AcuityAds and Cortex are top Q3 tech picks at Haywood

His Q1 and Q2 picks were market beaters. Now Haywood Securities analyst Pardeep Sangha has revealed his top picks for the third quarter of 2017.

As readers of this website will know, Sangha’s picks for the first quarter of this year produced exceptional returns, with AcuityAds (AcuityAds Stock Quote, Chart, News: TSXV:AT) returning 103 per cent and Espial Group (Espial Group Stock Quote, Chart, News: TSX:ESP) 12 per cent. In the more muted second quarter, top picks Nanotech Security returned 2.4 per cent and holdover Espial returned 5.9 per cent.

For the third quarter, Sangha introduces a new top picks in Cortex Business Solutions (Cortex Business Solutions Stock Quote, Chart, News: TSXV:CBX) and brings back AcuityAds for another go. In a research update to clients today, the analyst explained why.

“We picked Acuity as our top pick because the company continues to experience exceptional growth, has successfully integrated its past two acquisitions (Visible Measures and 140Proof), is increasing its Self-Serve revenue and is expanding geographically into Europe,” explains the analyst. “We believe the 17.5 per cent decline in Acuity’s share price over the past quarter is overdone as it followed a stellar Q1 in the company’s share price increased 103 per cent.”

Sangha thinks AcuityAds, which he currently has a “Buy” rating and a one-year price target of $6.25 on, will generate EBITDA of $4.2-million on revenue of $79.0-million in fiscal 2017. He expects those numbers will improve to EBITDA of $9.8-million on a topline of $109.0-million the following year.

As for Cortex, Sangha says a sea-change is underway at the company.

“We picked Cortex as our other Q2 top pick because the company is transitioning from a turn-around story to a growth story,” he explains. “We believe Cortex is significantly undervalued. Cortext is currently trading at 2.8x EV/Revenue multiple of our CY17 estimates compared to the peer group average of 5.3x EV/Revenue multiple of CY17 estimates. Our target price is based on 3.6x EV/Revenue multiple of our FY18 estimates.”

Sangha thinks Cortex, which he has a “Buy” rating and a one-year price target of $6.00 on, will generate EBITDA of $400,000 on revenue of $11.1-million in fiscal 2017. He expects those numbers will improve to EBITDA of $1.4-million on a topline of $13.8-million the following year.