The TSX stocks we’ve identified have seen an average return of 33% since graduating from the Toronto Venture exchange
SmallCapPower | December 5, 2019: One of the biggest decisions a Board of Directors will face during the life of a corporation is the decision to go public. For emerging companies coveting a listing in Canada, the decision to list on an exchange usually means listing on the TSX Venture Exchange (TSXV). If an emerging company is performing well it may decide to graduate to the Toronto Stock Exchange (TSX). A company approved for listing on the TSX joins a class of issuers that includes many large and reputable domestic and international firms. TSX-listed companies have better access to capital markets, as well as financial media and analyst coverage, in addition to interest from institutional investors and pensions funds, many of which are mandated to only invest in TSX-listed companies. However, graduation from the TSXV to the TSX doesn’t guarantee a better stock-price performance despite having access to more institutional investors. Over the past two years only three graduating companies, the ones on our list today, have achieved positive returns.
*Share price data as at December 3, 2019, data obtained from S&P Capital IQ
Viemed Healthcare, Inc. (TSX:VMD) – $8.08
Health Care Providers
Viemed Healthcare provides in-home healthcare solutions in the United States. VHI provides respiratory services & related equipment, along with respiratory disease management, neuromuscular care, and oxygen-therapy services. Viemed also provides education and counseling to patients using its technology. The Company has relationships with hospitals and pulmonologists in over half of the U.S. states. On November 4, 2019, Viemed reported Q3/19 financial results, highlighted by a 37% sequential increase in revenue to $23.5M and a 22% increase in net income to $3.0M.
- Market Cap: $306.7M
- Graduation Date to TSX: 23-May-2018
- Share Price at Graduation Date: $5.19
- Return Since Graduation: +56%
HLS Therapeutics Inc. (TSX:HLS) – $17.73
Specialty Pharmaceuticals
HLS is a Canada-based, North America-focused specialty pharmaceutical company concentrated in the areas of specialty central nervous system (CNS) disorders and cardiovascular disease (CVD). The Company is focused on bringing innovative central nervous system and cardiovascular therapeutics to North America. HLS’s anchor drug Vascepa, a purified Omega-3 fatty acid derivative, has delivered positive clinical results for the treatment of cardiovascular disorders, such as high blood pressure and cholesterol. If approved, the drug it is expected to disrupt the $700M Canadian cardiovascular market, which Pfizer’s Lipitor (Atorvastatin) currently has the largest market share.
- Market Cap: $545.0M
- Graduation Date to TSX: 07-Feb-2019
- Share Price at Graduation Date: $14.25
- Return Since Graduation: +24%
Global Atomic Corporation (TSX:GLO) – $0.49
Uranium Mining
Global Atomic engages in uranium development and zinc concentrate production. It owns the Dajy Area Surface Anomaly deposit, which includes six exploration permits covering an area of approximately 750 square kilometers located in the Republic of Niger. Uranium mineralization has been identified on each of the permits, with the most significant discovery being the DASA deposit situated on the Adrar Emoles III concession. The DASA deposit is currently undergoing Feasibility work and an Environmental Impact Study prior to applying for a mining permit in Q4/20. The Company also processes electric arc furnace dust into zinc concentrates, which is sold to zinc smelters.
- Market Cap: $71.2M
- Graduation Date to TSX: 08-May-19
- Share Price at Graduation Date: $0.42
- Return Since Graduation: +17%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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