Another Tech-Stock Trek to the North Country

Talk about a humbling week. After digging through the blizzard of responses to my Feb. 4 column, I now know that:

• About a hundred Canadian tech stocks have gone from 15 Canadian cents to C$15 in the past year, and
  
• I didn't own (or even know about) a single one.

So let's find the next batch.

But first, a couple of reader insights: On Canada's sudden emergence as Silicon Valley North, David Gomes notes that "In a far-flung country with a dispersed yet interdependent population, comprehensive connective infrastructures spanning great distances have been a prerequisite to Canadian survival. With one of the world's most literate, wired and multicultural populations, the emergence of a global networked environment as the next paradigm is a boon to Canada . . . This can also be a damn cold country, which means we have a long love affair with the telephone -- and now, all of its offspring."

Chris Green points out that currency risk cuts both ways: "With the recovery in the commodity markets and the Asian economies, not to mention a lack of wage pressures up here, there are only extra gains to be made by holding Canadian equities in Canadian dollars. [In other words], by buying a Canadian equity you will also be going long on the Canadian dollar, and that's a very good thing."

And here are five more good sites for researching Canadian stocks:

• www.canstock.com
  
• www.globalinvestor.com
  
• www.stockwatch.com
  
• www.stockhouse.com
  
• www.fin-info.com

Now on to some possible winners, starting with the recipient of, by far, the most reader recommendations, Waverider Communications (WAVC). This wireless Internet access company is expanding aggressively into Latin America, where it has contracts worth nearly C$30 million. It's run by former managers at Dell Canada, who are used to ramping up an operation quickly, and who are on record promising "announcements throughout the year on major contracts with major carriers. We're negotiating them right now."

Other stocks with vocal fans include:

Wi-Lan (WIN:Toronto), which holds the patent for a wireless standard called W-OFDM. It competes with a Cisco (CSCO)-backed standard called V-OFDM, though several readers believe Wi-Lan's technology to be the better solution. Despite a big recent run-up, its market cap is still modest by the standards of U.S. wireless leaders. The catalyst for the next move? Maybe some kind of link with Nortel (NT), Lucent (LU) or one of Cisco's other competitors.

DataMirror (DMC:Toronto) is a leader in data-integration software, which allows corporate customers to merge and exchange information from incompatible databases. In other words, if you're using UNIX and your customer is running Windows NT, DataMirror lets you swap files without headaches. For a glimpse of its potential, look at the valuations of U.S. competitors like Informatica (INFA) and Quest Software (QSFT).

DataMirror also owns a chunk of Silicon Valley start-up PointBase, which is developing a database management tool for laptops and handheld devices. Run by Oracle (ORCL) co-founder Bruce Scott, it might be one of the hot initial public offerings of 2001.

Paradigm Advanced Technologies (PRAV) recently nailed down a patent for using a satellite global positioning system, or GPS, to track people and things over cellular telephone networks. If it works, it has applications ranging from 911 callers to wayward kids and Alzheimer patients. The stock popped on the patent news, then gave back most of the gain. Now the question is whether the time is ripe (and the equipment sufficiently cheap) for this kind of service to go mass market.

Descartes (DSGX) is a leader in the order-fulfillment side of business-to-business. Its revenues are surging at triple-digit rates and its stock is way up. Tecsys (TCS:Toronto), meanwhile, was an undiscovered version of Descartes -- until it signed a wide-ranging partnership deal with IBM (IBM) on Feb. 14. But like all the companies mentioned here, the first big pop still leaves these two with valuations that are reasonable by U.S. standards.

And here are two more from e-commerce consultants and money managers Sundeep "Sunny" Jain and Dan Behroozi, the brains behind the Feb. 4 column:

Angoss Software (ANC:Vancouver) is a leader in data mining. Its high-profile partners include Micosoft (MSFT) and Seibel Systems (SEBL). "Gross margins are up to 94%, believe it or not," says Dan. "No insiders are selling despite the huge run-up. And there's a data mining conference in late February [at which Angoss will be showcased]."

Infointeractive (IIA:Toronto) has a patented Internet call management system that lets people screen calls while online, eliminating the need for multiple phone lines. The system is "getting accolades from everywhere, including Cisco. A high-level Cisco director is on their board, and it looks poised for incredible growth," says Sunny.

I've packed them in as tightly as possible, but this column still barely dents the list of hot little companies that readers have sent in. So if your favorite isn't here, keep the updates coming and look for another Canadian stocks column in a month or two.

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