Recently a small NZ corporate advisory firm, Clare Capital, sent out an interesting post about promising tech companies to their subscribers.
Software company XERO FPO NZX (ASX: XRO) subsequently borrowed the announcement for their Annual General Meeting (AGM) presentation yesterday, and I think it could prove a fertile hunting ground for those looking for the next big technology investments:
You can click to enlarge the above image, or find the original on page 32 of Xero’s AGM presentation yesterday.
The size of each company’s circle represents the total revenue over the past 12 months, while the colour of the circle represents how fast revenue grew in those 12 months. My first port of call would be each of the small blue circles, which could provide fertile hunting ground for growth investors:
PUSHPAY FPO NZX (ASX: PPH)
Catapult Group International Ltd (ASX: CAT)
BPS Technology Ltd (ASX: BPS)
Redbubble Ltd (ASX: RBL)
Followed by the green circles, which grew between 30% and 45% in the past 12 months:
Webjet Limited (ASX: WEB)
Nextdc Ltd (ASX: NXT)
WiseTech Global Ltd (ASX: WTC)
Mitula Group Ltd (ASX: MUA)
One thing that this diagram doesn’t show is the price of each company. Some of the smaller blue circles appear to have prices that already bake in years of growth, discounting the risks. However, some of the fast-growing companies have miniscule market caps and appear largely overlooked by the market, which could give you an edge if you’re a little more adventurous.
It’s also important to remember that this diagram only shows one year’s results and doesn’t say anything about profitability or financial position. Even so, I think it will prove a useful tool hunting for the next promising investment idea.
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Motley Fool contributor Sean O'Neill has no position in any stocks mentioned. The Motley Fool Australia owns shares of PUSHPAY FPO NZX and WiseTech Global. 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.