Whether you're after disruptive growth, scalability, dividends or all of the above; ASX-listed technology companies are worth keeping an eye on.
Indeed, although the market for technology companies on the ASX is tiny in comparison to the plethora of quality tech stocks that call the USA's NASDAQ stock exchange home; there are a number of local stocks investors should consider as investment worthy.
Here are five of my favourite.
- Telstra Corporation Ltd (ASX: TLS)
Okay, Telstra probably is not what everyone would class as a technology stock. However, in recent years it has divested its copper cable network, bought a majority stake in China's version of Carsales (Autohome.com.cn) and invested billions of dollars into machine-to-machine communication and network application services.
- XERO FPO NZ (ASX: XRO)
Despite not yet being profitable, this $2 billion cloud accounting software provider is going from strength to strength and remains one of the ASX's best technology companies, in my opinion. Its 'beautiful' accounting software is disrupting incumbents and revolutionising the way small businesses manage their books.
- Altium Limited (ASX: ALU)
Altium designs software that is used to develop printed circuit boards (PCBs). These boards form the backbone of electronics devices created right around the world. In fact, the $590 million company generates three-quarters of its revenue from the USA and Europe.
- Technology One Limited (ASX: TNE)
Technology One's shares have soared an impressive 300% over the past five years. This has given it a $1.2 billion market capitalisation and made it Australia's largest listed enterprise software company.
- Bulletproof Group Ltd (ASX: BPF)
Bulletproof Group is a tiny $44 million cloud computing business that specialises in taking clients technology from standalone networks to the cloud. Utilising Amazon AWS and VMWare, Bulletproof's business is scalable and will continue to benefit from the ongoing utilisation of cloud computing by businesses and consumers throughout Australia.
Buy, Hold or Sell?
I think savvy investors could do a lot worse than add these five companies to their watchlists. However, of the five companies I think XERO and Bulletproof are the best value for long-term investors today – but they're the riskiest also.
Moreover, I've said before that Telstra shares are now trading around fair value, but its shares would have to fall to around $5 before I'd start backing up the truck.
