Last Wednesday, the ABS announced the September quarter Consumer Price Index rose only 0.6% and 1.8% over the year which was below market expectations.
The weak result lowers the prospect of the RBA increasing interest rates like other central banks have around the world. Consequently, the Australian dollar was sold off reaching new 3-month lows at US76.26 cents before closing on Friday at US76.75 cents.
With the NASDAQ closing at all time highs on Friday the bullish trend in technology stocks continues. While Australia does not have any technology companies like the FANG stocks (Facebook, Amazon, Netflix, Google (Alphabet)), there are smaller technology companies that have recently made new 52 week highs and will profit from a depreciating Australian dollar.
Altium Limited (ASX: ALU)
Altium's software is used by engineers to design printed circuit boards for electronic devices. With global demand increasing for smart connected devices the company is well positioned to monetise its intellectual property. It's subscription pool is the largest and fastest growing in the industry. For the 2017 financial year, the company grew revenue by 18% to approximately US$111 million, of which about 48% was earned in the Americas.
Margins are also rising with a record EBITDA margin of 30% in 2017 helping earnings per share increase 21% to 21.7 cents a share. The stock is not cheap, as it trades at 33 times forward earnings after hitting a new 52 week high of $11.95.
Integrated Research Limited (ASX: IRI)
Integrated Research's software is used to monitor the performance of an organisation's IT infrastructure, payments and communications systems. The company boasts a very diverse range of clientele servicing 125 out of the US's Fortune 500 companies, including all 10 of the top 10 US banks.
In the 2017 financial year, the company managed to grow revenue by 8% (13% at constant currency) with earnings per share rising by 16% to 10.9 cents a share. Approximately 71% of the company's revenues are earned in the Americas region which is also the area where the company is growing its revenues the fastest. Estimated FY18 earnings are 13.3 cents a share, thus the stock currently trades at a forward p/e of about 28.
