Investors that bet on a handful of Canadian junior-resource, marijuana and technology stocks were rewarded with big triple-digit returns last year, far outpacing the double-digit gains on the broader U.S. markets and the more mediocre result of Canada's benchmark index.
The average share price of the Venture 50, the TSX Venture Exchange's annual list of the top 50 performing companies across five sectors, was up a whopping 279 per cent in 2017. That compared with a 19-per-cent increase in Wall Street's S&P 500, a 28-per-cent jump in the Dow Jones industrial average and a 6-per-cent rise in the S&P/TSX Composite index last year.
The Venture 50 – which weighs companies by share-price appreciation, growth in market capitalization and trading volume – includes the clean-technology and life-sciences sector (which includes cannabis companies), diversified industries (such as bus, packaging and food companies), mining, oil-and-gas and technology. The average market capitalization among the Venture 50 soared 631 per cent in 2017.
The Venture 50 list, which has historically been heavily weighted to mining stocks, has now evened out to include a higher performance in other sectors, such as technology and cannabis.
"For the first time ever, the performance across all five industry buckets has been relatively uniform … which demonstrates the broader health of the venture market," said Brady Fletcher, managing director of the TSX Venture Exchange.
Still, mining dominated this year's list. The winner across all categories was Vancouver-based junior-mining exploration company Garibaldi Resources Corp., which saw its share price soar 1,722 per cent last year. Legendary Canadian mining investor Eric Sprott was an active buyer of the stock in 2017 and now holds about 16 per cent of the company's shares.
Garibaldi, which has projects in B.C. and Mexico, saw its market capitalization increase 2,351 per cent to $238.3-million last year. The company's strong performance helped the mining sector take the top spot for both average share price and market-cap performance on the Venture 50 list.
The 10 best-performing companies in mining on the TSXV saw their share prices rise by an average of 440 per cent and their market cap grow by 987 per cent. Other companies on the list included Novo Resources Corp. and Metallis Resources Corp.
Mr. Fletcher says this year's mining list is more diversified and with a clean-technology bent, including lithium and cobalt companies whose metals are used in products such as electric vehicles.
"That's representative of how this market does foster some very big technological evolutions," Mr. Fletcher said.
The technology sector was the second-best performer by share price, up 326 per cent, clean technology and life sciences rose 244 per cent and energy was up 199 per cent. Diversified industries were up 183 per cent, driven by top performer Radient Technologies Inc., which does business in the cannabis industry.
Mr. Fletcher says cannabis and blockchain companies first made the Venture 50 list in 2016. Cannabis companies dominated the latest Venture 50's clean-technology and life-sciences category, which saw its market cap increase 244 per cent in 2017.
BTL Group Inc. is the only pure-play cryptocurrency stock on the latest list, as part of the technology category. Vancouver-based BTL, which develops blockchain technologies, saw its share price rise 975 per cent and its market cap grow by 1,280 per cent last year.
To date, none of the companies on the latest Venture 50 list have graduated to the Toronto Stock Exchange. One company in the technology category, NYX Gaming Group Ltd., was acquired by Scientific Games Corp. last month.
Since the Venture 50 was launched in 2006, 73 companies on the companies listed have been been acquired and 91 have graduated to the TSX.