15 Hot Tech Stocks To Invest Before Summer Ends

Summary

• Tech stocks have posted terrific results amid pandemic, boosting investor confidence
• Industry bellwether Shopify is leading the show, but other stocks are not too far behind
• Kalkine takes a look at 15 hot tech stocks sweeping the market – some for its terrific gains and some for its disruptive and innovative models

The COVID-19 saga has changed the landscape of human history. And evolving along with us are our markets and the models of predictability. Social distancing has forced companies and consumers to adapt to technology including e-commerce and work-from-home arrangements. The new norm has sown new market trends and among those is the astonishing growth of tech stocks in Canada.

Developments this year have reinforced that information and technology (IT) will continue to define our future. In this new post-pandemic order, IT and its intangibles such as artificial intelligence, data, and internet of things (IoT) are at the forefront.

And investors have noted, resulting in a spike in tech stock valuations.

Industry bellwether Shopify Inc. (TSX:SHOP) has posted over 144 percent return in share prices this year. If projections are to be believed, its bull run will continue. With a current market cap of C$ 110 billion, this e-commerce giant accounts for 5.5 percent of the overall TSX market capitalization.

Canada’s information and communication technology (ICT) sector makes up almost 4.8 percent of the gross domestic product (GDP) and has generated C$ 210 billion in revenues. The country’s e-commerce market is projected to grow from US$ 3.53 trillion in 2019 to over US$ 6.54 trillion in 2023, says data firm Statista.

In our quest to bring the best, Kalkine presents 15 hot tech stocks that are currently sweeping over the market – some for its terrific results and some for its innovation and brilliance.

1. Dye & Durham Ltd (TSX:DND)

Dye & Durham Ltd is the new power horse on the TSX. The cloud-based legal technology firm’s scrips rose over 97 percent on its exchange debut on 17^th July 2020, after raising C$ 150 million in its initial public offering (IPO).

Riding high on the market’s tech surge amid pandemic, Dye & Durham’s stock price jumped from C$ 7.50 IPO price to C$ 14.80 on the listing day, marking the best trading debut for Canadian IPO in nearly three decades. Earlier this week, the cloud-based firm sold 20 million shares in an initial offering.

Dye & Durham provides cloud-based software solutions for legal and business professionals and has operations in Canada and the United Kingdom. It is the biggest technology IPO in the country since Lightspeed POS’s C$ 240 million IPO in March last year.

2. Lightspeed POS (TSX:LSPD)

Lightspeed POS made history with its C$ 240-million initial offering in March 2019, becoming the biggest technology IPO in Canada at the time. Its shares have since surged over 80 percent. This year, the firm gained 180 percent after bottoming out on March 19 (that’s more than Shopify), making investors wonder if it could be the next Shopify in Canada.

Worldwide public cloud services market is projected to grow to US$ 354.6 billion by 2022, up from US$ 227.8 billion in 2019, says research Gartner. Of this, cloud-base software as a service (SaaS) platform will account for US$ 151.1 billion by 2022.

Under these promising market projections, Montréal-based Lightspeed seems to have hit investors’ sweet spot. The company is a cloud-based platform powering small and medium enterprises and has presence in 100 countries.

3. Constellation Software Inc. (TSX:CSU)

Stocks of Constellation Software Inc grew by an astonishing over 3,800 percent in a decade, making it the top player on the TSX Capped Information Technology Index. It has posted nearly 27 percent growth year-to-date.

The Canadian tech firm distributed quarterly dividend of US$ 1 per share. The company posted a 16 percent growth to a total of US$ 953 million and 27 percent or USD 76 million increase in cash flows in its first quarter revenue.

Founded in 1995, Constellation Software develops customized software for public and private players has a market capitalization of over C$ 32 billion.

4. Absolute Software Corporation (TSX:ABT)

A small-cap firm, Absolute Software Corporation is an upcoming player in the fast-growing cybersecurity sub-sector and has grabbed investors’ attention. The company offers endpoint security and data risk-management solutions and has over 135 patents under its belt. Its pays C$ 0.08 quarterly dividend. The shares have gained almost 90 percent over a year, earning the tag of a growth stock.

In the third fiscal quarter of 2020, Absolute Software posted C$ 77.5 million in revenue, up by 5 percent over the prior year-to-date period.

5. Kinaxis Inc (TSX:KXS)

Another growth stock, scrips of software solutions firm Kinaxis has grown by more than 90 percent this year. It has a current market capitalization of C$ 5.2 billion.

Kinaxis announced a revenue growth of 15 percent to US$ 52.8 million in the first fiscal quarter of the year. Its SaaS revenue grew by 24 percent to US$ 34 million and has an adjusted EBITDA margin of 29 percent. The company has recently acquired artificial intelligence solutions firm Rubikloud for US$ 60 million in an all-cash transaction.

The Ottawa-based firm provides software solutions to supply chain management and sales and operations. It is likely to announce the results for its second quarter on August 6.

6. BlackBerry Limited (TSX:BB)

A darling of the tech boom in 1900s, smartphone maker BlackBerry’s fortunes dwindled and became a cautionary tale on how to flow with the trends. Its shares jumped from opening day price of C$ 1.04 on December 14, 1997 to C$ 148 on June 15, 2008. In the next decade, the price tumbled by 89 percent, down to C$ 16.19 on June 15, 2018.

