rating and $5.50 one-year target, a target that implied a return of 333% as of last Friday.
3. Antibe Therapeutics (TSXV:ATE) 160%
Sales of non-steroidal anti-inflammatory drugs (NSAIDs) topped $12-billion in 2010, led by household names such as Pfizer’s arthritis treatment Celebrex and Novartis’s Voltaren, which addresses much of the same market. Tiny Antibe Therapeutics may be set to shake up the massive NSAID market, says M Partners analyst Daniel Pearlstein. In a research report to clients on August 20th, Pearlstein initiated coverage of Antibe with a “Buy” rating and a one-year target of $1.30. The stock closed Friday at $0.50, meaning Pearlstein’s target still implies upside of 160%.
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4. CriticalControl Solutions (TSX:CCZ) 117%
New product launches and an expansion in the U.S have Industrial Alliance analyst Steve Li feeling bullish about CriticalControl Solutions. The analyst says he is encouraged by the results and by the fact that management expects the launch of its new NetFlow product will have a shorter sales cycle than previous offerings. That, combined with the company’s expressed interest in expanding expanding geographically into the U.S. could increase the market opportunity for current products such as as ProChart and ProTrend, he says. On August 13th, Li reiterated his “Speculative Buy” recommendation and one-year target of $1.00 on CriticalControl Solutions, a target that implied a return of 117% as of last Friday.
5. ViXS Systems (TSX:VXS) 117%
The 4K TV market represents “a significant opportunity” and Toronto’s ViXs Systems (TSX:VXS) is poised to grab a meaningful share of it, says Clarus Securities analyst Eyal Ofir. In a research report to clients in mid-July, Ofir launched coverage of ViXS with a “Buy” rating and a one-year price target of $3.30, implying a return of 117% as of last Friday.
Disclaimer: Revive Therapeutics is an annual sponsor of Cantech Letter.