Investing in Cybersecurity Across Canada

Canada is increasingly becoming an important hub for technology innovation. Ontario is always a stronghold for Canadian tech; meanwhile, the British Columbia tech market is also seeing growth.
Here’s a look at some key cyber companies from coast to coast.
 
 

British Columbia an emerging region for investing in cybersecurity

In 2015, British Columbia came into its own as a stronghold for small tech companies. For example, four of the year’s top ranking tech companies on the TSX Venture 50 list hailed from the the province. The list, released every year, takes into account market cap growth, share price appreciation and trading volume to determine the top stocks across a variety of sectors. British Columbia’s strong presence on this list is indicative of the region’s vibrant tech scene.
In particular, British Columbia has seen the growth of some very interesting cybersecurity companies. Take Absolute Software Corp. (TSXV:ABT) and Avigilon (TSX:AVO), for example. Both BC-based companies are making a big splash on the country’s cybersecurity scene.
Located in the heart of Vancouver, Absolute Software provides endpoint security and data risk management solutions. The company’s Persistence technology offers organizations visibility and control over their devices, regardless of the user’s location. Meanwhile, the company’s Absolute Data and Device Security product is an adaptive endpoint security solution that allows customers to maintain control over their mobile computing networks. These solutions are used in corporate, educational, healthcare, and governmental environments.
Over the past month, Absolute Software has seen a 21.37 percent growth in share price. It’s no wonder that stocks are rising for this company, as there is a significant demand in the marketplace. According to a survey that Absolute Software released in February, 33 percent of IT personnel surveyed admitted to successfully hacking their own or another organization. Meanwhile, 45 percent copped to knowingly circumventing their own security policies.
However, despite this non-compliant behaviour, investing in cybersecurity remains a top concern for companies. Specifically, 87 percent of respondents are expecting increased spending in security this year.

Avigilon does a little bit of everything, but it’s particularly strong in the cybersecurity space. Located not far from Absolute Software Corp, the company develops, manufactures, markets and sells HD and megapixel network-based video surveillance systems, video analytics and access to control equipment. Some if its offering include end-to-end product solutions, HD IP camera, network video recorders, and the RIALTO analytics appliance. All of the company’s products are assembled and tested in the Greater Vancouver suburb of Richmond, British Columbia.
Share price is strong for this company, and is currently trading at $14.96. Furthermore, the company has seen significant growth in the past while. Year to date, there has been a 9.56 percent increase in stock price and, in the past month alone, shares have skyrocketed 20.82 percent.
On March 1, the company released its fourth quarter and year end 2015 fiscal results. Last quarter, it saw record revenue of $109.1 million, representing a 37 percent increase over this period last year. Diluted adjusted earnings per share were $0.28, up from $0.25 the previous fourth quarter. Meanwhile, over the course of the year, the company saw a 36 percent jump in revenue to $369.4 million.

Investing in cybersecurity in Ontario

Meanwhile, on the other side of the country, Ontario is seeing some a vibrant cybersecurity as well as well. The province sees a combination of advocacy groups and compelling small-cap companies. Take, for instance, CyberTRAX Canada, an Ottawa-based syndicated research and development group focusing on Canadian cybersecurity, online privacy and open access issues. The presence of industry groups like this one helps to generate a strong sense of community amongst companies in this region.
Sandvine Corporation (TSX:SVC) is one such example. Located out of Waterloo, Ontario, the company is engaged in the development and marketing of network policy control situations for high-speed fixed and mobile Internet service providers. Products include Business Intelligence, Revenue Generation, Traffic Optimization and Network Security.
Recently, the company announced that Webbing, a mobile roaming solution for global businesses, has been using Sandvine’s Virtual Series in data centers across 170 countries. According to a recent study conducted by Webbing using Sandvine’s Business Intelligence products, only 25 percent of critical business traffic is being sent via VPM, leaving the other three quarters of traffic potentially vulnerable to malicious attacks. Furthermore, the average roaming business customer uses 168MB of data each day. These statistics indicate a clear need for Sandvine’s solutions. And although its recent growth isn’t as strong as its west coast cousins, the company has nonetheless seen a 6.07 percent rise over the past five days.
Meanwhile, VIQ Solutions (TSXV:VQS) is another Ontario-based cyber company that has seen meaningful growth in the past month. Share price has risen a whopping 35 percent since February. Click here to learn more about the company through an interview with CEO Sebastien Pare.
Therefore, both British Columbia and Ontario offer strong options for investing in cybersecurity. Really, it’s just up to the individual investor to determine which region is more suited to his or her investing requirements.
Securities Disclosure: I, Morag McGreevey, hold no direct investment interest in any company mentioned in this article.