It may not be the biggest, but Australia is home to a thriving tech sector filled with companies growing at impressively strong rates.
Three of my favourites at the smaller end of the market at the moment are listed below. Here’s why I think they are worth a closer look:
Citadel Group Ltd (ASX: CGL)
Citadel Group is a fast-growing software and services company which specialises in IT security and data management. Considering the importance of data security, I believe its key Citadel-Information Exchange (Citadel-IX) cloud-based enterprise information management platform is well-positioned to deliver strong growth over the next decade. Citadel-IX is a modular SaaS platform designed to provide both domestic and international customers with secure, flexible options to manage their enterprise information. It is deployable within one hour, highly scalable, and has the latest technology and software to support cloud-first strategies. Its growing popularity underpinned Citadel’s 26% increase in net profit after tax to $19.4 million in FY 2018.
Megaport Ltd (ASX: MP1)
Megaport is provider of elasticity connectivity and network services across 221 data centres globally. In FY 2018 the growing popularity of its services led to customer numbers increasing 41% to 1,038. These customers include many blue chip names such as Aon, Flight Centre Travel Group Ltd (ASX: FLT), and Vodafone. Its growing footprint and increasing customer numbers ultimately led to revenue lifting by a sizeable 85% to $19.8 million. With demand for its services continuing to increase as its footprint expands, I expect similarly strong growth in FY 2019. This could make it a great buy and hold investment option, albeit for those with a higher tolerance for risk.
Redbubble Ltd (ASX: RBL)
Redbubble is an ecommerce company which provides a global online marketplace connecting independent artists with customers. In FY 2018 the company continued its impressive form thanks to the winning combination of strong growth in customer numbers and selling artists. While new customers growing 38.1% to a total of 4 million was pleasing to see, I was particularly impressed at its 42% lift in repeat customers to 1.2 million. This helped drive revenue 29.7% higher to $182.8 million. The good news is that management expects the strong top line growth to continue in FY 2019 and has forecast revenue increasing 30% this year on a constant currency basis.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of February 15th 2021
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Flight Centre Travel Group Limited. The Motley Fool Australia owns shares of Citadel Group Ltd and REDBUBBLE FPO. 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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