5 TSX tech stocks to watch before 2023 begins

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 5 TSX tech stocks to watch before 2023 begins
Image source: © Andranik1990 | Megapixl.com

Highlights

  • Magnet Forensics’ adjusted EBITDA in Q3 2022 was noted at US$ 5.86 million.
  • In Q3 2022, Pason Systems’ total revenue was C$ 92.5 million.
  • Constellation Software’s net income in Q3 2022 was noted at US$ 143 million.

Canada’s technology sector is a significant contributor to innovation and a vital cog in the wheel of the country’s economic growth. With the inflation easing, the market is also witnessing relief. The current conditions may also bring a change in the technology sector. Continuous technological advancements and innovation may facilitate the sector staying relevant in the market. With the growth of Artificial Intelligence, there may be different movements witnessed by the sector in the long run.

Presently, the technology sector accounts for 5.78 per cent of the S&P/TSX Composite Index. As of December 1, 2022, the sector grew by 17.367 per cent quarter-to-date (QTD).

As a long-term investor, keep an eye on the opportunities provided by the sector and the overall market. Analyze the governing factors and look at the stock performances at regular intervals. Besides, check with the past and present company performances as well.

Before taking investing decisions with your hard-earned money, position your portfolio in sync with your stock selection. A diversified risk mitigation strategy can be the route to your ultimate investment goals.

Now, let us look at the five tech stocks along with their recent financial highlights:

  1. Pason Systems Inc. (TSX: PSI)

Pason Systems Inc. is an oilfield specialist that provides drilling data solutions and has a total market capitalization of C$ 1309.88 million. The company’s primary product is the electronic drilling recorder that provides drilling data networking, and drilling management tools. Some of the other products include wellsite communications and bandwidth, wellbore detection solutions, and wellbore gas analyzers.

In Q3 2022, Pason Systems’ total revenue was reported at C$ 92.5 million compared to C$ 57.7 million. The EBITDA increased to C$ 50.65 million from C$ 24.87 million for the same comparable period.

The company’s funds flow from operations rose to C$ 35.96 million from C$ 19.98 million. The cash from operating activities grew to C$ 30.74 million from C$ 17.07 million for the reported quarter.

For the same period, Pason Systems reported its net income at C$ 33.73 million compared to C$ 12.77 million. The company posted its dividend yield at 2.991 per cent and paid a quarterly dividend of C$ 0.12 per share.

On November 30, 2022, the company’s stock price was C$ 16.05.

  1. Open Text Corporation (TSX: OTEX)

Open Text Corporation offers solutions for unstructured information by offering services in the form of retrieval, aggregation, archiving, and searching. The information includes presentations, e-mails, and documents.

In Q1 FY 2023, Open Text Corporation reported its revenue at US$ 852 million versus US$ 832.3 million in the year-ago quarter. The company’s adjusted EBITDA fell to US$ 304 million from US$ 323.4 million for the same comparative period.

The cash and cash equivalents on September 30, 2022, were noted at US$ 1,704.38 million compared to US$ 1,693.74 million in the reported quarter. Meanwhile, the company’s total liabilities decreased to US$ 4,649.42 million from US$ 4,678.45 million for the same comparable period.

Open Text authorized a quarterly dividend per share of US$ 0.243 and posted a dividend yield of 3.382 per cent. The company posted its five-year dividend growth at 12.24 per cent.

On August 25, 2022, the company acquired Micro Focus International plc.

  1. Nuvei Corporation (TSX: NVEI)

Nuvei Corporation offers solutions to the merchants and partners in the form of online payments, in-store payments, and mobile payments. With a total market capitalization of US$ 2705.06, the company has a presence in Latin America, Asia Pacific, Europe, and the Middle East.

In Q3 2022, Nuvei reports revenue at US$ 197.14 million compared to US$ 183.93 million in the year-ago quarter. The company’s gross profit was noted at US$ 158.78 million compared to US$ 145.6 million for the same comparative period.

The company’s net income declined to US$ 13 million from US$ 28 million. Meanwhile, the adjusted EBITDA grew to US$ 81.2 million from US$ 80.9 million for the reported quarter.

As on September 30, 2022, the liabilities decreased to US$ 1,334.97 million from US$ 1,433.63 million on December 31, 2021.

  1. Magnet Forensics Inc. (TSX: MAGT)

Magnet Forensics Inc. develops and manages digital investigating software. It acquires, analyzes, and reports on evidence from digital sources. These sources include IoT devices, cloud services, computers, and mobile devices.

In Q3 2022, Magnet Forensics’ adjusted EBITDA was noted at US$ 5.86 million compared to US$ 4.69 million in Q3 2021. For the same period, the total revenue increased to US$ 24.99 million from US$ 17.77 million. The company’s total assets grew to US$ 171.32 million from US$ 161.97 million. Magnet Forensics’ gross profit jumped to US$ 23.31 million from US$ 16.44 million for the reported quarter.  

  1. Constellation Software Inc. (TSX: CSU)

Constellation Software Inc. is a Canadian technology company that focuses on customization and development of software. The target market for the company includes-Public and private sector. It is also engaged in building and acquiring vertical-specific businesses. The company serves tour operators, textiles, hospitality, credit unions and community care.

Constellation Software’s net income in Q3 2022 was noted at US$ 143 million versus US$ 121 million in the year-ago quarter. For the same period, the company reported its revenue at US$ 1,725 million compared to US$ 1,299 million.

The net cash flow from operating activities increased to US$ 321 million from US$ 292 million. Constellation Software reported its assets at US$ 7,325 million versus US$ 5,766 million for the reported quarter.

Meanwhile, the liabilities grew to US$ 5,625 million from US$ 4,245 million. The company’s EPS is US$ 29.18 with a quarterly dividend per share of US$ 1. The three-year dividend growth and the dividend yield were noted at 6.79 per cent 0.253 per cent respectively.

Constellation Software’s basic and diluted EPS of the company in two different quarters:

Bottom Line

Before selecting your stocks, check the growth prospects of the stock and build your portfolio around it. You have to be alert and aware while moving towards your wealth goals.

As an investor, operate with a wide horizon with thorough research. The market is dependent on several factors, of which some may be too small to notice. Do not neglect any factor. Keep analyzing each one of them from time to time to tap on the right opportunity as and when required.

Please note, the above content constitutes a very preliminary observation based on the industry and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.

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