AUS
NZ
UK
CA
USA
IND
Summary
- Investors are always on the lookout for smallcap stocks with sound fundamentals and solid growth charts.
- However, the year 2020 was a difficult time for most smallcap companies as they struggled with the pandemic.
- We explore 13 small cap stocks from various sectors that beat all odds and yielded good returns for investors in 2020.
Calendar 2020 has been a mixed year for smallcap stocks on the Toronto Stock Exchange, the broad stock market of Canada. The pandemic decimated the markets, flayed most companies, and eroded value of many popular stocks.
The S&P/TSX Smallcap Index (^TX20), a benchmark indicator of smallcap stocks on the TSX with 191 constituents, is down by over 8 per cent this year. However, in the last three months, the index has gained 8.61 per cent, indicating a slow but positive momentum in overall market sentiments.
Investors are always trying to identify smallcap stocks with sound fundamentals and solid growth charts.
In this article, we look at 13 small cap stocks from various sectors that beat all odds and yielded good returns in the year of the pandemic.
Please note, smallcap companies are identified with their current market capitalization, which roughly falls between $300 million and $2 billion.
Healthcare Stocks
Healthcare segment remained in the limelight throughout 2020 due to the pandemic. However, only a handful smallcap healthcare stocks broke the barriers and scripted good returns.
Trillium Therapeutics Inc (TSX:TRIL) advanced by a whopping 1200+ per cent year-to-date (YTD), emerging to be one of the best performing healthcare stocks this year. The clinical stage immuno-oncology company, which develops cancer therapies, posted a net loss of US$ 173.0 million for the nine-month-period ended September 30, 2020. This is higher than the net loss of US$ 22.4 million a year ago. The COVID stock has been trending since Pfizer announced a US$ 25-million equity investment in September that came close on the heels of positive updates of dose escalation from its key clinical studies of TTI-621 and TTI-622.
Other top performing smallcap health stocks include WELL Health Technologies Corp (TSX:WELL), which gained an astonishing 350 per cent this year, and Andlauer Healthcare Group Inc (TSX:AND) that rose by 90+ per cent YTD.
Tech Stocks
Tech stocks were the clear winners of 2020. Docebo Inc (TSX: DCBO), a cloud-based Learning Management System platform, skyrocketed by over up 280 per cent year-to-date (YTD), becoming one of the best smallcap tech stocks of 2020. Docebo recently closed its US initial public offering (IPO) and a public offering in Canada, raising US$ 165.6 million. Its revenue grew by 52 per cent year-over-year (YoY) to US $16.1 million in the third quarter of 2020. Net loss reduced to US$ 1.2 million in Q3 2020, down from a net loss of US$ 3.7 million a year ago.
Other smallcap software stocks worth noticing are Real Matters Inc (TSX:REAL) and Absolute Software Corporation (TSX:ABST). Both these stocks posted terrific returns, gaining over 50 per cent YTD.
Metals & Materials
Precious metals were the other big winners of the pandemic markets, with gold prices touching new heights in 2020. Smallcap gold stock New Gold (TSX:NGD) scrips advanced by a massive 135+ per cent YTD. In its third quarter report, New Gold’s revenues grew to $174 million, up from $168.4 in the same quarter a year ago.
Stocks of Labrador Iron Ore Royalty Corporation (TSX:LIF) witnessed a steep fall during the March market crash. However, it sharply bounced back, gaining over 125 per cent over the last eight months and crossing its pre-pandemic levels in February. The stock is up by 25 per cent YTD. Its net income remained pretty much static YoY at $57.7 million, but revenue increased ~14 per cent YoY to $52.9 million.
Our honorary mention in this section: MAG Silver Corp. (TSX:MAG). The stock gained almost 40 per cent YTD.
YTD performance of TSX/S&P Smallcap Total Return Index (Source: EODHD/Others, Thomson Reuters)
Consumer Stocks
While most retail and consumer companies struggled to stay afloat this year, a handful stocks fared well in the pandemic market conditions.
Goodfood Market Corp. (TSX:FOOD), a smallcap consumer stock, gained a sweet 150+ per cent this year. This Montreal-based online food retailer company that deals in packaged food and meal kits gained prominence amid the pandemic when consumers preferred to stock-up quick cook meals at home. Its revenues touched C$ 285.4 million for the fiscal year 2020 (ending august 21, 2020), up 77 per cent YoY. Net loss for the fiscal year reduced to C$ 4.136 million from C$ 20.937 million a year ago.
Other smallcap stocks worthy a mention in this story are vitamins manufacturer Jamieson Wellness (TSX:JWEL), up by 37 per cent this year. Hardware firm Richelieu Hardware Ltd. (TSX:RCH) gained 32 per cent while retail firm North West Company Inc (TSX:NWC) gained 20 per cent.
Industrial Stocks
Stocks of Badger Daylighting Ltd. (TSX:BAD) took a deep dive due to the pandemic, touching its lowest point in five years of C$ 19.02 on March 24. Since then, the scrips have bounced back magnificently, gaining over 110 per cent as the time of filing this.
Worthy Mentions
The list of top-performing smallcap stocks cannot be limited to one article. Therefore, here are some worthy mentions that emerged victorious in the year of the pandemic are goeasy, Aurora Cannabis, Aphria, Crescent Point Energy etc.
