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 large and mid cap tech stocks would trickle down to smallcaps.
While returns overall are mixed, the techs certainly outperformed their mining and metals counterparts. 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.
Here, in alphabetical order, are the three stocks our judges, an anonymous poll of sell-side analysts, thought were the three best candidates for 2014 Cantech Letter TSX Venture Tech Stock of the Year. You can vote for your favourite at the bottom of the page. The winner will be presented the award at the Cantech Letter Awards Gala Dinner, (brought to you by Difference Capital and Wildeboer Dellelce) which follows the Cantech Investment Conference, January 15th at the Toronto Convention Centre.
Apivio Systems (TSXV:APV)
The encore. What happens when you are successful enough to have sold your company for a truckload of cash but too young to retire? When Rob Bakshi sold Vancouver-based CCTV firm Silent Witness to Honeywell in 2003 for $90-million, he was just 44 years old. For Bakshi, who made his way from rural India when he was just 13 and worked a series of grinding jobs to establish his family in Canada, laying on a beach or putting around on a golf course simply didn’t fit his personality profile. The inevitable offers to take a board position or consult came along, but Bakshi knew he had a sequel in him. That opportunity came along in the form of Moimstone, a company he was introduced to in 2009. Bakshi an opportunity in the company, which has since changed its name to Apivio Systems, to transition from the hardware segment of the VOIP business to a more lucrative role as a software provider.
Calgary-based Sylogist, an enterprise application software company, rose in 2014 on the back of acquisitions. In July, the company acquired fellow-Alberta tech Serenic for $8.1-million. “The financial value of this acquisition is compelling, while the strategic value provides product affinities with other Sylogist’ portfolio companies and a global growth platform,” said CEO Jim Wilson.
TIO Networks (TSXV:TNC)
In a research update to clients following the company’s better-than-expected fourth quarter results recently, PI analyst Pardeep Sangha said it is unlikely TIO Networks would be able to continue to post 100% year-over-year revenue growth, but the analyst said he believes the stock remains undervalued. “We had a truly superb quarter and year driven by significant organic and inorganic growth,” said CEO Hamed Shahbazi. “Fiscal 2014 was a year marked by the successful execution of large-scale and meaningful initiatives that have positioned Tio for further growth. Going forward, we are confident about our growth prospects in fiscal 2015, which will include a full years contribution of both Globex and ChargeSmart revenue — we have never been stronger. We continue to focus on opportunistic acquisition and growth opportunities.”
Disclosure: Apivio Systems is an annual sponsor of Cantech Letter.