In a Sea of Red, a Canadian Supply-Chain Stock Comes Out on Top

(Bloomberg) -- A company that makes software to track supply chains is the best performing stock in a rout that’s lopped almost 30% off Canada’s S&P/TSX Composite index.

Ottawa-based Kinaxis Inc. provides supply-chain-management software -- crucial amid the havoc caused by the coronavirus pandemic on global shipments. Its customers include companies such as Ford Motor Co., and Unilever NV.

The stock has dropped about 2.7% from Feb. 20, when Canadian stocks were at a record high, and is still up 6% this year, bucking the losses in the rest of the market’s tech index, including Shopify Inc., which is down 12% in 2020.

Management notes that supply chain disruptions in the past have led to potential new sales as “companies realize that they are unable to quickly adapt to changing conditions with their existing solutions,” Stephanie Price, an analyst at CIBC World Markets, said in a March 9 note.

The company headed into 2020 with its backlog up 43% on the year, Price said. It also has an 18-month sales cycle into large corporate clients which is unlikely to be derailed by a short-term disruption from Covid-19, she added. Price has a C$125 ($89) 12-month price target on the stock, up from C$106.62 at 1 p.m. in Toronto.

Kinaxis has 12 buy ratings, with no hold or sell recommendations, according to data compiled by Bloomberg.

To contact the reporter on this story: Jacqueline Thorpe in Toronto at jthorpe23@bloomberg.net

To contact the editors responsible for this story: Derek Decloet at ddecloet@bloomberg.net, Divya Balji

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