In 2015, Shopify grabbed every headline for an IPO we argued would become a historic demarcation point in the sector rotation to technology in Canada.
For the rest of the TSX tech constituents, it was another strong year, on the whole. The S&P/TSX Capped Information Technology Index, a collection of stocks such as BlackBerry, Avigilon, Constellation Software, and CGI Group easily outperformed the overall Canadian market.
But the bigger story is about what we don’t see. Will the presence of companies D2L, Hootsuite, BuildDirect, Aeryon Labs, and Cymax breathe fresh life into a Canadian tech resurgence that is entering its second, third, or fourth year, depending on who you ask? One thing is for sure; with December days winding down will have to wait to at least 2016 to see.
We count down the ten best performing TSX tech stocks in 2015.
1. Intermap (TSX:IMP) +330.7%
Price on December 31, 2014: $0.065
Price on December 18, 2015: $.28
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 Group (TSX:FTG) +167.4%
Price on December 31, 2014: $0.85
Price on December 18, 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. Kinaxis (TSX:KXS) +144.9%
Price on December 31, 2014: $18.50
Price on December 18, 2015: $45.31
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 late October, Kinaxis reported Q3, 2015 results that saw the company earn (U.S.) $3.8-million on revenue of $23.7-million, up 34% over the same period last year. Laurentian Bank Securities analyst Nick Agostino said the results bested his expectations.
4. Enghouse Systems (TSX:ESL) +82.2%
Price on December 31, 2014: $41.49
Price on December 18, 2015: $75.60
Enghouse Systems’s remarkable run has been powered by acquisitions, often international in scope and executed at what prove to be bargain basement prices. On December 16, the company announced 2015 results that saw it earn $31.43-million on revenue of $279.3-million, a topline that was up 27 per cent over fiscal 2014.
5. International Road Dynamics (TSX:IRD) +77%
Price on December 31, 2014: $0.74
Price on December 18, 2015: $1.31
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.”
6. D-Box Technologies (TSX:DBO) +73.6%
Price on December 31, 2014: $.19
Price on December 18, 2015: $.33
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.
7. Constellation Software (TSX:CSU) +69.2%
Price on December 31, 2014: $345.44
Price on December 18, 2015: $584.58
In early February, portfolio manager Jason Donville said Constellation Software would prove those who think the stock might end its meteoric rise this year wrong. “My guess is that by the end of the year they will have beaten the current year’s estimates by a good ten to fifteen per cent,” said Donville, who noted that the analyst consensus on Constellation is was a “Hold”. Doville was right: Constellation proved the consensus wrong and then some.
8. Descartes Systems Group (TSX:DSG) +59%
Price on December 31, 2014: $17.25
Price on December 18, 2015: $27.58
Shares of Descartes Systems Group are way up in 2015, but Industrial Alliance Securities analyst Blair Abernethy thinks the stock has room to grow. Abernethy says there are several tailwinds supporting Descartes right now, including government regulations, logistics and machine-to-machine technology, and macro trends in international trade. The analyst says investors should watch the stock closely in order to take advantage of any pullbacks that may result from general market malaise.
9. Shopify (TSX:SH) +57.7%
Price on IPO Date, 2014: $22.41
Price on December 18, 2015: $35.35
In June, Ottawa’s Shopify got its first taste of trouble as a pubco, falling more than 15 per cent in two days. Since then, the stock has been surprisingly volatile. Shopify soared on a deal with Amazon in September, but has trailed off in the months since.
10. Com Dev (TSX:CDV) +50.3%
Price on December 31, 2014: $3.99
Price on December 18, 2015: $6.00
In November, Com Dev announced it would sell itself to Honeywell International for a cash consideration of up to $5.25 per common share, representing an enterprise value of approximately $455-million. Investors will get the cash plus 0.1977 of a share of Com Dev data services subsidiary exactEarth, for an aggregate implied transaction value of up to $6.54 for each Com Dev share. The Cambridge-based company also announced that exactEarth will be spun out as a publicly traded company. The deal isn’t a slam dunk for the Canadian company’s shareholders, but it does have potential upside for them, says Paradigm Capital analyst Daniel Kim.
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