At the 2014 Cantech Investment Conference, Paradigm‘s Barry Richards predicted 2014 would be the year that the sector rotation that pumped up the prices of small and mid cap stocks would trickle down to smallcaps.
While returns overall are mixed, anyone holding the ten stocks below would heartily agree with Richards’ assessment. The Venture Exchange stocks that performed best are, in general, a reflection of quality. While these are clearly junior opportunities, many of the top performers in the TSX Venture tech index in 2014 had not just a sexy idea, but meaningful revenue, and in some cases, were already posting a profit.
This list comes with a few caveats. We removed any stock that was not presently priced at more than ten cents. We also removed any stock that had no history of revenue. This meant leaving out Graphene 3D Labs (Graphene 3D Labs Stock Quote, Chart, News: TSXV:GGG), which was up a whopping 3214%, Hombre Capital (Hombre Capital Stock Quote, Chart, News: TSXV:HOM), which was up 500%, and Vogogo (Vogogo Stock Quote, Chart, News: TSXV:VGO), which rose 480%.
We also excluded any stock that had not been trading for more than six months, excluding the likes of ARHT Media (ARHT Media Stock Quote, Chart, News: TSXV:ART) and Contagious Gaming (Contagious Gaming Stock Quote, Chart, News: TSXV:CNS).
To the list…
1. RenoWorks Software (RenoWorks Software Stock Quote, Chart, News: TSXV:RW)
Price on December 31st, 2013: $.03
Price on December 5th, 2014: $.30
Percentage Change: +900%
Calgary-based RenoWorks, which builds digital visualization software for the renovation and new home construction industry, is small but usually profitable. In the company’s recently reported Q3, it earned $88,415 on revenue of $505,047. Still, RenoWorks basically trades by appointment, and its stock suffers long stretches of inactivity.
2. EXO U (EXO U Stock Quote, Chart, News: TSXV:EXO)
Price on December 31st, 2013: $0.80
Price on December 5th, 2014: $3.10
Percentage Change: +287.5%
Mackie Research Capital analyst Nikhil Thadani says he expects enterprise mobility player EXO U will be signing recurring revenue contracts in the near future, setting the table for growth. “EXO U’s flexible software solution, strong focus on educational & enterprise segments, robust management team aided by an able and well-credentialed Board of Directors & Advisors, channel partner strategy, strong balance sheet and initial educational segment revenue traction set the company up well for executing a rapid revenue build-out in 2015 and 2016,” said Thadani.
3. DXStorm.com (DXStorm.com Stock Quote, Chart, News: TSXV:DXX)
Price on December 31st, 2013: $0.04
Price on December 5th, 2014: $0.15
Percentage Change: +275%
Oakville-based medical software hopeful DXStorm.com is another small but profitable concern. The company’s most recent quarter was its best-ever, posting net income of $1.8-million on revenue of just $2.59-million.
4. Snipp Interactive (Snipp Interactive Stock Quote, Chart, News: TSXV:SPN)
Price on December 31st, 2013: $0.13
Price on December 5th, 2014: $0.46
Percentage Change: +253.8%
Snipp Interactive tags to turn mobile ads into rich media experiences that can instantly connect brands to users, before the users lose interest or forget to Google the product when they get to their desktop. In its third quarter results, posted November 17th, the company grew its revenue by 252% year-over-year to $796,194. CEO Atul Sabharwal was looking forward. “We are very pleased with our Q3 performance and look forward to sharing our full 2014 fiscal year results. The company is extremely well poised to take advantage of growth opportunities on multiple fronts, and we expect to end the 2014 fiscal year with 150-per-cent-plus organic growth in revenue in comparison to the 70-per-cent growth that was achieved in the last fiscal year.
5. Quorum Information Technologies (Quorum Information Technologies Stock Quote, Chart, News: TSXV:QIS)
Price on December 31st, 2013: $.085
Price on December 5th, 2014: $0.215
Percentage Change: +147.1%
Calgary-based Quorum, which develops software for the automotive retail business, supplies it core product, XSellerator, to the likes of Kia, GM, Chrysler, Hyundai, Kia, and Nissan. In the company’s Q3, reported November 17th, Quorum earned $185,086 on revenue of $2,242,000. CEO Maury Marks explained that the company’s expansion plans include keeping its customers happy. “Customer satisfaction index (CSI) — our monthly support centre CSI survey reported an average of over 95 per cent ‘very satisfied’ with the service received from our support team,” he noted.
6. Apivio Systems (Apivio Systems Stock Quote, Chart, News: TSXV:APV)
Price on December 31st, 2013: $0.16
Price on December 5th, 2014: $0.36
Percentage Change: +125%
When Rob Bakshi sold Vancouver-based CCTV firm Silent Witness to Honeywell in 2003 for $90-million, he was just 44 years old. Today, Apivio is Bakshi’s round two. Apivio, which is looking to transition from the hardware segment of the VOIP business to a more lucrative role as a software provider, grew its revenue by 43.3% to $11.07-million in its recently reported third quarter.
7. ProntoForms Corp (ProntoForms Corp Stock Quote, Chart, News: TSXV:PFM)
Price on December 31st, 2013: $0.20
Price on December 5th, 2014: $0.40
Percentage Change: +100%
ProntoForms’ third quarter results provided more evidence of the traction that the company is gaining in the potentially lucrative mobile forms market, says Paradigm Capital analyst Gabriel Leung. “Our Buy thesis,” says Leung, “is predicated on our positive view of the company’s near-term growth prospects given the high ROI and stickiness associated with its SaaS-based mobile forms solution, the low rate of market adoption, its strong channel partnership with leading mobile carriers, along with the desirability of the company’s customer base and platform as a potential takeout candidate.”
8. POET Technologies (POET Technologies Stock Quote, Chart, News: TSXV:PTK)
Price on December 31st, 2013: $0.52
Price on December 5th, 2014: $1.30
Percentage Change: +97.5%
Founded in 2000, Toronto-based POET Technologies, formerly known as OPEL Technologies, shed its solar business in 2012 to focus on its core asset, a semiconductor fabrication process called POET. POET, an acronym for Planar Opto Electronic Technology, is technology management says can deliver semiconductor operating frequencies of up to 100 gigahertz and lower heat losses with greater reliability and a lower total system cost. The company currently owns 34 patents and has seven more pending. POET Technologies has had remarkable run, climbing from pennies late last year. But one insider clearly believes the stock has more upside. Pinetree Capital CEO and POET insider Sheldon Inwentash has made numerous recent purchases of the stock in the open market.
9. IMPERUS Technologies (IMPERUS Technologies Stock Quote, Chart, News: TSXV:LAB)
Price on December 31st, 2013: $0.28
Price on December 5th, 2014: $0.54
Percentage Change: +92.9%
Imperus Technologies (formerly known as ISIS LAB, hence the ticker symbol) lives at the corner of social networking and mobile gaming, a potentially lucrative mix in an era of gaming deregulation. The company’s lead product is a social gaming platform called CASINA.
10. TIO Networks (TIO Networks Stock Quote, Chart, News: TSXV:TNC)
Price on December 31st, 2013:$0.52
Price on December 5th, 2014: $0.99
Percentage Change: +90.4%
It is unlikely TIO Networks will be able to continue to post 100% year-over-year revenue growth it posted in its recently reported Q4, but the stock remains undervalued, says PI analyst Pardeep Sangha. The analyst expects TIO’s revenue will grow to $72-million in fiscal 2015 and then to $75-million the following year. He thinks the company’s gross margins will increase to 33% in 2015 and to 39% in 2016.