Small Cap Technology Stocks: A Conversation with Tom Liston (Board Member of WELL Health & Tantalus Systems)
Feb 21, 2025
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Join Tom Liston, an analyst-turned-family office manager, as he recounts his journey from small-town New Brunswick to investing in Canadian tech. He reveals how WELL Health Technologies aims to revolutionize healthcare through innovative tech solutions. Tom discusses challenges in small-cap investments and the importance of strong management teams. Discover insights into healthcare innovation with AI and the strategies behind successful software companies. His reflections on basketball remind us of resilience in both sports and investing.
Tom Liston's journey underscores the importance of networking and strategic education in overcoming initial challenges in the finance industry.
His transition from equity research to venture capital allowed for a focus on long-term value creation without the immediate pressures of public stock performance.
Through Well Health Technologies, Liston emphasizes the transformational role of technology in improving Canadian healthcare efficiency and patient outcomes.
Deep dives
Journey to Bay Street
Tom Liston shares his challenging journey from New Brunswick to Toronto's financial district, emphasizing the importance of networking in the competitive finance industry. Initially, he faced obstacles gaining traction due to a limited network but persevered through education, pursuing qualifications such as the CSC and CFA early on. His master's thesis on valuation in the TSX environment helped set him apart from peers, leading to multiple job offers upon graduation. Ultimately, he joined Yorkton, demonstrating that determination and strategic education can create significant career opportunities, especially in finance.
Experience at Yorkton
At Yorkton, Tom Liston experienced the thrill and challenges of working for a leading technology investment bank in Canada. The firm was involved in numerous significant deals, enabling him to work with a wide range of companies, from small to multi-billion dollar market caps. He found particular interest in technology and recurring revenue businesses, as they provided more predictable cash flows and growth potential. Tom's time at Yorkton solidified his passion for technology investment, setting the stage for his later ventures in equity research and venture capital.
Transitioning to Venture Capital
After years of successful equity research, Tom Liston transitioned into venture capital, further broadening his investment scope. He highlights the scrutiny that equity analysts face, especially regarding their research's impact on stock prices and management relationships. By moving into venture capital, he found a new way to engage with high-potential companies without the constant pressures and immediate consequences of public stock performance. This change allowed him to focus on long-term value creation, further enhancing his professional growth and network.
Transformative Acquisitions in Healthcare
Tom Liston discusses his strategic involvement with Well Health Technologies, particularly emphasizing its mission to address the inefficiencies in the fragmented Canadian healthcare system. The company has made several transformative acquisitions, such as CRH Medical and Ocean, which have significantly strengthened its market position and service offerings. These acquisitions were made with a focus on using technology to enhance healthcare delivery, improving patient outcomes while streamlining processes for healthcare providers. Through well-executed integration and innovation, Well Health has positioned itself as a leader in digital healthcare, driving positive change in the industry.
Navigating Investment Dynamics
Tom Liston provides insights into the challenges faced by Canadian small-cap companies, particularly as private equity firms increasingly acquire them. He illustrates how many companies struggle with being undervalued in the market, leading boards to consider premature sales to larger entities. Highlighting the importance of cultivating a supportive investor environment, he discusses the need for small-cap firms to demonstrate robust growth potential to avoid being sidelined. Tom passionately advocates for nurturing homegrown companies to ensure they benefit the Canadian economy and ecosystem in the long run.
In this conversation, Tom Liston shares his journey from a small-town upbringing in New Brunswick to becoming a prominent investor in Canadian small cap technology companies. He discusses his early career on Bay Street, his experiences at Yorkton Securities and Versant Partners, and his pivotal role in the growth of Well Health Technologies, and now Tantalus Systems.
KEY TAKEAWAYS:
Transitioning from equity research to his own family office opened new opportunities for Tom
The acquisition of QHR by Loblaw showcased the potential of healthcare technology
Well Health Technologies aims to improve Canadian healthcare through technology
This content is for informational purposes only, and should not be construed as offering of investment advice or stock recommendations. This content is based on the author's independent analysis and research and does not guarantee the information's accuracy or completeness. The information contained in this video is subject to change without notice, and the author assumes no responsibility to update the information contained in this video. All information contained herein this video should be independently verified with the sources and companies mentioned. The author is not responsible for errors or omissions. The author does not purport to tell or suggest which investment securities viewers should buy or sell for themselves. Those viewers seeking direct investment advice should consult a qualified, registered, investment professional. The author is not a professional or financial advisor, and does not provide financial advice. Viewers are advised to conduct their own due diligence prior to considering buying or selling any stock. The author will not be liable for any loss or damage caused by a viewer's reliance on information obtained in any of this content. It’s important to understand that investing involves risk, including loss of principal. The author is not engaged in any investor relations agreements with any of the publicly traded companies mentioned. The author does not receive compensation of any kind from any publicly traded companies that are mentioned in any of this content. The author has acquired and may trade shares of some of the companies mentioned through open market transactions and for investment purposes only. Refer to the “author’s ownership disclosure” where applicable. There may be affiliate links to Amazon, and other companies in which the author is compensated if any of the affiliate products are purchased from Amazon.ca/.com or any other companies.
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