A panel of investment analysts revealed their top tech stock picks for 2015 at the recent Cantech 2015 Investment Conference in Toronto. Some of these stocks are thought to have upside potential of more than 100%.
One of the highlights from the January 15 Cantech 2015 Investment Conference in Toronto was the panel of investment analysts who revealed their top stock picks for 2015. Presenting their selections was Massimo Voci of Haywood Securities, Pardeep Sangha of PI Financial Corp., Daniel Kim of Paradigm Capital, and Robert Young of Canaccord Genuity.
Espial Group Inc. (TSX: ESP): Both Massimo and Pardeep like this stock. Espial develops software for Smart TV manufacturers as well as Smart Top box vendors and has a recurring revenue model. On January 13, 2015, after the close of trading, the company announced a major contract with European Tier 1 Cable operator and its stock price surged more than 30%. Pardeep, however, believes its share price could still double from current levels ($2 a share).
Massimo asserts “there’s a huge change going on cable industry today.” He says Espial is delivering the “superior, Netflix-like experience” to cable operators. Massimo added that although the sales cycles are long for this company, Espial is winning substantial contracts.
Baylin Technologies Inc. (TSX: BYL): Daniel believes this company has “world-class technology that approaches massive markets that are growing quickly.” Born out of Israel, Baylin began developing antennas for smartphones and 10 years ago became the main antennasupplier for Samsung. He admitted that the company has disappointed from its IPO price and Samsung has made many missteps and Baylin suffered as a result, seeing that Samsung provided more than 70% of the company’s revenue.
The company has now begun to diversify, though, into infrastructure via cellular repeaters, which are miniature ‘base stations’ that go into ceilings of public rooms to provide cellular data, as well as into stadiums to provide audience members with a truly immersive video experience. It has also entered the home gateway market, through WiFi and cable boxes, and is working with companies such as Cisco Systems.
Kinaxis Inc. (TSX: KXS): This was Robert’s top pick. He likes the recurring revenue, predictable business model (subscription software), and strong growth prospects for this company. Kinaxis is aprovider of cloud-based subscription software that enables customers to improve and accelerate analysis (modelling) and decision-making across their supply chain operations in a matter of minutes and seconds, as opposed to days with some of more established software providers. He believes the company has an “enviable list of blue-chip customers,” who tend to stick with a company for a long time, and says the predictability of Kinaxis’ revenue model is very high. And, last quarter the company had 30% growth in its recurring revenue. He thinks the stock is worth its high valuation.
COM DEV International Ltd. (TSX: CDV): Daniel’s second pick has been in business for 25 years and has an 80% market share in the technologies that it delivers, that is components for satellite companies that send their products into space. Although COM DEV only grows its business about 5% a year, the company has invested about $100 million in a new industry – tracking ships at sea in real time. This business is now profitable, he contends, growing at 50% per year and could potentially double the earnings of the company. Daniel believes the stock could be a double from current levels.
TIO Networks Corp. (TSXV: TNC): Pardeep’s second pick is a cloud-based bill payments processor, which processes bills for wireless service providers such as AT&T and utility companies such as PG&E – Tier 1 customers on their customer list. He’s looking for 100% upside potential in this stock during the next 12 months. He believes the company is in a good growth phase at this time. TIO generated $50 million in revenue last year and Pardeep is looking for the company to produce more than $70 million in revenue this year.
QHR Corporation (TSXV: QHR): Massimo’s second stock pick, he says, is a “safer” name but has high recurring revenue and lower growth. QHR produces electronic medical records and other software in the healthcare industry. About 50% of doctors in North America are still using paper medical records, he contends. The transition is occurring at rate of about 10% to 15% per year. Over 80% of QHR’srevenue is recurring. Massimo believes the company has been trading at a depressed multiple because it has a small U.S.-based business that’s been burning cash and weighing on QHR’s profitability. The company, though, has made some organizational changes to its U.S. operations that will hopefully help drive growth this year.