But that was it. Today, Blackberry has exited the smartphone business and is one of the leading cybersecurity firms of the world. Its privacy software is used by all G-7 nations and top commercial banks worldwide.

The company’s shares advanced by 9 percent in the last three months. In its first quarter, its non-GAAP earnings per share was $0.02 (basic and diluted).

7. Sierra Wireless Inc (TSX:SW)

This multinational wireless communications firm is key player in the cellular IoT solutions provider sub-sector. Impacted by the pandemic, Sierra Wireless’ posted a revenue decrease of 27.7 percent or US $43.6 million in the first quarter of 2020 as compared to US$ 54.6 million in the first quarter of 2019.

These days the 5G technology innovator is focusing more on device-to-cloud subscription services over its core hardware market. Though its earning eroded in recent past, revenue kept growing. And just as the company was beginning to make a turnaround, the pandemic hit.

But looking at the future potential of IoT and 5G, Sierra is likely to be a long-term player.

8. Evertz Technologies Limited (TSX:ET)

This small-cap tech stock is a long-term player. A software and hardware producer, Evertz Technologies provides solutions in the broadcasting industry across multiplatform media segments. It announced a quarterly dividend of C$ 0.21 per share and has a current dividend yield of 2.7 percent.

Under the grip of coronavirus, Evertz Technologies’ shares fell by 30 percent this year. Despite that, the company continues generate investors’ interest, thanks to the future of broadcasting industry and its digitization demands. It has a current market cap of C$ 947 million.

9. Drone Delivery Canada (TSXV:FLT)

Our first entry from the Toronto Stock Exchange Venture on the hot tech stock’s list is developmental technology firm Drone Delivery Canada. As the name suggests, the company is developing and implementing a commercially viable drone delivery system within Canada.

The company has posted a massive 450 percent growth over the span of five years. Still a small firm with just C$ 132 million market cap, Drone Delivery Canada’s future looks promising, thanks to its position as an early industry player and the projected future of unmanned aerial vehicles (UAVs).

10. Open Text Corporation (TSX:OTEX)

Shares of enterprise information management software firm Open Text posted a 450 percent growth in a decade’s time. It pays C$ 0.1746 quarterly dividend and has a current market capitalization of C$ 16 billion.

The company’s cash flows went up by 15.2 percent to a total of US$ 329.6 million year-on-year in the third fiscal quarter year 2020 quarter. Open Text features on the Canadian Dividend Aristocrats Index and is among a handful tech firms with regular dividend growth.

11. Maxar Technologies (TSX:MAXR)

Space and satellite imagery firm Maxar has gained nearly 95 percent after crashing on March 21 due to COVID-led market turmoil. It has advanced by 7 percent in the past month, outperforming TSX information technology index which posted 1.90 percent gain MTD. It announced quarterly dividend of USD one cent (US$ 0.01) per share.

The company recently renewed four contracts and expanded a fifth contract – together valued over US$ 120 million – with international defense and intelligence customers in the second quarter of 2020. It also revealed plans to acquire Vricon for approximately US $140 million to consolidate its position in 3D technology and extend lead in earth intelligence segment.

An early player in commercial space segment, Maxar is now on every investors’ radar, thanks to the spectacular growth of SpaceX and Virgin Galactic.

12. Real Matters Inc. (TSX:REAL)

Canadian network management firm Real Matters posted 73 percent growth in revenues to US $ 109.6 million and increase in adjusted EBITDA to US$ 14.6 million in the second quarter. The scrips advanced by nearly 126 percent this year.

Real owns application software platform for mortgage lending and insurance industries on cloud-based environment. It has a current market cap of C$ 2.4 billion and will announce its third quarter results on July 30.

13. Sylogist Ltd. (TSXV:SYZ)

Largest tech firm on the TSXV by market cap, Sylogist shares have returned over 400 percent growth in a decade. The company continues to perform well in the pandemic, posting over 14 percent year-to-date gains.

It announced a quarterly dividend of C$ 0.10 per common share in the first quarter of the fiscal year and reported a gross profit margin of 77 percent, up from 76 percent in Q1 2019.

Sylogist provides ERP solutions to public service and non-profit organizations and has a market cap of C$ 276 million.

14. Docebo Inc (TSX:DCBO)

Docebo is a cloud-based SaaS enterprise learning management system. Its IPO was launched in October 2019 and the shares have since then posted handsome gains. This year, the stock price strengthened by over 133 percent. In its first quarter, the company posted a revenue of US$ 13.5 million, up 56.7 percent from Q1 2019.

Docebo’s develops AI-powered software for employee training modules in organizations. It has a current market cap of C$ 1.1 billion.

15. Kraken Robotics Inc. (TSXV:PNG)

This penny stock has posted gains over 220 percent in a three-year period. Kraken recorded a year-on-year profitability revenue growth of 367 percent and adjusted EBITDA margin of 20 percent in the first quarter of 2020.

A marine technology company, Kraken designs software-centric sensors and underwater robotic systems.