Firan Technology Group (TSX:FTG) and Sangoma Technologies (TSXV:STC) are two undervalued 5G technology stocks with high growth projections on the TSX. Sangoma and Firan stand to profit excellently from the Huawei security controversy and the 5G rollout.
Canadian-based suppliers have a clear advantage over Chinese technology manufacturers. Many countries, including the United States, have banned Huawei components in 5G equipment.
The Canadian Security Intelligence Service (CSIS) and the Communications Security Establishment (CSE) have still not determined whether Huawei equipment should be replaced or merely inspected for threats.
Regardless of the final decision regarding existing equipment, new equipment is unlikely to include parts manufactured in China. Thus, Canadian technology suppliers like Firan, especially, and even Sangoma can use this opportunity to increase production and long-term market share.
Canadian investors should look into major suppliers to Tier 1 telecommunications firms. These stocks are likely to experience substantial boosts in revenue and a similar appreciation in stock value.
Firan Technology Group
Firan Technology Group leads the North American market in manufacturing circuit boards and display systems. The company doesn’t only build for telecommunication giants; it also caters to other highly sensitive markets with unique security needs: medical, avionics, and military.
In the past year, the stock price of Firan has increased by nearly 64%. At $3.68 per share at writing, shareholders are still undervaluing the stock. Firan’s price-to-earnings ratio is only 12.5, which is comfortably lower than the industry average of 15.5.
A low price-to-earnings ratio means that you’re paying relatively less for each dollar of earnings than what is average for the industry. You’re essentially getting a discount compared to the going rate for corporate earnings in the stock market.
Sangoma produces cloud-enabled Unified Communications (UC) and Voice over Internet Protocol (VoIP) solutions. The company supplies businesses with critical phone line systems, and 5G expands how customers can connect to the phone system.
Last week Sangoma reported a 41% growth in profit from the same quarter the previous year. As a Venture Exchange-traded stock, more established attention-grabbing headlines may be overshadowing revenue growth at Sangoma. Because it’s still an understated stock, now is the perfect time to buy shares.
As of writing, the stock is trading for $2.11 per share, up $0.61 since October, when I first recommended the stock. If you haven’t picked up shares yet, it may be a good idea to start researching this stock, as the share price should continue appreciating along with earnings.
Canadian investors can easily pick out fantastic technology stocks to boost their retirement portfolios. It may seem scary to make these big financial decisions on your own, but learning to read financial data and make sound investing decisions isn’t difficult at all.
Stocks like Sangoma and Firan are perfect because they are both very cheap. An investor can pick up one hundred shares of both Sangoma and Finaran for only $579!
The potential upside on these stocks is far more substantial than the downside. Underpriced technology stocks like these are better than risking your money on highly volatile and overpriced technology stocks like Shopify.
Every Canadian should consider purchasing high-growth technology stocks to add to their Tax-Free Savings Accounts and Registered Retirement Savings Plans.
- Retirees: How to Boost Your CPP Pension
- WARNING: Canada's Housing Bubble May Pop in 2020
- Generate $1,000 in Monthly Passive Income With Just $100,000 Capital
- Canada Revenue Agency: 1 TFSA Mistake That Could Get You in Deep Trouble
- Top stocks for 2019
- Two New Stock Picks Every Month!
Fool contributor Debra Ray has no position in any of the stocks mentioned. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Shopify and Shopify. Shopify is a recommendation of Stock Advisor Canada.
The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool Canada’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Motley Fool Canada 2019