Iress Ltd (ASX:IRE) is mid-cap company valued at about $2.1 billion providing technology solutions for the financial markets, wealth management and mortgage sectors.
The company's shares have taken a hit in the past 12 months due to higher costs associated with the integration of acquired businesses in the UK. They were down to a low of $9.17 in April.
With no news out of the company, I think investors are re-examining the company. The 2017 results disclosed a 10% increase in group revenue from the previous financial year to $430 million.
The 2018 results should see the acquisitions bedded down and a material increase in profit from 2017. What I like about IRESS is the substantial investment in AI which would be expected to pay off down the track, together with its market dominance – IRESS commands about 60% of its market in Australia.
Foolish takeaway
Look for companies with solid revenue growth which have been oversold due to lower-than-expected profitability or underwhelming earnings guidance. Often newly-acquired businesses take a good 12 months to bed down. An example of this is WiseTech Global Ltd (ASX: WTC) which was oversold to $9.49 in April (closing today at $16.76).
