Australia is not exactly known as a tech investor's paradise – more of a miners' and bankers' Elysium. There are plenty of technology companies out there, unfortunately they are usually heavily followed by the market and often highly priced.
Here's my take on whether these 3 companies are an opportunity:
REA Group Ltd (ASX: REA)
REA Group is an online property portal with businesses in Australia, Southeast Asia, the USA, and India. Most of the company's earnings come from Australian websites realestate.com.au and the like, where the business has been maturing and earnings growth has been slowing in recent years.
With its international operations, REA has the potential to become much larger over time and today's share price likely accounts for some of that. I like the business, but would want to investigate its competitive position further (especially in overseas markets) before considering a purchase.
Aconex Ltd (ASX: ACX)
Aconex is project management software designed to improve efficiency and communication between stakeholders in construction projects. So far, the company has proved divisive, with some investors loving it and others choosing to short-sell it (betting that shares will fall). I think it is an interesting premise, with the attractive economics of a software company and the ability to grow much larger over time.
However, I am sceptical of the company's price given the sort of growth it has been achieving recently. I am taking a 'show me' approach, with the possibility of buying shares later as the business grows.
Carsales.Com Ltd (ASX: CAR)
Carsales owns carsales.com, Australia's biggest vehicle sales website. The company also owns a variety of other classifieds websites, as well as a vehicle inspection, auto finance, and tyre selling business. The 'vertically integrated' approach to selling vehicles has delivered mostly positive results so far, with robust growth in the associated businesses.
Unfortunately, the core classifieds business has not been growing as rapidly, and it could be years before the company's international operations can take up the slack. I sold my Carsales' shares a while ago, feeling that they were overpriced for what the business was achieving.
