SmallCapPower | January 12, 2016 Canada, being a resource-focused economy, has suffered in 2015 in the wake of falling metals and energy prices. In turn, this has weakened demand for the Canadian Dollar. Canadian businesses that generate revenues in the U.S. and record costs in Canadian dollars, however, are precisely the companies to watch at the moment, which includes the ones on our list today.
The Ubika Gold 20 Index (UG20) surged 13.1% this month outperforming both the TSX Gold Index and the gold price, which gained 7.4% and 2.8%, respectively. Over the past 52-weeks, the UG20 is closest to seeing green, dropping a mere 1.7% versus gold’s drop of 8.7% and TSX Gold Index’s decline of 10.8%. SEMAFO Inc. (TSX: SMF) was the top-performing component company this month, climbing 22%.
Figure 1: Major Global Currencies, Performance vs. USD (Jan 2015 – Present)Source: Thomson Reuters (01/11/2016)
This 18% drop was exacerbated by a flourishing U.S. economy, and another rate cut by the Bank of Canada in July 2015, which only diminishes foreign investment into Canadian-denominated securities.
However, not all businesses stand to lose from a weaker dollar. Predominately, Canadian businesses that generate revenues in the U.S., and record costs in Canadian dollars, are precisely the companies to watch at the moment. These businesses, such as the ones on our list today, are well positioned to endure the low-dollar environment.
TIO Networks Corp.(TSXV: TNC)
IT Software & Services
TIO Networks Corp. is a Canada-based company that specializes in processing bill payment transactions through a secure Internet-enabled platform. The Company is a Cloud-based, multi-channel bill payment processor. TIO derives most of its revenues from the U.S., and has built up US$46.7 million in revenues during the past 12 months (LTM).
Be sure to check out our interview with TIO Netsworks Corp. CEO interview with Hamed Shahbazi.
Avi
gilon Corp.(TSX: AVO)
Security Technology
Avigilon Corporation is a security solutions Company, which develops, manufactures, markets and sells high definition (HD) and megapixel (MP) network-based video surveillance systems, video analytics and access control equipment for the global security market. Th
e Company derived 54% of revenues from the United States in 2014. LTM revenues topped US$276.6 million.
Mitel Networks Corp.(TSX: MNW)
Communications Equipment
Mitel Networks Corporation is a global provider of business communications and collaboration software, services and solutions. The Company operates in three geographic markets: Americas, Europe and Asia Pacific. Mitel derived 38% of revenues from the United States in 2014. LTM revenues were US$1.1 billion.
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