3 tech stocks I’d buy today

Technology stocks have done really well over the last year with the FAANG stocks Facebook, Amazon, Apple, Netflix, and Alphabet (Google) doing very well internationally. Locally, REA Group Limited (ASX: REA) (up 45%), Computershare Limited (ASX: CPU) (up 32%) and WiseTech Global Ltd (ASX: WTC) (up a phenomenal 122%) have also done extremely well.

Looking forward, here are 3 tech stocks that I’d like to buy:

  • Technology One Limited (ASX: TNE) offers financial reporting, supply chain, HR and payroll, software solutions throughout the Asia Pacific region and the UK. Top brokers like Macquarie expect Technology One to benefit from increased market penetration of its product offering, a turnaround of its consulting division and significant growth within its cloud division. Whilst the company trades at a hefty PE ratio of 33, its return on equity is over 28% and its expected growth could more than compensate for this.
  • Nextdc Ltd (ASX: NXT) has gained over 67% over the last year prompting top brokers such as Morgan Stanley to start initiating coverage on the stock. Analysts expect NextDC to benefit from long term structural trends such as sustained growth in data consumption and a shift from on-premise to cloud hosting. Whilst industry trends alone do not necessarily lead to gains for specific companies, NextDC is an established provider and as such will likely benefit from the resulting network effects and barriers to entry. This is expected to lead significant revenue growth over the next 5 years.
  • Bravura Solutions Ltd (ASX: BVS) owns the Sonata wealth management administration system which has been driving growth with long term contracts recently signed with South African listed companies Discovery Limited and Stanlib (part of Liberty Group). The company has also recently signed a long term contract with ASB Bank. The Sonata system has achieved a compounded annual growth rate of 108% since FY 2018 and management are bullish on the outlook. Management have re-affirmed their FY 18 guidance of double digit profit and EPS growth.

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Motley Fool contributor Kevin Gandiya has no position in any of the stocks mentioned. You can follow Kevin on Twitter @KevinGandiya.

The Motley Fool Australia owns shares of Bravura Solutions Ltd and WiseTech Global. The Motley Fool Australia has recommended Computershare and REA Group Limited. 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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