The Canada growth stocks on our list are in the Software/Internet Services sector and are trading below their peer average
SmallCapPower | March 24, 2017: Today we have identified some Canada growth stocks that compete in the Software and Internet Services space. Many of these industry participants are debt free, as there are no significant capital expenditures. Another advantage of the software industry is reoccurring sales from a subscription-based model. Once a client chooses to use your software, they are unlikely to switch, having already invested time and effort learning how to use it. This means annual contract renewals with virtually no selling costs. Having said that, the five tech stocks on our list are trading well-below their industry peer average EV/sales multiple of 2.8x, and may be undervalued.
Symbility Solutions Inc. (TSXV: SY) – $0.49
Symbility Solutions Inc. is a Canada-based technology company focused on providing claims processing solutions for various sectors of the insurance industry. The Company’s segments include Symbility Property (property and casualty software), which provides claims processing and estimating software for property and casualty insurers; Symbility Health (group insurance software), which provides a software that enables insurers, third-party administrators, employee benefits brokers, and the pharmaceutical industry to re-define collaboration in the healthcare system, and Symbility Strategic Services (mobile and application software), which designs and develops technologies in the area of mobile applications, the Internet of Things, machine-to-machine and wearables to different industries.
- Market Cap: $116.2 million
- Revenue (FY0): $26.5 million
- YTD Price PCT Change: -4.9%
- Enterprise Value to Sales: 0.35x
GoldMoney Inc. (TSX: XAU) – $3.25
Goldmoney Inc., formerly BitGold Inc., is a financial technology company that operates a global, full-reserve and gold-based financial services group. It provides financial services as a limited third-party, combining the attributes of gold with technology. It operates through two segments: GoldMoney and BitGold. Through BitGold, it operates a self-directed gold savings platform and a gold payments network allowing individuals and businesses to make purchases or sales of gold, receive online payments, or transact with online merchants. Through GoldMoney Wealth, it offers precious metals custody and wealth services, trading and execution, card services, tax-free retirement accounts and independent research to high net worth individual investors and institutions.
- Market Cap: $224.7 million
- Revenue (FY0, Default): $259.9 million
- YTD Price PCT Change: -0.9%
- Enterprise Value to Sales: 1.68x
Intrinsyc Technologies Corp. (TSX: ITC) – $2.22
Intrinsyc Technologies Corporation is a product developer and provides software, engineering services, and integrated solutions. The Company provides solutions for the development and production of mobile, embedded and the Internet of Things (IoT) devices with software solutions for Java or Component Object Model (COM) enterprise interoperability. It operates through three segments: Embedded Solutions, which includes its computer modules and development kits, engineering services related to these modules and kits, and distribution of cellular communication modules; General Engineering Services, which includes RapidRIL telephony software, iDevice Manager and other enabling technology, testing tools, and hardware reference designs and platforms, and Other Software Solutions.
- Market Cap: $46.8 million
- Revenue (FY0): $23.4 million
- YTD Price PCT Change: 2.8%
- Enterprise Value to Sales: 1.80x
Computer Modelling Group Ltd. (TSX: CMG) – $9.90
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 its 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: $785.0 million
- Revenue (FY0): $80.8 million
- YTD Price PCT Change: 8.7%
- Enterprise Value to Sales: 2.39x
Kinaxis Inc. (TSX: KXS) – $72.26
Kinaxis Inc. is a provider of Cloud-based subscription software for supply chain operations. The Company offers RapidResponse as a collection of Cloud-based configurable applications. The Company’s RapidResponse product provides supply chain planning and analytics capabilities that create the foundation for managing multiple, interconnected supply chain management processes, including demand planning, supply planning, inventory management, order fulfillment and capacity planning. Its customers include companies in various industries, including high technology and electronics; aerospace and defense; life sciences and pharmaceuticals; industrial, and automotive.
- Market Cap: $1,810.1 million
- Revenue (FY0): $155.7 million
- YTD Price PCT Change: 15.6%
- Enterprise Value to Sales: 1.40x