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Summary
- A semiconductor stock has outperformed the S&P/TSX Capped Information Technology Index and yielded four times growth in 2021.
- Stocks of an optical fiber producer have gained over 128 per cent in one year. On top of that, the firm reported its topline with an 87 per cent year-over-year growth in Q3 2020.
- Tech stocks are likely to grow as people opt for work-from-home and hybrid work modules.
The S&P/TSX Capped Information Technology Index has grown more than 49 per cent in one year. Canadian large-cap technology stocks such as the DOCKS - Descartes Systems, Open Text, Constellation Software, Kinaxis, and Shopify – have achieved record highs amid the pandemic, driving the domestic tech rally.
But small-cap companies are not behind in this bull-run. Here are two tech stocks under C$5 that have shown remarkable performance so far:
Drone Delivery Canada Corp. (TSXV:FLT)
The developmental tech company builds drones and offers its services to merchants, the service sector, and government organizations.
It is currently trading at C$ 2.01 per share, with a one-year return of 164.50 per cent. It holds a present market cap of C$ 422.23 million and a price-to-book ratio of 25.125.
Drone Delivery has a massive price-to-sales ratio of 5,887 and YTD growth of over 145 per cent.
Michael Zahra, President, and CEO, Drone Delivery, expects to monetize its data received via its delivery processes to enhance its revenue. The tech company is also looking for further expansion and exploring the Software as a Service (SaaS) segment.
Image Source: Kalkine Group @2021
Photon Control Inc. (TSX:PHO)
The semiconductor firm produces optic fiber monitoring systems. It has a stock price of C$ 2.81 per common share, with a market cap of over C$ 294 million.
The tech stock has returned more than 128 per cent in one year, with a positive return on equity of 21.45 per cent. It has earnings per share of C$ 0.12 and a price-to-cashflow ratio of 18.
It has added over 39 per cent gains year-to-date, which is an almost four times gain as against the tech index’s year-to-date performance of 10 per cent.
In the third quarter of 2020, the Vancouver-based firm reported a topline of C$ 16.3 million against C$ 8.7 million, up more than 87 per cent year-over-year. It posted a record year-to-date (YTD) revenue of C$ 49.7 million in Q3 2020, compared to C$23.9 million in 2019.
In its outlook, the firm estimated revenues in the range of C$ 12 to C$ 14 million for Q4 2020.
