Pacific Trader: Vancouver’s Wishpond Technologies could be more than just wishful thinking

Wishpond's sales chart does not at all resemble its stock's fever line. The company was able to grow revenue 55 percent year-over-year, to just over $5 million, in the second quarter.

Wishpond Technologies

The Vancouver digital marketing developer is growing sales exponentially

The stock: Be greedy when others are fearful, Warren Buffett famously admonished. Instead of taking the last of your spare change and tossing it into a fountain, a better strategy is to look for glints of hope poking through the rubble of 2022’s bear market that could pay off handsomely in the long run. One of them that recently came to our attention is Vancouver-headquartered Wishpond Technologies (TSXV:WISH), a micro-cap long shot with oodles of upside.

The drivers: Founded by CEO Ali Tajskandar in 2009, Wishpond has developed a digital marketing and sales platform targeted at small and medium-sized businesses. Though already a crowded niche, this proved timely with the onset of the COVID-19 pandemic. The company went public on the TSX Venture exchange at 75 cents a share in December 2020 and quickly shot up above $2 before succumbing to the technology (and eventually market-wide) downdraft this year. Shares were trading at 80 cents as of Tuesday’s close.

Thankfully, Wishpond’s sales chart does not at all resemble its stock’s fever line. The company was able to grow revenue 55 percent year-over-year, to just over $5 million, in the second quarter, accelerating its growth trajectory of recent years. Analysts are projecting full-year 2022 revenue of $21 million.

The company trimmed its net loss in Q2 to $855,065, compared to losses of $1.5 million over the same period in 2021. It’s also made five acquisitions since going public, most recently snapping up the referral marketing platform developer Viral Loops Technologies.

Word on the street: iA Capital Markets analyst Neehal Upadhyaya initiated coverage of Wishpond in September with a “buy” rating and $1.50 target, anticipating continued strong sales growth and positive cash flow from operations by the end of 2022. “WISH benefits from a seasonally strong Q4 as SMBs look to get ready for the holiday season by targeting consumers through their marketing strategies,” he wrote in a note to clients.

Coming & going: Burnaby-based Interfor Corp. (TSX:IFP) is buying Chaleur Forest Products from privately held Kilmer Group for $325 million in cash and assumed debt. Chaleur runs two sawmills and woodland operations in New Brunswick with annual lumber production capacity of 350 million board feet.