Towards the end of the financial year many investors look to tidy up their portfolios and in particular sell losing positions in order to offset taxable income.
This makes it a particularly good time to scour stocks trading at 52-week lows to identify treasure amongst the trash.
The following three tech stocks are all trading close to their 52 week lows but are quality businesses worth considering for your portfolio.
Hansen Technologies Limited (ASX: HSN)
The provider of billing software to the utilities sector announced a disappointing trading update recently in which it primed investors to expect a subdued result in 2019 relative to this year. I don’t think the news signals any serious long-term problems when viewed in the context of what will be an especially strong 2018. Earnings-per-share (EPS) is expected to increase 24% this year partly thanks to some lumpy project revenue which will not be repeated next year.
The stock pays a 2.8% trailing gross dividend yield, is 33.8% down on its 52-week high and has delivered a five year total return of 284%.
Integrated Research Limited (ASX: IRI)
Integrated Research provides software which helps companies monitor and maintain critical systems and boasts more than 120 Fortune 500 firms as customers. Its share price fell heavily at the end of May and has continued drifting lower in June which may be related to the sale of 15 million shares by founder and chairman Stephen Killelea earlier in the year.
Although large selldowns by management can sometimes signal choppy waters ahead I am not convinced that this is the case on this occasion. Mr Killelea has been selling chunks of shares regularly over the past couple of years during which time Integrated Research has performed very well.
The stock pays a 3% trailing gross dividend yield, is 24.8% down on its 52-week high and has delivered a five-year total return of 239%.
Technology One Limited (ASX: TNE)
It seems the market didn’t like the change to reporting that this government enterprise software provider slipped in when releasing its latest full-year guidance in May. The company has switched from reporting underlying profit growth to simply profit growth. My view is that regardless of which metric is used, it does not change the fact that Technology One has created significant shareholder value over a long period of time.
The stock pays a 2.6% trailing gross dividend yield, is 26% down on its 52-week high and has delivered a five year total return of 177.8%.
Where to invest $1,000 right now
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*Returns as of June 30th
The Motley Fool Australia owns shares of Hansen Technologies. The Motley Fool Australia has recommended Integrated Research 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 Scott Phillips.
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