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Canada’s top five communications sector bets for 2024


Don’t look now but the Canadian telecommunications sector is a hot bet this year. According to a report from PwC last year, the Canadian telecoms space alone is set to outpace its international peers in terms of investment, meeting increasing Canadian consumer expectations, as the country becomes more digitalised by the month.

But beyond that, North American exchanges play host to a diverse range of high quality Canadian communications companies it is worth catching in 2024, of all shapes and sizes. They go beyond conventional telecoms plays into areas like online gaming and sophisticated e-commerce. While the NASDAQ might be the first port of call for investors interested in tech plays this year, Canada can no longer be safely ignored.

1. IMAX Corporation [NYSE:IMAX]

We’ve already written about the sheer quality offered by over-sold IMAX Corp. Shares are surprisingly down 24% for this cinema group since its last filing. We have written recently already about IMAX and its ambitions in Asia, and the potential growth market offered by China for the Canadian corporation. The company still needs to get a grip on its news flow and get something bullishly positive out into the market, but its fundamentals still look very solid. Its core metrics measure up very well against close peer AMC in the US.

Other stocks to watch if you like IMAX: Reservoir Media [NASDAQ:RSVR]

2. MDF Commerce Inc [TSX:MDF]

Tech stock MDF Commerce (mdf commerce for purists) is a SaaS developer which optimises and accelerates commercial interactions between buyers and sellers. The company has a market cap of CAD 169m and a PE ratio of 32x. It used to trade under Mediagrif Interactive Technologies, but changed its name in 2020. MDF Commerce still reported a Q2 net loss on 7 November last year, but that was significantly down on the same period last year, and to be honest it looks like it will shortly be in profit.

Other stocks to watch if you like MDF Commerce: Yellow Pages [TSE:Y]

3. East Side Games Group [TSX:EAGR]

Microcap East Side Games Group has been rallying recently, trading up 22% in the last six months. They operate in the red hot mobile games market and have recently been celebrating the success of Bud Farm: Munchie Munch, which has been East Side’s most successful launch in terms of retention metrics in the 13 year history of the company. Bud Farm: Munchie Munch smashed industry standards with over 60% day one player engagement, and 15% after 30 days on the market. It launched on 1 October and has more than tripled its daily active users. The small games company has also announced a share repurchase program.

Other stocks to watch if you like East Side Games Group: Roblox [NYSE:RBLX]

4. EQ Inc [TSXV:EQ]

EQ is active in the media buying market, where they have deployed a proprietary, programmatic media buying platform. This lets companies buy targeted media to influence customer behaviour. It also owns LOCUS, which is an automated data processing tech platform used for managing data at scale. Throw in a cloud-based marketing platform that uses card linking technology, and EQ starts to look like a very interesting company indeed, positioned to benefit from the exponential growth in Big Data over the next five years.

Other stocks to watch if you like EQ: VerticalScope [TSX:FORA]

5. Stingray Group [TSX:RAY.A]

Shares in Stingray Group have been soaring, up 43% since its last filing. Stingray has a market cap of CAD 477m and a relatively low PE of 11x, which is frankly staggering. It manages a range of curated multimedia channels including Stingray Music, Stingray Naturescape, and Stingray Festival 4K. These are just a few of its massive array of streaming channels. The innovation never seems to stop: Singing Machine and Stingray just announced they debuted an automotive karaoke experience at the Las Vegas Consumer Electronics Show.

Other stocks to watch if you like Stingray Group: Corus [TSX:CJR.B]

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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