Altium Limited (ASX:ALU) share price falls almost 10%

The Altium Limited (ASX:ALU) share price has dropped nearly 10% today.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Altium Limited (ASX: ALU) share price has fallen nearly 10% in a very painful day for the electronic PCB software business.

If you want to point the finger somewhere then you can look no further than the US share market.

The S&P 500 fell 1.66% earlier today. The NASDAQ dropped a painful 3.26% but it was the largest individual constituents that felt the most pain.

Apple fell nearly 4%, Amazon dropped 5%, Microsoft declined 3.4%, Facebook declined 5.7%, Alphabet (Google) went down 3.8% and Netflix dropped 5.5%.

Altium is often seen as a proxy on the ASX for the FAANG shares. Its ASX tech peers didn't fare so well today either with Afterpay Touch Group Ltd (ASX: APT) dropping another 4.8%, Xero Limited (ASX: XRO) fell 5.4%, Appen Ltd (ASX: APX) declined 2.2% today and WiseTech Global Ltd (ASX: WTC) went down 1.8%.

Of course, none of the businesses that I've mentioned in this article have seen their underlying intrinsic value fall by 5% or more today. It's just investors selling for a price they can get. Indeed, it's days like today that show how liquid the share market is – it takes more than a day to sell an investment property that's for sure.

Some conservative investors think this decline in value of shares like Altium has been coming for a while. Whilst I'd agree with the thought that ASX tech sector got too frothy after reporting season a few months ago, the current valuations are looking more attractive.

Foolish takeaway

Even after today's fall Altium is still trading at 41x FY19's estimated earnings. So I'm not quite jumping in yet – if it fell below $20 then I'd be interested.

Altium has growing profit margins, quality clients, high recurring revenue and a growing dividend stream. There's a lot to like about this technology-focused business for long-term growth.

Motley Fool contributor Tristan Harrison owns shares of Altium. The Motley Fool Australia owns shares of AFTERPAY T FPO, Altium, Appen Ltd, WiseTech Global, and Xero. 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.

More on Share Market News

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Share Gainers

These were the best-performing ASX 200 shares in March

These shares made their shareholders smile in March thanks to some very big gains.

Read more »

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
Opinions

2 ASX shares I have been buying in 2024!

I’m a believer in the long-term outlook of these stocks.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »