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Are these the next tech stars of the ASX?

By now I’m sure most investors will be all too aware of the potential of market darlings Altium Limited (ASX: ALU) and Appen Ltd (ASX: APX).

But the two tech shares listed below may not be as well known. Are they future tech stars?

Citadel Group Ltd (ASX: CGL)

Citadel Group is a fast-growing software and services company which specialises in IT security and data management. In FY 2018 the company delivered record revenues of $108.5 million and a net profit of $19.4 million. The latter was up an impressive 26% on the prior year and was driven by a record number of new and extended contracts, predominantly for its increasingly popular Citadel-IX cloud-based enterprise information management platform. The popular platform allows users to securely access or transfer proprietary and sensitive information remotely and has understandably attracted a large number of government customers.

Due to the growing amount of data being created by companies and how important it is for this data to be secure, I believe Citadel is well-positioned to continue its strong performance in FY 2019 and beyond. Especially given its leading positions in the national security, defence, e-health and tertiary education sectors.

Megaport Ltd (ASX: MP1)

Megaport is a fast-growing provider of elasticity connectivity and network services. It uses its software to streamline the internet connection between its customers’ data centres and major cloud service providers. In FY 2018 the popularity of Megaport’s service was clear to be seen. It posted an 85% increase in revenue to $19.8 million thanks to the expansion of its services to 221 data centres. This was a 34% increase in its footprint compared to the prior period.

Management appears confident that FY 2019 will be another strong year for the company. Especially given the fact it raised $60 million in March to support and drive continued expansion to new markets and data centres, develop new product initiatives, and accelerate sales growth. I think Megaport is one to watch very closely this year.

These 3 stocks could be the next big movers in 2020

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Altium, Appen Ltd, and Citadel Group Ltd. 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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