One of the most exciting industries to invest in at the moment in my opinion is the financial technology industry.
As technology advances I expect the financial industry to become more open to disruption, giving fledgling businesses the opportunity to capitalise on an extremely lucrative market.
Three fintech shares at the top of my watch list right now are as follows:
Afterpay Holdings Ltd (ASX: AFY)
This payments company currently provides over 3,100 retailers with the ability to offer an interest-free buy now, pay later service online and in-store. Afterpay bears the default risk in exchange for a small commission on the transaction. Its customer numbers have been growing at an incredible pace and include the likes of Myer Holdings Ltd (ASX: MYR), Telstra Corporation Ltd (ASX: TLS), SHOWPO, and Super Retail Group Ltd (ASX: SUL). As bright as its prospects may be, I would suggest investors hold off an investment until its merger with Touchcorp Ltd (ASX: TCH) shows signs of delivering on its promise.
ChimpChange Ltd (ASX: CCA)
So far in 2017 the shares of this US-based digital banking company have risen a massive 43%. This gain is largely the result of the company’s strong growth in both customer numbers and total transaction value. The company added an impressive 41,000 customers during the first-half of FY 2017. This jump in customer numbers helped the company post an 85% increase in total transaction volumes in February. Thanks to a range of new features in its pipeline, I think ChimpChange is in a great position to continue growing strongly for the foreseeable future.
Class Ltd (ASX: CL1)
Thanks to a 26% drop in its share price in the last six months, this self-managed super funds software provider’s shares could be in the buy zone today. In February the company reported a 31% jump in half-year revenue to $14 million and a 28% increase in net profit after tax to $3.6 million. Last year just 28.2% of SMSFs were being managed in the cloud. With the migration to the cloud gathering pace, I believe Class is in a great position to profit. After all, the company commands a 68% share of the cloud market and captured 80% of all SMSF migrations to the cloud in FY 2016.
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 James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of Class Limited. 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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