I think the tech sector is one area of the Australian share market which has plenty of quality buy and hold options.
Three which I believe are amongst the best on the market and worthy of a closer look today are listed below. Here's why I like them:
Altium Limited (ASX: ALU)
I'm a big fan of this software-as-a-service company due to its exposure to the rapidly growing Internet of Things (IoT) market. Altium provides an award-winning printed circuit board (PCB) design software, Altium Designer, which has been growing significantly in popularity over the last few years. I expect this to continue to be the case as the IoT market grows. This is because almost all IoT devices have a PCB inside them. As they come in all shapes and sizes, I expect design software like Altium Designer to be in hot demand. This could put Altium in a position to continue growing its top line at an above-average rate for some time to come.
Appen Ltd (ASX: APX)
Another area of the technology market that is growing at a rapid pace is artificial intelligence and machine learning. As a leading provider of machine learning and artificial intelligence dataset services, I believe Appen is well positioned to deliver above-average growth for the foreseeable future. Management recently advised that full-year underlying EBITDA is trending to the upper end of its $50 million to $55 million guidance range. If it hits the top end it will mean growth of over 95% year-on-year. One risk with Appen, though, is that it does have a number of large customers that account for a sizeable chunk of its business. Were they to go elsewhere, the company would be likely to see a reasonable drop in earnings.
Aristocrat Leisure Limited (ASX: ALL)
This gaming technology company is arguably my favourite tech share right now. While the company is best-known for its poker machines, the main attraction for me is its Digital segment. The strong performance of this segment played a key role in the company's impressive half-year results last week. Thanks partly to a 493% increase in the number of daily active users to 8.3 million, Aristocrat Leisure posted normalised net profit after tax of $310.5 million on revenues of $1,640.9 million. This was an increase of 24.4% and 33.6%, respectively, on the prior corresponding period. I expect the recurring revenues that these daily active users generate will lead to strong top and bottom line growth from the company in the second half and beyond.
