CLS:CC - 3 Small Tech Stocks Providing Big Returns for Investors
2024-02-13 16:50:00 ET
Many tech stocks have been beaten down in the market in the last year or so. I wouldn’t blame investors for wanting to take a step back and look elsewhere. However, there are many Canadian stocks that have actually done quite well, beating the market and creating significant returns for investors.
That’s why today, we’re going to think ahead. Instead of worrying about the current volatility, think about the returns you could get from small-cap tech stocks that have given big gains. What’s more, these are tech stocks that could provide long-term gains by investing when the market is down.
Celestica
Celestica ( TSX:CLS ) is one of the top performers among tech stocks in the last year. Shares are currently up 186% as of writing, thanks to its growth as a multinational electronics manufacturing services company. The company may have started out as a subsidiary of IBM but has since evolved into a leadership role, especially in the field of supply-chain solutions.
As Celestica stock has adapted to evolving market dynamics, revenue growth has come right along with it. The company recently reported 9.81% growth in revenue year over year, reaching $7.96 billion in revenue for the year. This success, in particular, comes from creating long-term contracts with some of the biggest and best tech firms out there.
What’s more, Celestica stock is still growing. Its positive free cash flow allows the tech stock to invest further in research and development. This all adds up to a strong long-term strategy that should provide strong momentum in 2024 and beyond. The stock now projects it will reach between $2.025 to $2.175 billion in revenue for the first quarter, with adjusted earnings per share (EPS) between $0.67 and $0.77. Yet with a market cap at $6.2 billion, it’s still a small-cap stock you can grab for strong value trading at 19.05 times earnings as of writing.
CGI
Another top tech stock in the small-cap sector is CGI ( TSX:GIB.A ), a company that’s become one of the largest IT services firms around the world. Further, it continues to become even larger thanks to strong organic growth and strategic acquisitions.
The tech stock offers a wide range of IT services, creating long-term contracts with stable institutions. These include governments, financial services, healthcare, telecom and more. Given its global presence, this provides investors with a diverse range of services that help the company keep up its strength in any economic scenario.
CGI stock is likely to continue its dominance as a key player in the tech services industry. There continues to be ongoing demand for these services, especially with the introduction of artificial intelligence (AI). This is made clear from its earnings, with the tech stock reporting revenue growth of 11.1% during the last year, hitting $14.3 billion. And with shares up 23.5% in the last year alone, it’s another strong winner for your portfolio.
Descartes Systems Group
Another small-cap stock at $10.11 billion, Descartes Systems Group ( TSX:DSG ) is the last on this list among tech stocks to consider. DSG stock focuses on logistics and supply-chain management software solutions, making it a key consideration as we continue to struggle with demand. What’s more, it’s become a global leader in the industry, providing cloud-based platforms and services and streamlining services.
The tech stock is also a global leader, providing diversification as well as end-to-end solutions for various industries, business sizes, and locations. It’s done so well, in fact, that recently, it reported record revenue of $144.7 million, up 19% from the third quarter of 2023. While it didn’t provide an outlook, investors will want to keep their eye out for full-year reporting in the near future.
Shares of the small-cap tech stock are now up 21% in the last year, again making it a clear winner. However, shares have dropped after the company reported earnings per share that came in lower than the quarter before. So, it may be a great time to pick up the stock on the dip, before it climbs back once more.
The post 3 Small Tech Stocks Providing Big Returns for Investors appeared first on The Motley Fool Canada .
Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends CGI and Descartes Systems Group. The Motley Fool has a disclosure policy .
2024