The TSX-listed Canadian tech stocks we’ve identified could bounce back quickly, as they are extremely oversold with an average daily RSI of 28.5
SmallCapPower | February 27, 2020: Yesterday, stock markets continued to sell off amongst fears of Coronavirus spreading. The S&P/TSX Composite Index is down 4.5% from its most recent high earlier in February, while the S&P/TSX Technology Index is down 10.5% from recent highs. Policy makers in China, Japan, Korea, the ECB, and the U.S., have hinted that they are willing to step in to provide stimulus to soften the economic impact of Coronavirus. Hence, the recent selloff could be a buying opportunity for high-quality, profitable companies. The small Canadian tech stocks we have found today are heavily oversold, as indicated by a relative strength index (RSI) below 30. However, these companies are profitable and have a ROE over 5%, meaning that they have strong potential to rebound once the market selloff wanes.
*Share prices as at February 25, 2020, data obtained from S&P Capital IQ
Celestica Inc. (TSX:CLS) – $9.34
Technology
Celestica provides design, manufacturing, hardware platform, and supply-chain solutions globally. The Company offers a range of services, including design and development, engineering, supply chain management, new product introduction, and component sourcing. Celestica services the aerospace, industrial, health tech, telecommunications, and storage businesses.
- Market Cap: $1,202.9M
- 7-Day Return: -9.0%
- YTD-Return: -12.3%
- 7-Day Average Trading Volume: 212,340
- 30-Day Average Trading Volume: 356,140
- Daily RSI: 27.0
- ROE: 5.3%
Tucows Inc. (TSX:TC) – $67.02
Technology
Tucows provides network access, domain name registration, email, mobile telephone services, and other Internet services in Canada, the United States, and Germany. The Company provides these services primarily through an Internet-based distribution network of Internet Service Providers, web hosting companies, and other providers of Internet services to end-users. The Company operates in two segments: 1) Network Access Services, which includes mobile & fixed Internet access services, Internet hosting, and network consulting services; and 2) Domain Services, which includes wholesale & retail domain name registration services and portfolio services.
- Market Cap: $711.9M
- 7-Day Return: -9.4%
- YTD-Return: -17.8%
- 7-Day Average Trading Volume: 5,180
- 30-Day Average Trading Volume: 2,500
- Daily RSI: 21.7
- ROE: 17.3%
Computer Modelling Group Ltd. (TSX:CMG) – $7.00
Technology
Computer Modelling Group (CMG) is a Canada-based computer software company serving the oil and gas industry. The Company develops and licenses its proprietary reservoir simulation software for international oil companies in ~60 countries. The Company also provides professional services, including consulting, training and contract research activities.
- Market Cap: $561.7M
- 7-Day Return: -9.3%
- YTD-Return: -14.2%
- 7-Day Average Trading Volume: 131,610
- 30-Day Average Trading Volume: 92,110
- Daily RSI: 23.9
- ROE: 52.3%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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