The world is changing at a quicker pace these days. Technology is key to making most businesses work.
Sometimes a business can provide software as a service (SaaS) like Altium Limited (ASX: ALU), Aconex Limited (ASX: ACX) and Xero FPO NZX (ASX: XRO).
However, there's another group of shares that provide the infrastructure for other businesses to use technology in one way or another. Here are two of the most exciting ones:
Nextdc Ltd (ASX: NXT)
Nextdc is one of Australia's largest data centre providers. It boasts of having eight data centres across five Australian cities with a guaranteed 100% uptime.
It offers high speed, private connections to the cloud, carriers and IT service providers.
Data usage and connectivity is integral in this modern world and Nextdc is filling in this space very well for its clients.
In FY17 it reported that revenue had grown by 33%, earnings before interest, tax, depreciation, amortisation (EBITDA) had grown by 77% and the number of customers had grown by 19%.
Nextdc is trading at 50x FY19's estimated earnings.
Speedcast International Limited (ASX: SDA)
Speedcast is a leading global network and satellite communications service provider offering high quality managed networks services in over 140 countries. It has 42 international sales & support offices as well as 39 'teleport' operations. It boasts of having unique infrastructure to serve the requirements of customers globally.
Some of its largest customers are merchant vessels, cruise ships, ferries, yachts, oil rigs and government vessels.
In its recent half-year presentation it revealed that revenue had grown by 143%, earnings before interest, tax, depreciation and amortisation had grown by 210% and net debt had decreased by US$23 million.
I think the business is well placed to grow with demand for data growing all around the world, including in the most remote areas.
Speedcast is currently trading at 14x FY18's estimated earnings with a grossed-up yield of 1.38%.
Foolish takeaway
I think both businesses are exciting ones and make compelling investment cases. I think Nextdc is just too expensive for me to justify a buy at today's price. However, Speedcast could be a good buy today if it delivers on its expected growth over the next couple of years.
