Why the XERO FPO NZ share price is heading towards a 52-week high

The XERO FPO NZ (ASX: XRO) share price is moving back towards a 52-week high today on news reports that another respected U.S. venture capital fund has bought a 1.3% stake in the business.

The Australian Financial Review reporting that private investment group Technology Crossover Ventures is Xero’s latest Sillicon Valley-based investor after paying NZ$28.5 million for its stake in the business.

Although it is long way from turning a profit, Xero is one of the S&P/ASX 200’s (Index: ^AJXO) (ASX: XJO) largest and fastest-growing tech companies in terms of revenue growth and subscriber numbers, which explains why it readily attracts investment from venture capital type operators.

In Australia however more conservative fund managers have not been as keen largely due to the fact it is still posting enormous losses despite the strong topline growth.

Today shares in the cloud-accounting business are changing hands for $18.95 and were given additional impetus recently after the company announced it surpassed 1 million subscribers on its global accounting platform at the end of March 2017.

Over the past year the shares are up around 20% with the company to report its half-year numbers in around one month’s time.

At its last update the chief executive forecast that the company would turn cash flow positive within its current cash balance and many investors’ eyes will be focused on its progress towards meeting this forecast when it does reveal its latest financial results.

If the progress is reasonable and investors can see that the business is making concrete progress towards profitability I expect its share price could enjoy a strong second half to the year.

Other tech stocks on the ASX worth watching include logistics business Wisetech Global Ltd (ASX: WTC) and Technology One Limited (ASX: TNE).

A Big, Fat, Fully Franked Dividend

This company's dividend is almost the stuff of legends. Since it started paying dividends in 2007, it has increased its payout to shareholders every single year, a run that includes 21 consecutive dividend increases.

Based on the last 12-months of dividends, its shares are currently offering a fully-franked 4.8% yield, which grosses up to almost 7% when those franking credits are included. And in stark contrast to the likes of Commonwealth Bank and Telstra, this company just increased its dividend by over 13%, and guided for 2017 profits to grow by 20%!

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Motley Fool contributor Tom Richardson owns shares of Xero. The Motley Fool Australia owns shares of Xero and Wisetech Global.

You can find Tom on Twitter @tommyr345

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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