Worldwide, it’s been a tough year for markets and Canada has provided little refuge from the pain.
The S&P TSX began the year at 14632.44 and it has taken a recent mini-rally to get it to where it closed on Friday, at 13953.66, leaving some hope that the overall market can finish in the green for the year, something that seemed unlikely mere weeks ago. Underlying Canada’s story is a faltering price of oil, continued weakness in resources in general, and a recent scandal that has ripped a hole into the specialty pharma sector.
But technology continues to be a bright spot, if not one delivering the outsized gains we saw between 2012 and 2014. The S&P/TSX Capped Information Technology Index is up nearly 7% in 2015, which has made it a more than safe haven to wait out the storm. Tech has become a bit of a stock-pickers market, but it’s one of the few places you’re as likely to find a success story as a laggard. We count down the ten best performing TSX Technology stocks so far in 2015.
1. Intermap (TSX:IMP) +700%
Price on December 31, 2014: $.065
Price on October 23, 2015: $.52
Shares of Intermap rose sharply in June on news that a consortium led by the company had been awarded a governmental letter of award for the creation, operation and maintenance of a national spatial data infrastructure (SDI) program. The program is a public-private partnership that will last for twenty years. The company said the initial two year phase is valued at more than $125-million and would begin in the third quarter of 2015.
2. Firan Technology (TSX:FTG) +170.6%
Price on December 31, 2014: $.85
Price on October 23, 2015: $2.30
Firan began its rise early in 2015 on the back of Q4, 2014 results that were cheered by the street. The positivity contined into its Q3, 2015 results which were released on October 8 and saw the company grow its topline to $18.2-million, a 23% increase over 2014’s fourth quarter. Founded in 1983, Toronto-based Firan supplies aerospace and defense electronic products, specializing in quick turn around production runs. The company’s clients include Bombardier, Rockwell Collins and Bell Helicopter.
3. Espial (TSX:ESP) +127%
Price on December 31, 2014: $1.71
Price on October 23, 2015: $3.88
In initiating coverage of Espial recently, Haywood analyst Pardeep Sangha says the company’s Tele Columbus AG contract win, announced earlier this month, was an important milestone in its history. CEO Jaison Dolvane described Tele Columbus as “the visionary force among European network operators,” and Sangha, who has a “Buy” rating one-year target price of $5.00 on the stock, believes the deal will translate into future wins.
4. Kinaxis (TSX:KXS) +113%
Price on December 31, 2014:$18.50
Price on October 23, 2015: $39.38
Ottawa-based Kinaxis lead offering is RapidResponse, a supply chain planning and analytics platform to manage multiple, interconnected supply chain management and Sales and operations planning (S&OP) processes. In a recent report to clients, Laurentian Bank Securities analyst Nick Agostino raised his target price on the stockfrom $37.50 to $46.00. The analyst believes the company will see 30% topline growth in 2017, a number that is similar to his 2016 expectation. Agostino thinks Kinaxis’s revenue will hit $117-million in 2016 and will climb to $151.1-million the following year. He thinks the company will generate EBITDA of $33.9-million in 2016 and $45.3-million in 2017.
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5. Shopify (TSX:SH) +86.2%
IPO Price: $22.41
Price on October 23, 2015: $41.73
This year’s IPO darling Shopify had a debut that was not just big for Canada, it was big for anywhere. “I’m sure that Tobi Lutke and his gang would be almost embarrassed, but Shopify (SH:TWX) is currently the best performing IPO of the last 50 that have been launched on either of the NYSE or NASDAQ,” noted Wellington’s Mark McQueen in June. “The list dates back to late April and the NASDAQ backdrop has been excellent for growth stories — nothing like hitting 15 year market highs. Of the 50 tracked by Renaissance, 14 are underwater. Of the winners, Shopify has gained the most: 105% as of today’s close. More than Fitbit (83%), more than Glaukos (73%), more than David’s Tea (20%). Speaks to what a stellar thing the folks have going on in Ottawa. Nice to see that the world has figured it out, too.”
6. Mad Catz (TSX:MCZ) +80%
Price on December 31, 2014: $.50
Price on October 23, 2015: $.90
Mad Catz, which makes peripherals for gamers, saw its share price rise despite lower Q1 revenue. But there is a silver lining: Despite a steep drop off in sales for legacy platforms, CFO Karen McGinnis noted that products for the next generation consoles saw 83% sales growth in the company’s recent fourth quarter.
7. Tucows (TSX:TC) +67.7%
Price on December 31, 2014: $22.40
Price on October 23, 2015: $37.57
Best known for its domain registration business, some more recent initiatives have Cantor Fitzgerald Canada analyst Scott Curtis feeling optimistic about the chances of Tucows to grow its business. In an August report to clients, Curtis said the acquisition of gigabit fiber provider Ting Mobile proved Tucows could operate outside of its comfort zone.
8. International Road Dynamics (TSX:IRD) +56.7%
Price on December 31, 2014: $.74
Price on October 23, 2015: $1.16
Long-ignored International Road Dynamics seems to be hitting its stride. Commenting on recent third quarter results that saw the company earn a record $1.45-million, CEO Terry Bergan said investors can expect more of the same.
“Looking ahead, we are confident growth will continue as governments and the private sector invest in ITS solutions to enhance highway and roadway infrastructure. In addition, with recent contract wins in the U.S. and other targeted markets, our backlog of confirmed orders continues to rise, and we expect further increases in the months ahead as we leverage our global presence and reputation for innovative and quality products and services.”
9. D-Box (TSX:DBO) +47.4%
Price on December 31, 2014: $.19
Price on October 23, 2015: $.28
Stephen Takacsy, chief investment officer and portfolio manager at Lester Asset Management thinks that while Quebec-based D-Box is still in its early stages, it has the potential for a “global monopoly” in its business. The fund manager notes that the company is the only one in the world that has permission from Hollywood to motion code movies. Takacy thinks the company will benefit from a U.S. rollout.
10. Enghouse Systems (TSX:ESL) +44.4%
Price on December 31, 2014: $41.49
Price on October 23, 2015: $59.93
Enghouse Systems’s remarkable run has been powered by acquisitions, often international in scope and executed at what prove to be bargain basement prices. Early the company pulled another page from that playbook. Enghouse announced it has acquired Danish mobile billing provider CDRator A/S for just over one times sales. The Markham-based company said it would pay $23-million for a concern that posted more than $20-million in revenue in fiscal 2014. On October 19, Enghouse announced its most recent acquisition, picking up CTI Group (Holdings) Inc. for $22.5-million (U.S.). That company post 2014 revenue of $18.3-million.