Now that we’re all way more connected than we need to be, technology companies have turned their attention to our devices, creating sophisticated networks that will make up the so-called Internet of Things (IoT).
Most of this activity is going on in Silicon Valley, of course, but Canadian portfolio managers have begun taking notice of a few small caps here at home that could prominently figure in the machine chatter of the future.
Here are a few of their favourites.
Reliq Health Technologies Inc.
Bruce Campbell at StoneCastle Investment Management Inc. likes this Vancouver-based service provider, which connects to health sensors in the home in order to track a patient’s vital signs. That data is then streamed in real time to health-care workers.
If that sounds creepy, try to imagine an elderly relative who’s living alone and prone to medical episodes. Reliq monitors vital signs such as blood pressure and blood sugar levels, and can even remind patients to take their medication through a voice-enabled Alexa-style interface.
The idea is to help hospitals cut down on expensive re-admissions, and Reliq has already made strides selling to health authorities in the U.S., recently breaking through to profitability.
Canada’s public health-care system will be harder to penetrate, but a pilot project serving First Nations communities is already in the works, and Campbell thinks Reliq’s innovative offering could soon garner a lot of attention.
“They’re focused primarily in the U.S., and they’ve just gotten to the point where they’re profitable now,” he said. “As they continue to ramp that up over this year, I think more people will come to discover it.”
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BeWhere Holdings Inc.
Campbell also likes a Toronto-based company called BeWhere, which sells tracking devices that keep tabs on equipment for mobile operations such as fleets of ambulances, trucks and construction vehicles.
BeWhere’s system ensures every piece of equipment is on board, giving fallible human employees the green light before they drive off to a remote job site only to realize they’ve forgotten the necessary tools to do the job.
The company isn’t profitable yet, but it has landed a couple of major clients, including Brink’s Co. armoured trucks. It has also moved from Wi-Fi-reliant Bluetooth networks to low-power chips that directly connect to cellular networks.
BeWhere has already begun the process of registering with U.S. wireless service providers, which have only recently built networks that would enable the rapid adoption of these types of services.
Siyata Mobile Inc. (SIM)
Siyata Mobile is another company catering to mobile operations, but it aims to connect the operators and vehicles rather than pieces of equipment.
Campbell calls it an evolution of the push-to-talk cellular networks — once popular with cab drivers and industrial workers — that goes beyond mere voice communication to create smart dashboard consoles designed for specific industries.
For example, long-haul trucks could share information with central dispatch on the condition of the engine and how long the truck has been on the road, while providing the driver with GPS navigation and direct communication with other vehicles.
Siyata is also working with wireless service providers in the U.S. to create a dedicated network called FirstNet for first responders, which would give police, ambulances and fire departments priority communications during an emergency.
“This FirstNet network is just being set up in the U.S. now, so it’s probably going to be a couple of years to really build this out,” Campbell said.
Absolute Software Corp.
David Barr, chief executive and portfolio manager at PenderFund Capital Management, is keeping an eye on this Vancouver-based cybersecurity company, which provides a relatively simple service: helping consumers track the location of their smartphones and other mobile devices.
It’s not groundbreaking technology, but Barr said Absolute has enormous unrealized potential.
“They have their technology installed on a billion devices,” he said, “but the number of companies that actually are using it today is much smaller. And that speaks to the huge growth opportunity they have.”
Absolute’s share price has moved sideways for the past five years, but a new interim chief executive, Steve Munford, comes with impressive credentials from his time at Sophos Group PLC, an established cybersecurity player in the U.K.
Barr thinks the introduction of an interim exec such as Munford could capitalize on all those deactivated smartphones, and even set Absolute up for an acquisition in the near term.
“When you have interim CEOs and CEO changes, a lot of times it will start a process to sell the company,” he said. “So this is a company that we might be talking about it today and it might be sold tomorrow.”
Kinaxis has a market cap of around $2 billion so it’s not exactly flying under the radar, but Tyler Hewlett at BMO Asset Management reminds investors that it’s all relative.
“It’s not super small for Canada,” he said, “but this is a company with global expertise, and it’s still fairly unknown from a U.S. investor perspective.”
The company, which provides end-to-end supply-management solutions, has already landed 100 clients, including giants such as Toyota Motor Co., Ford Motor Co. and Honeywell International Inc., and it’s been growing organically — and profitably — at 25 per cent per year.
Hewlett, however, thinks Kinaxis has plenty of runway for growth, with thousands of global clients that could make use of the company’s logistics software.
“It’s not impossible that they could keep up 25-per-cent-type growth rates for a very long time,” he said.