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Highlights
- The stocks in the Canadian tech sector are witnessing what seems to be quite a selloff
- The S&P/TSX Venture Information Technology (Sector) Index has sunk 36 per cent this year and nearly 20 per cent quarter-to-date
- These stocks have done better by some way compared to the sector
The stocks in the Canadian tech sector are witnessing what seems to be quite a selloff. Investors tend avoid or leave tech stocks when interest rates are hiked as this may reduce value to cash flows in the future particularly in a high-growth sector like tech.
The S&P/TSX Venture Information Technology (Sector) Index has sunk 36 per cent this year and nearly 20 per cent quarter-to-date. Over the last month it has lost 24 per cent.
However, not all TSXV-listed tech companies are losing. Let’s take a look at some of the outperformers in the sector.
Edgewater Wireless Systems Inc (TSXV:YFI)
The stock of Edgewater rose nearly six per cent Friday to C$0.9 when the sector fell over three per cent. Over the past month, it has gained about 29 per cent. Of the stocks here, it has gained the most during this period.
On March 25, it touched a 52-week low of C$0.045 and has since doubled. Year-to-date, it has zoomed over 38 per cent.
Also read: ARX, VET, POU, BIR & NVA: 5 TSX stocks may gain on EU Russian oil-ban
Pivotree Inc (TSXV:PVT)
PVT closed on Friday, May 6, at C$4.25 and has gained 15 per cent in the last month. It saw a 52-week low of C$3.15 on April 11 and has since rebounded and is now 35 per cent higher.
Pivotree has a market cap of C$112 million and its price-to-earnings (P/E) ratio is in the red by nine, which suggests net loss to the stockholders.
However, over the last 30 days, it has performed much better than its index.
Also read: BQE, WJX, RUS, SES & CGY: 5 Canadian industrial stocks to buy now?
Intouch Insights Ltd (TSXV:INX)
The company facilitates customer service with its products and its stock at market close Friday was priced C$0.67.
INX’s gain over the last 30 days stands at about 22 per cent. On March 24, it sank to a 52-week low of C$0.41 at which it was most likely in undervalued territory.
It then began a steep climb and is now better by 63.4 per cent.
EQ Inc (TSXV:EQ)
The EQ stock closed at C$1.26 Friday. Over the last 30 days, it has risen by 8.62 per cent.
The stock saw a 52-week low of C$1.10 on April 12 and since then, its rise has been fairly steady. It is now about 15 per cent better and might possibly be on the brink of being overvalued.
Also read: SGML, WED, DE, NFG & QRC: 5 TSXV small cap stocks for new investors
Voxtur Analytics Corp (TSXV:VXTR)
Voxtur offers targeted data analytics to the real estate space and its stock closed Friday at C$1.14.
VXTR saw a 52-week high of C$1.7 on April 18. Its 52-week low of C$0.6 came on July 19, 2021, and it is up 90 per cent from that.
VXTR’s loss over 30 days is 1.7 per cent but what makes it interesting is that it is inching toward undervalued territory after falling lower from its one-year high a couple of weeks ago.
Also read: BLU, VMD, FRX, CPH & TH: 5 TSX healthcare stocks beating the odds
Bottom line
The tech sector has not done well in 2022 and things in the near-term don’t look so bright with inflation and the possibility of more interest rate hikes.
These stocks have done better by some way compared to the sector. However, in terms of valuation metrics, there isn’t much to write home about for most of these stocks.
Also read: How does current inflation compare to 1970s stagflation?
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.
