The Canadian small cap tech stocks on our list are trading above their intrinsic value and are potentially overvalued
SmallCapPower | June 27, 2017: Intrinsic value represents the true value of a company. It represents the present value of all a company’s future cash flows. Many investors seek to calculate a company’s intrinsic value to determine if the company in question is undervalued or overvalued compared to its current market price. Today we have identified three Canadian small cap tech stocks that are trading above their intrinsic value, per data from Thomson Reuters.
Computer Modelling Group Ltd. (TSX: CMG) – $10.28
Software
Computer Modelling Group Ltd. (CMG) is a Canada-based computer software technology company serving the oil and gas industry. The Company operates through the development and licensing of reservoir simulation software segment. The Company is a supplier of process reservoir modelling software with a blue chip customer base of international oil companies and technology centers in approximately 60 countries. The Company also provides professional services consisting of specialized support, consulting, training and contract research activities.
- Market Cap: $817,617,003
- Revenue (LTM): $75,097,000
- Est. Intrinsic Value Per Share: $5.14
- Price/Intrinsic Value: 2.00x
Tecsys Inc. (TSX: TCS) – $15.00
Software
Tecsys Inc is a Canada-based company engaged in the development, marketing and sale of enterprise-wide supply chain management software for distribution, warehousing, transportation logistics and point-of-use. The Company also provides related consulting, education and support services. Its Supply Chain Platform with Visual Content is a technology for optimizing warehouse management operations. It offers various services, such as project management, customer support, training and technical services. The Company also offers Supply Chain Modeling And Reference Tools (SMART), which is a supply chain knowledge product. In addition, the Company offers business consulting services, including warehousing and inventory management, transportation and logistics, procurement planning, business intelligence, accounting and finance, and business process re-engineering.
- Market Cap: $184,729,890
- Revenue (LTM): $67,466,000
- Est. Intrinsic Value Per Share: $9.38
- Price/Intrinsic Value: 1.60x
Points International Ltd. (TSX: PTS) – $11.95
Online Services
Points International Ltd. (Points) provides a range of e-commerce and technology services to loyalty program operators using a common infrastructure. These services include a range of white label or private branded e-commerce services (Loyalty Currency Services) that enable the sale of loyalty currencies (such as frequent flyer miles, hotel points and credit card points), both retail and wholesale, and support the loyalty program consumer offerings and their back end operations. The Company offers the consumer-focused Points Loyalty Wallet that allows users to track, manage and access multiple loyalty rewards programs through the Points.com Website. It also offers Points Travel, which is private label travel e-commerce platform designed specifically for the loyalty industry.
- Market Cap: $177,689,019
- Revenue (LTM): $432,205,603
- Est. Intrinsic Value Per Share: $7.75
- Price/Intrinsic Value: 1.54x
Disclosure: Neither the author nor any of the principals at Small Cap Power, or their family members, own shares in any of the companies mentioned above.
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