The Motley Fool

Here’s how to find the next big tech stock

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:

source: Xero presentation/ Clare Capital

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:


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.

NEW. The Motley Fool AU Releases Five Cheap and Good Stocks to Buy for 2020 and beyond!

Our experts here at The Motley Fool Australia have just released a fantastic report, detailing 5 dirt cheap shares that you can buy in 2020.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading over 40% off its high, all while offering a fully franked dividend yield over 3%...

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click here or the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.


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.