(Every week, Business Edge columnist Gyle Konotopetz profiles the top three stock picks of one of Canada’s most accomplished investment pros.)
FEATURED PRO: Brian Purdy has been a technology analyst since 2001 with Calgary-based investment firm
Acumen Capital Finance Partners (www.acumencapital.com).
Acumen Capital provides research on small-cap companies in the technology and industrial sectors.
Purdy’s Perspective: “In technology stocks, the performance will be in very specific areas where product growth is occurring. Management teams are coming around to the fact that profitable growth is the ideal.
“In telecom, it’s going to be the meat-and-potatoes areas that do well, such as basic telephone service, wiring, Internet service and cellular services.”
* Aastra Technologies (AAH-TSX)
* Recent Price: $17.80.
* 52-Week Range: $14-$25.25.
* Purdy’s Call/12-Month Target: Buy-$28.
* Snapshot: Aastra spends a lot of time on the phone, developing and marketing telecom products such as phones, digital modems and decoders.
* CEO: Francis Shen.
* Head Office: Concord, Ont. (72 employees).
* Vital Stats: Current Price/Earnings Ratio, 9.2; Revenue (last 12 mos), $195.7 million; 5-Yr Revenue Growth, 75.9%; Profit (last 12 mos), $23.8 million; Market Cap, $300.48 million; Shares Outstanding, 16.88 million.
* Purdy’s View: “Aastra has done an excellent job of recognizing that the market wasn’t going to show a lot of growth and they’ve managed the cost side of their business well.
“Most of their growth is going to come from product-line acquisitions, which they’ve been able to make with cash from their business. They have a large amount of cash on their balance sheet.”
* Purdy’s Risk Rating: Low.
* Web watch: www.aastra.com
* NovAtel Inc. (NGPS-Nasdaq)
* Recent Price: $3.10.
* 52-Week Range: $1.76-$5.20.
* Purdy’s Call/12-Month Target: Buy-$4.65.
* Snapshot: NovAtel seldom gets lost. The company designs, markets and supports a broad range of products that determine precise geographical locations using global positioning systems.
* CEO: Jonathan Ladd.
* Head Office: Calgary (113 employees).
* Vital Stats: Current Price/Earnings Ratio, 22.1; Revenue (last 12 mos), $33.58 million; Profit (last 12 mos), $1.5 million; Market Cap, $23.8 million; Shares Outstanding, 7.7 million.
* Purdy’s View: “Their background is in serving the aerospace industry, which is typically very volatile, but they’ve done a good job of diversifying into other areas to try and stabilize their revenue streams. They have about $1 of cash (per share) on their balance sheet.”
* Purdy’s Risk Rating: Medium.
* Web watch: www.novatel.com
* Intermap Technologies (IMP.A-TSX Venture)
* Recent Price: $2.35.
* 52-Week Range: $1.80-$4.20.
* Purdy’s Call/12-Month Target: Speculative Buy-$4.60.
* Snapshot: You won’t find these maps at your corner store. Intermaps are digital elevation maps that serve governments and industries worldwide and cover a million square kilometres of earth.
* CEO: Brian Bullock.
* Head Office: Calgary (122 employees).
* Vital Stats: Revenue (last 12 mos), $19.5 million; Profit/Loss (last 12 mos), $2.4 million loss; Market Cap, $12.58 million; Shares Outstanding, 5.35 million.
* Purdy’s View: “Some of their digital elevation models (maps) are used for military purposes so they are quite optimistic about the pipelines for government contracts down the road.”
* Purdy’s Risk Rating: High.
* Web watch: www.intermaptechnologies.com
* Disclosure: Acumen Capital has acted in financing and/or in an advisory capacity on behalf of NovAtel and Intermap in the past 24 months. Purdy says he does not personally own shares in the featured stocks.