SmallCapPower | April 2, 2018: U.S. tech stocks have dropped 6% over the past month, driven primarily by the Cambridge Analytica controversy and self-driving car crashes. Currently, the Dow Jones U.S. Technology Index is down 1% since the start of the year, while the S&P/TSX Capped Information Technology Index is up 8% over the same timeframe, despite the TSX being down 7%. As a result, the Canadian tech stocks on our list today could be considered value plays.
Celestica Inc. (TSX:CLS) – $13.29Semiconductors
Celestica is a Canadian tech company that provides a variety of process improvement solutions to the electronics manufacturing segment. Celestica's services include design and development, engineering services, raw materials sourcing, assembly & testing and supply chain management solutions. On January 24, the Company announced the acquisition of Atrenne Integrated Solutions, a durable electromechanical solutions provider focused on aerospace applications for US$139M.
Market Cap: $1,884.6 MillionYTD Total Return: 0.8%Enterprise Value to EBITDA LTM : 4.6xForward Enterprise Value to EBITDA FY2018: 4.1xPeer Median Enterprise Value to EBITDA LTM: 10.3xPeer Median Forward Enterprise Value to EBITDA FY2018: 9.1xIntertain Group Ltd. (TSX:ITX) – $14.65Online Services
Intertain Group is a Canada-based online gaming company that offers bingo and casino games through a variety of separately-operated brands. Intertain is the largest online bingo-led operator in the world.
Market Cap: $286.6 MillionYTD Total Return: 2.1%Enterprise Value to EBITDA LTM: 4.6xForward Enterprise Value to EBITDA FY2018: 4.3xPeer Median Enterprise Value to EBITDA LTM: 10.3xPeer Median Forward Enterprise Value to EBITDA FY2018: 9.1xPoints International Ltd. (TSX:PTS) – $12.50Online Services
Points International is a Canada-based online services company that offers a loyalty program platform, allowing purchase of loyalty rewards such as air miles. Points' e-commerce platform integrates travel booking options with purchase options across a wide network of partners.
Market Cap: $183.5 MillionYTD Total Return: -3.8%Enterprise Value to EBITDA LTM: 8.9xForward Enterprise Value to EBITDA FY2018: 4.9xPeer Median Enterprise Value to EBITDA LTM: 10.3xPeer Median Forward Enterprise Value to EBITDA FY2018: 9.1xBaylin Technologies Inc. (TSX:BYL) – $3.97Communications & Networking
Baylin Technologies is a Canada-based tech company focused on creating antennas for mobile, networking and wireless infrastructure industries. The Company's mobile division produces antennas for mobile devices, which typically contain between three to seven antennas built into the handset. Its networking division creates antennas for Wi-Fi routers, home networking devices and land mobile radio products. Its wireless infrastructure division works with network carriers to produce distributed antenna systems to meet their requirements. From its production facilities in Asia, the Company produces 250M antennas per year, with the capacity to ramp up to 300M.
Market Cap: $124.3 MillionYTD Total Return: 15.4%Enterprise Value to EBITDA LTM: 40.4xForward Enterprise Value to EBITDA FY2018: 5.8xPeer Median Enterprise Value to EBITDA LTM: 10.3xPeer Median Forward Enterprise Value to EBITDA FY2018: 9.1xPivot Technology Solutions Inc. (TSX:PTG) – $2.04IT Services & Consulting
Pivot Technology Solutions is a Canada-based IT solutions provider. The Company provides multi-vendor solutions, allowing customers to obtain their tech solutions from one source. Pivot services over 2,000 customers through its eCommerce portal and 130,000 sq. ft. production facility.
Market Cap: $82.0 MillionYTD Total Return: -5.7%Enterprise Value to EBITDA LTM: 12.0xForward Enterprise Value to EBITDA FY2018: 6.9xPeer Median Enterprise Value To EBITDA LTM: 10.3xPeer Median Forward Enterprise Value To EBITDA FY2018: 9.1xDisclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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