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The Bear Market Can’t Touch This Canadian Tech Stock!

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The new economy is all about technology expansion. Especially in a downturn, corporations will be interested in pouring spare capital into innovative technologies to pump up their bottom line.

Much like grocery stores tried to cut payroll with capital investments into automated checkout machines, corporate leadership will use automation to reduce business costs.

Corporations are in a race right now to expand productivity and attract top technology talent. Those corporations which can innovate the fastest will be the best stocks to buy in 2019 and hold for the next 10 years.

Canada, in particular, is in a prime position to benefit from the new tech race. The U.S. trade war with China only helps Canada’s tech sector. Moreover, technology talent is becoming less competitive in Canada relative to the U.S.

The lower cost of living in Canadian cities like Ontario and Toronto versus Silicon Valley is driving technology startups to these cities and away from once-popular U.S. metropolitan areas.

TeraGo (TSX:TGO) is one of the top Canadian tech stocks to watch on the Toronto Stock Exchange as Canada’s technology sector continues to attract leftover investment capital.

TeraGo beats Canopy Growth as an investment

If Canopy Growth (TSX:WEED)(NYSE:CGC) can get away with negative margins and maintain a market cap of over $1 billion on the TSX, TeraGo is undervalued with a market cap of $162.69 million.

TeraGo is a small-cap tech stock in Ontario that has been quickly rising on the TSX. Specializing in cloud-based technology, data storage, and wireless solutions, TeraGo is benefiting from the high-growth in these markets.

Naturally, it is gaining brand loyalty by sacrificing profitability in the short-run to build a long-term sales pipeline. The company has been maintaining slightly negative margins to achieve its goals, but nowhere near the level of loss at Canopy Growth.

Thus, Canadian cannabis investors who know when to leave well enough alone in a bubble may want to shift their attention to small-cap technology winners like TeraGo. TeraGo is a prime stock to profit from today’s technology revolution.

The stock’s price has already moved up 10% in the past year – and it still has some room left to run in the next few years.

Foolish takeaway

Canada’s technology scene is the perfect haven in the 2019 bear market. As investors scramble to put their cash in defensive positions to guard against the financial market turbulence, aspiring Canadian retirees should look at the high-growth technology sector for alpha-level returns.

Taking a long-run view of your retirement portfolio is the key to success in today’s struggling stock market. It is the only way to overcome the fear surrounding news headlines warning of the next recession.

Brexit, disappointing geopolitics, and even the outcome of Canada’s elections this year can only have as much power over your ability to retire as you let it. There are excellent investments in the TSX if you know where to look.

TeraGo is one of these winners because it is situated strategically in the number one industry for 2020, where quick-growing demand is tightly constraining a less robust supply. Canadians can’t go wrong with this investment.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Debra Ray has no position in any of the stocks mentioned.

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