Who doesn’t wish they had invested in Google (NASDAQ: GOOG) or Microsoft (NASDAQ: MSFT) when they first became publicly listed corporations? While there are always risks associated with investing in new technologies – particularly from a valuation perspective as tech stocks regularly trade well above a conservative assessment of value based upon current earnings – for investors prepared to take a big picture view, what looks expensive becomes a big bargain with hindsight.
While Australia hasn’t bred many successful tech start-ups, we do have some very exciting prospects.
Moko Social Media Ltd (ASX: MKB) is one such firm that has grabbed investors’ attention, particularly given its similarities to social media giant Facebook Inc (NASDAQ: FB), which also began life as a platform for university students. In the past few months Moko has made significant strides forward in its aim to provide mobile social community platforms to select audiences such as university college students in the USA.
Meanwhile tech stock MOBEMBRACE FPO (ASX: MBE) has caught the attention of broker Bell Potter. Mobile Embrace aims to provide mobile payment and marketing solutions for firms. Bell Potter certainly likes the sound of the company’s plans given the rapid rise in mobile internet usage. The broker has recently initiated coverage of the stock with a ‘buy’ recommendation and a 12-month price target of 32 cents for the stock, which is 23% above its current price.
Avid tech geeks are no doubt aware that Twitter co-founder Jack Dorsey has moved on from the social media platform he helped create to focus on a new project. That project is a new mobile payment solution called Square. It’s an increasingly crowded space and the ASX has its own listed equivalent called Mint Wireless Limited (ASX: MNW). Mint has developed a device which attaches to a mobile phone, instantly turning it into a mobile payment device capable of accepting credit and debit cards for payments.
It’s interesting that all three tech stocks are positioning themselves to benefit from the growth in mobile internet usage. As early movers, each of these innovative technologies could potentially snare market share in the rapidly growing mobile sector. It’s a competitive field of course and picking winners is hard, however buying in early and riding a winner certainly makes this sector worth watching.
5 stocks under $5
We hear it over and over from investors, "I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" And it's true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.
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