While most of the “buzz” at Stockhouse continues to revolve around cannabis, investors also need to keep other sectors on their radar. Indeed, with investing being a forward-looking activity, many stock hunters intentionally seek out sectors (and companies) that are not currently in favor. Known as Contrarians, these investors have a radical investment philosophy: buy low; sell high.
Today, most “investors” are simply momentum-chasers – buying high and attempting to sell even higher. For those who are committed to the tried-and-true principles of investing, maybe now is the time to be taking a closer look at tech?
Paradoxically (in the 21st century), tech is a sector that is currently broadly out of favor with Canadian investors in most of its many niches. As the pace of technological change continues to accelerate and our lives are revolutionized by new innovations, how can (in particular) small-cap technology stocks be such laggards?
At least part of the answer is found in an irrational disconnect in our markets, spelled “NASDAQ”. The U.S.’s technology index has once again soared into an epic bubble. While the NASDAQ has gone almost straight up over the past 6 years, U.S. corporate earnings over this interval have been flat. NASDAQ stocks have just kept getting more and more and more expensive – and still momentum-chasers are soaking up these grossly overvalued shares.
Then we have the smaller technology companies. The valuations for these small-cap innovators have been compressed to almost the same degree that NASDAQ valuations have been exaggerated. This has taken its toll on investor sentiment, as seen with the Bullboard numbers for Stockhouse’s most popular technology stocks.
Top Viewed Technology Stocks
Aurora Cannabis Inc (TSX: ACB: OTCQB: ACBFF, Forum) logged an incredible total of 303,624 BullBoard reads in the week September 18 to 24, perhaps the biggest one-week number for any Bullboard in 2018. Among our tech Bullboard leaders, the Top-6 companies combined registered 37,824 reads – not much more than 1/10th the total for ACB.
When Contrarian investors look at numbers (and sentiment) like this, they see opportunity. Tech stocks are too much out of favor in relation to cannabis stocks. Small-cap tech companies are much too much out of favor in comparison to the bloated behemoths of the NASDAQ.
Here at Stockhouse, the following small-cap companies are currently attracting the most attention. Fandom Sports Media Group (CSE: FDM, OTCQB: FDMSF, Forum) is active in “development of online and mobile applications”, with one of these applications being e-sports. Prize money for these virtual sports is roughly on par with the real-world professional sports. Thousands of fans pack arenas just to watch the competitors.
There is already a lot of money at play here. Growth is exponential. Yet the entire market cap of FDM wouldn’t even fill the petty-cash drawer of an Apple or Amazon.
Patriot One Technologies Inc (TSX: V.PAT, OTCQB: PTOTF, Forum) has recently re-appeared among Stockhouse’s tech leaders. PAT is bucking the general trend here – having gotten a recent bump in share price from the Company’s Q3 update.
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In 3rd position among Stockhouse’s leading tech stocks is Reliq Health Technologies Inc. (TSX: V.RHT, OTCQB: RQHTF, Forum). Reliq is a hard-working tech junior that has been advancing operations and generating lots of news – but not getting any traction in the market.
Another junior technology company that also falls under this category but may be in the process of breaking out is Enerdynamic Hybrid Technologies (TSX: V.EHT, OTCQB: EDYYF, Forum). The stock is up sharply today, on big volume, after the Company announced a deal to supply working capital regarding a major new construction project that is estimated to generate roughly US$300 million in profits for EHT over its 10-year span.
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This raises the question: where can Contrarian investors go to find the next junior technology companies that are about to make a splash? Stockhouse has the answer: Stableview TECH18.
One of “the largest gatherings of tech investors, entrepreneurs, business leaders, and innovators” in the Canadian technology space, this year Stockhouse is sponsoring this event. The conference is located in Toronto, taking place on October 4, 2018. Investors who will be in/around the GTA at this time can go here for additional information.
Stockhouse will be providing additional coverage here in the days leading up to the event. However, for investors looking for a few names to look at now, to start their due diligence early, you might want to check out the following companies who will be presenting, or simply attending the conference: Acuity Ads Holdings Inc. (TSX: V.AT), VersaPay, Well Health, Ratio City, Channel Gate, JLL – Jones Lang LaSalle, and D-Wave Systems Inc.
Many of these companies do not yet have a public listing, meaning that this is an opportunity for investors to get to know these new companies, and get in early.
To be clear, no one at Stockhouse is knocking cannabis or cannabis stocks. Thanks to cannabis Prohibition, this is a brand-new legal sector evolving around what may be the single most-versatile and commercially useful plant species: cannabis. Investment opportunities here will germinate over a span of decades.
Indeed, our latest Investor Pulse Poll (on the Stockhouse homepage) asks Stockhouse investors to identify their favorite niche in cannabis. Here are the current numbers, and we will be publishing and reporting final results in next week’s edition of Buzz.
Vote now to share your opinion on the most prospective niches of the cannabis sector.
Outside of technology, here are a few companies in other out-of-favor sectors that are presently generating the most activity on the Stockhouse Bullboards. A new name is challenging Bombardier Inc for top position as the most popular industrials stock at Stockhouse: Radient Technologies Inc. (TSX: V.RTI, OTCQB: RDDTF, Forum). RTI has surged in recent weeks (on higher volume), but issued a release stating it is “unaware of any material change”. Stock hounds may be suspecting that there is some fire behind the smoke here.
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In mining, Stockhouse favorite Novo Resources Corp (TSX: V.NVO, OTCQB: NSRPF, Forum) is currently an out-of-favor stock in an out-of-favor sector. The share price is off sharply in recent weeks, despite the general enthusiasm that still surrounds its Pilbara gold discovery. Contrarians may smell opportunity here, but investors clearly need to do their due diligence.
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Whether you’re an enthusiastic cannabis investor, loading up to take advantage of the New Cannabis Rally, or a Contrarian seeking out the best value opportunities, Stockhouse is the place to be for small-cap investors. Come for the information and coverage on Canadian (and American) small-cap companies, stay for the discussions and debates on the Bullboards.
Investors wanting to keep tabs on the Bullboard leaders and news for all of the groups being covered can go to our Trending Newspage for all the latest information on the sectors that matter most to you.
FULL DISCLOSURE: Enerdynamic Hybrid Technologies is a paid client of Stockhouse Publishing.