TSX Venture Exchange announced its 2011 TSX Venture 50 list last week, and several Canadian technology companies made the cut.
The list is a ranking of strong performing companies listed on TSX Venture Exchange. The companies were chosen based on share price appreciation, trading volume, market capitalization growth and analyst coverage. The list has 10 companies in five categories—Clean Technology, Mining, Oil and Gas, Diversified Industries, and Technology and Life Sciences.
CounterPath Corporation ranked fifth in the Technology and Life Sciences category. The Vancouver-headquartered, globally functioning company develops and markets voice over Internet protocol (VoIP) products (like soft phones) and technology for service providers like Verizon and AT&T.
CoutherPath’s stock (CCV) has grown from $0.40 a year ago to $2.20 today.
David Karp, the company’s chief financial officer, credits CounterPath’s success to its investment in research and development. Since its inception in 2002, the company has spent $120 million on research and development and holds 24 patents, which Karp says provide a significant competitive advantage.
Being featured on the list provides a huge benefit to companies like CounterPath, he says. “It certainly increases the awareness of our company by investors, analysts and ultimately will lead to greater trading in our stock.”
CounterPath has a positive future because of an emerging market for the company’s products, especially because of an increasingly mobile workforce, the CFO says.
“Issuers will benefit from increased international awareness of Canadian companies, which expands the Canadian capital pool,” says Carolyn Quick, director of corporate communications for TMX Group.
Calgary-based company Cortex Business Solutions Inc. ranked third in the same category as CounterPath. It provides services for companies to make their accounts payable and accounts receivable processes electronic.
“Technology is a very active sector,” says Ryan Lailey, vice president of business development at Cortex. Around this time last year, Cortex had about 50 employees, he says, and now has 92. The company’s market capitalization also increased dramatically over one year, while its stock (CBX) stayed relatively stable with a 52-week range of $0.34 to $0.60.
In January 2011, the TSX Venture saw nearly 19,000 trades in the technology market, with a total value of almost $42 million.
For Lailey, being included on the Venture 50 list means increased visibility. Despite his company’s growth, this is especially important for small Canadian companies looking to expand, like Cortex is into the United States, he says.
Canada’s technology sector, Lailey says, doesn’t have the same level of interest from investors as the U.S. “Canada is more resource-focused,” he says, which can be a challenge for tech startups and small companies.
The potential merger of TMX Group and the London Stock Exchange, then, could favour companies like Cortex.
Lailey says he personally thinks the merger could be beneficial. “It seems like there’s a big push globally to merge markets,” he says, which could mean increased visibility for Canadian technology on the world stage.
“I would look at is very positively as an opportunity to trade in Europe,” Karp says of the potential merger. “It will also make it easier to raise capital in Europe,” he says, for both CounterPath and other companies.
The TMX Group argues the same, that “…issuers will benefit from increased international awareness of Canadian companies, which expands the Canadian capital pool,” says Carolyn Quick, director of corporate communications.
Karp says he expects the merger to go through. “I think it makes a lot of sense.” CounterPath is already publicly traded in Canada and the United States and functions all over the world, but he says Canadian companies could still benefit from further exposure abroad.
Other Canadian tech companies that made the list include Vancouver’s NanoTech Security Corporation and Calgary-based Pure Technologies Ltd.
The TSX Venture 50 companies will be awarded at a reception on March 31.