Last month was an exciting one for the TSX Index. Tech stocks gained, energy stocks slipped, and financial stocks stumbled as the U.S. banking crisis led to concerns about Canadian banks. The momentum was broadly negative, with the index slipping 2.3% for the month, but there were pockets of strength in the month of March 2023. In this article, I will explore the three biggest market movers on the TSX last month.
Q4 Inc
Q4 Inc (TSX: QFOR) was by far the biggest TSX gainer in the month of March, having risen 64% in a mere 31 days. According to the Globe and Mail‘s data, this was enough to eclipse what any other company managed to achieve that month.
Why did Q4 have such a good month?
One factor might have been its earnings release. Q4’s fourth quarter earnings release beat analysts’ expectations by a few cents per share, with smaller losses than were expected. On the other hand, revenue missed by several hundred thousand dollars, growing 11.8%, so it wasn’t a total slam dunk.
One factor that may have helped Q4 in Q4 (pardon the pun) was the banking crisis. In March, several banks went bust, leading to worries across the industry. Q4 sells customer relationship management software for banks, so investors may have felt that its products would become more useful as banks scrambled to retain panic-stricken customers. Whatever the cause was, QFOR had an incredible run in March.
Nuvei
Nuvei Corporation (TSX: NVEI) was the TSX’s second biggest gainer in March, booking a 28% gain. Much like QFOR, NVEI’s March rally might have had something to do with the banking crisis – though in this case, we can say that with a much higher level of certainty.
Basically, the banking crisis helped lift the prices of financial technology stocks like Nuvei because customers pulled their money out of banks and put it into alternatives. Cryptocurrencies were among the biggest gainers. Bitcoin seemed like a logical choice for depositors to put their savings in, because it is similar to a currency but can’t “fail” like a bank can. Bitcoin is simply a digital asset; it has no company propping it up. As long as people are using Bitcoin, Bitcoin exists.
How does this benefit Nuvei? It’s pretty simple: it’s a payment platform that accepts Bitcoin, among other things. In order to use Bitcoin in an actual store, you need to have it on some kind of platform that can be connected to a point of sale terminal. Nuvei offers such a system, as well as a banking service, so it should come as no surprise that it gained when people were worried about the state of the big banks.
Equinox
Last but not least, we have Equinox Gold Corp (TSX: EQX). Equinox is a company that mines for and sells gold. It owns productive gold mines in Brazil, Mexico City, and the United States, where it mines between 550,000 and 625,000 ounces of gold per year. Its most recent quarter was not a big success, with significant declines in revenue, operating income, and net income. However, the price of gold rose 6.5% in the month of March, which helped to lift EQX stock even when its most recent earnings release was underwhelming.
