A trade spat between the U.S, and China has had a ripple effect in the tech space with tech stocks pulling lower amidst growing concerns about a full-blown trade war. Canadian tech stocks appear to be holding firm even as the trade war standoff threatens to spill over.Shopify Inc. (TSE:SHOP), Open Text Corp (TSE:OTEX), Constellation Software Inc. (TSE:CSU), Sangoma Technologies Corporation (CVE:STC), and Kinaxis Inc. (TSE:KXS) are some of the stocks taking the tech space by storm.
Shopify is by far the best performing Canadian tech stock if an 80% plus rally since the start of the year is anything to go by. The cloud-based multi-channel commerce platform provides merchants around the world with a single view of businesses and customers in various sales channels.
Shopify is in a phase of robust growth, something that investors are slowly coming to terms with. The Company is fresh from reporting a 50% increase in revenues in the recent quarter, its merchant solutions revenue having increased by 58% year-over-year. Underlying fundamentals turning bullish should continue to support the stock’s upswing.
Open Text Corp
Open Text Corp has been on an impressive run since the start of the year. The stock is already up by more than 20% compared to the software industry average of 7.3%. The information management company fits the bill as a top pick in the Canadian tech space as it continues to benefit from the dividend tax credit.
The Company is fresh from reporting impressive Q3 earnings results signaling underlying growth. Revenues in the quarter were up 5% as operating cash flow increased 6%, and EBITDA surged 15%.A dividend of 1.72% and a price to earnings ratio of 13.8 compared to the book of 2.9 affirms why the stock is a top pick in the sector.
Constellation Software is an exciting fundamental investment in the Canadian tech space after generating returns of 19.5% over the past 12 months. A 44.9% earnings growth rate for the past five years affirms the stock’s position as one of the top picks in the Canadian tech stock space.
For earnings-focused investors, a 0.46% dividend yield is on offer with Constellation software. The stock is already up by more than 30% for the year as investors react to improving underlying fundamentals.
Supply chain management firm, Kinaxis, is a Canadian tech stock showing signs of breaking out after a correction lower. After a 20% rally at the start of the year, the stock did come under pressure before resorting to trading sideways.
Fast forward the company’s sentiments in the market have improved fuelling suggestions of a potential breakout on the upwards. Revenues and earnings growth are some of the catalysts that affirm the Company’s long-term prospects.
Kinaxis services in the supply management space continue to elicit strong demand if a 15% increase in revenues to $39 million in the recent quarter is anything to go by. Subscription revenues increasing 18% and gross profit jumping 9% is another development that affirms Kinaxis growth trajectory and why it is a top pick in the tech space.
Small-cap Sangoma Technologies makes it into the list in part because of its impressive 53.95% growth in 2018. The stock has been on an impressive run over the last two years as it continues to make a name for itself on the delivery of unified communication solutions for both cloud and on-premises.
Impressive earnings results have been the order of the day. In the second quarter saw its revenues more than double after increasing 149%. Analysts at Beacon securities rate the stock as a buy.