2 tech shares to supercharge your portfolio

Credit: Printed Circuit Corporation.

When looking at making an investment there are a number of industries to choose from on the Australian Stock Exchange. But I’m sure many investors will agree that few are as exciting as the information technology industry.

While most investors will have heard of tech shares such as Carsales.Com Ltd (ASX: CAR) and REA Group Limited (ASX: REA), there is more to Australia’s technology industry than just these great companies.

Two tech shares that I think investors should be better acquainted with are as follows:

iSentia Group Ltd (ASX: ISD)

iSentia is one of the world’s leading media intelligence companies and one of the most exciting tech shares on the ASX in my opinion.

The company provides media monitoring, tracking, and analysis services for some of the largest companies in the world. It counts Starbucks, Audi, HSBC, and Nestle amongst its client list of more than 5,500 companies.

The share price took a beating in February despite the company reporting a 22% increase in underlying net profit for the first six months of the 2016 financial year.

This means the share price is down 26% year-to-date and at a great entry price for investors on the look out for bargains.

According to CommSec, analysts expect earnings to grow at an average of 40% per annum for the next couple of years. If this turns out to be the case, then the share price might not stay at this low level for very long.

Technology One Limited (ASX: TNE)

Technology One shareholders will be delighted to have seen its share price rise by 14% since early in March.

The company’s software powers over 1,000 leading corporations, government departments and statutory authorities. This ever-increasing client list is one of the key reasons Technology One has grown its revenue each year for a whopping 10 consecutive years.

Its shares may be priced at 37x estimated FY 2016 earnings, but the company is expected to grow its bottom line by over 17% per year for the next couple of years. I believe this level of growth and its incredibly consistent top-line performance justifies paying a premium for the company’s shares today.

Despite the great gains from Australia’s largest enterprise software company in the last six weeks, its share price is only just in positive territory this year. This could be a clear indication that the share price still has further to climb.

I believe these two shares would be great additions to a balanced portfolio.

Foolish takeaway

Tech shares are exciting investments, but not for the faint-hearted. In my opinion investors should be prepared for many ups and downs along the way and resist panicking at sudden drops. In the long-term both these shares should produce handsome rewards for patient investors.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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