The Toronto Stock Exchange on Tuesday announced its TSX30 for 2020 , with Canadian tech names featuring heavily in the mix.
First introduced last year, the TSX30 tallies the top-performing stocks over the past three years, highlighting some of the big growth stories featured on the exchange. This year’s crop contains a quite a few high-flying mining stocks, an industry which has finally broken through after a considerable dry spell, but tech stocks along with a number of cannabis names are also well-represented.
E-commerce giant Shopify (Shopify Stock Quote, Chart, News TSX:SHOP) took top honours, returning a massive 1043 per cent over the three-year period, with cleantech company Ballard Power Systems (Ballard Power Systems Stock Quote, Chart, News TSX:BLDP) coming in second with a 459 per cent return.
All told, the average three-year share price performance came in at 242 per cent, a testament to the power of both well-known names like Shopify and Constellation Software (Constellation Software Stock Quote, Chart, News TSX:CSU) but also perhaps lesser-known companies like Enghouse Systems (Enghouse Systems Stock Quote, Chart, News TSX:ENGH), returning 185 per cent over the three years, and Cargojet (Cargojet Stock Quote, Chart, News TSX:CJT), returning 248 per cent.
“It’s part of what we’re trying to accomplish with the TSX30, to showcase some companies that maybe fly under the radar but have incredible performance,” said Loui Anastasopoulos, President, Capital Formation for the TMX Group, who spoke to Cantech Letter on Tuesday. “The tech companies are prominent in the list this year and we’re really pleased with what we’re seeing coming out of that sector.”
Technology stocks on the list averaged a return of 330 per cent, best among the various sectors, with Life Sciences including cannabis coming next at 244 per cent. Mining stocks returned 223 per cent, Industrial Products & Services averaged 189 per cent, Consumer Products & Services averaged 163 per cent and Financial Services brought in 163 per cent.
Anastasopoulos says having the combination of a junior exchange in the Venture as well as the senior board is a big deal for public companies, where 12 of the 30 listed in this year’s TSX30 are former TSXV companies, making this year’s list a Venture Exchange graduation story.
“It shows how powerful the Venture is as a platform to incubate and to give these early-stage entrepreneurs and companies an opportunity to go public, raise capital and build their businesses,” Anastasopoulos said.
“What we see is tech companies being able to leverage that platform to their benefit. Just over the last few months alone we’ve seen companies like Score Media and Gaming (Score Media and Gaming Stock Quote, Chart, News TSXV:SCR) who just completed the $25 million bought deal, Sangoma Technologies (Sangoma Technologies Stock Quote, Chart, News TSXV:STC) and Blackline Safety (Blackline Safety Stock Quote, Chart, News TSXV:BLN) also both with large financings,” Anastasopoulos said. “I think our two-tier marketplace is working really, really well for these early-stage technology companies.”
As for tech’s current performance in 2020, the S&P/TSX Technology Index is up about 45 per cent as of the end of August, while for 2019, the sector was up 61 per cent.
Anastasopoulos said those gains highlight how tech companies on the TSX have benefitted from a society-wide shift spurred forward by the COVID-19 pandemic.
“The economy has become more digital over the last number of years and I think the pandemic has accelerated that move to technology and a lot of these companies are really capitalized on that,” Anastasopoulos said. “It’s helping fuel some of the performance that we’re seeing, that alongside strong businesses, strong business plans and strong management teams that are doing the right things.”