- The S&P/TSX Capped Information Technology Index has plummeted about 33 per cent on a year-to-date (YTD) basis
- NVEI is trading 59 per cent below its one-year high
- SHOP is now 76 per cent below its 52-week high
The year 2022 has not gone great for the tech sector so far. The S&P/TSX Capped Information Technology Index has plummeted about 33 per cent on a year-to-date (YTD) basis and 15 per cent in April.
Hiking interest rates don’t bode well for tech stocks, is a view some investors have. Conversely, some experts say this notion is not an absolute truth.
Might May be the month the sector finally rebounds this year? How long will tech stocks fall before being undervalued?
Let’s look at five TSX-listed tech stocks.
Constellation Software Inc (TSX:CSU)
This software customizer’s stock closed Tuesday, April 27, at C$2,095.00.
Though the stock has lost nearly 11 per cent this year, it is up 13 per cent over the last 12 months. Furthermore, it has recovered about four per cent in the last four months and is also in the green on a 30-day basis.
CSU has a price-to-earnings ratio (P/E) of 116.60. A dividend paying stock, its dividend yield is 0.243 per cent. Perhaps notable is its three-year dividend growth rate of 23.11.
CGI Inc (TSX:GIB.A)
The company has a market cap of 21.7 billion. The stock of CGI Inc closed at C$101.98 Tuesday. The stock has lost nearly nine per cent YTD.
However, it has rebounded 1.7 per cent in the last month and is up 2.4 per cent month-to-date (MTD). It has a return-on-equity of 19.7 per cent.
Open Text Corporation (TSX:OTEX)
The OTEX stock closed Tuesday at C$50.25 after dropping 5.26 per cent in the day’s trade.
On this day, the OTEX stock touched a 52-week low of C$50.24. It is in the red by about 15 per cent in the last year and has lost 16.3 per cent YTD.
Open Text has a market cap of 13.5 billion and a P/E of 23.4. Its dividend yield is 2.241 per cent.
Shopify Inc (TSX:SHOP)
Shopify’s stock lost over six per cent Tuesday and closed at C$549.07. Its current market cap is C$62 billion.
The SHOP stock has plummeted 63 per cent in the last 12 months post its rally in the initial phase of the pandemic years. It is down 69 per cent YTD.
Nuvei Corporation (TSX:NVEI)
This online payment facilitator has a market cap of C$4.8 billion. Its stock ended Tuesday at C$73.27.
The stock has sunk about 16 per cent in a year and 10 per YTD. On September 17, 2021, it was priced at C$180 and it is currently trading over 59 per cent below that.
NVEI’s P/E ratio is 86.
To be sure, caution and copious homework is required for any investment. Some of these tech stocks have fallen a fair bit and stocks like NVEI and SHOP are trading 59 per cent and 76 per cent below their one-year highs, respectively.
These companies are established tech companies listed on the TSX. They remain an interesting watch in May.
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.