The S&P/ASX 200 closed the day’s session in red today at A$5864.7, down by 22 points. However, technology sector index posted 2.44% gains with S&P/ASX 200 Information Technology (XIJ) settling at A$1,137.6. Let us look at 2 Tech stocks which investors may keep in their watchlist-
Adacel Technologies Limited (ASX: ADA)
On 30 January 2019, IT player, Adacel Technologies announced of securing a contract to continue to extend support services to the ATC Tower Simulator System (TSS) program of United States Air Force. The agreement for the acquisition and support of ATC tower simulators was earlier secured in 2002. It remains the most significant single contract for ATC simulators with over 100 simulators being provided by the company during the acquisition phase. With the new deal, the company is expected to provide maintenance, support, configuration management, Training System Support Centre, visual database updates and hardware and software related support.
As per the FY2018 annual report, the company posted 25% growth in the Revenue from continuing operations at $53.06 million for the period ended 30 June 2018. The Net Profit After Tax attributable to owners had reduced by 9.5% to $8.394 million for FY18. The earnings per ordinary share reduced from $11.71 in FY17 to $10.64 in FY18. The company’s net cash stood at $12.5 million.
ADA closed the day’s trade at A$0.920, impressively up by 17.95% on 31 January 2019 with a market capitalization of $59.77 million and 76.63 million outstanding shares. The share price has soared by 17.29% till date this year. ADA stock looks appealing as the company seems well-positioned to expand its market presence through the commitment to technological leadership and customer support.
Xero Limited (ASX: XRO)
Xero Limited is an Australian listed company involved in providing online accounting platform to its clients. It offers its services to different business types such as start-ups, no-profit organizations, legal firms, health care, tourism, construction, hospitality, etc.
As on 30 September 2018, the company reported 1579K software subscribers with 380K users added in the last one year. The company reported Annualized monthly recurring revenue of $589 million with $167 million added in last six months. The operating revenue stood at $256.5 million with 37% upside Y-O-Y basis, with 91% contribution by core accounting segment. The EBITDA saw $17 million Y-O-Y jumps at $34.5 million.
The last year’s US$300m convertible note issue secured the company’s financial position to enhance and extend the small business platform and ecosystem capabilities through targeted acquisitions and investments. The acquisition of Hubdoc was an exciting step for Xero’s small business platform strategy.
The price of the scrip soared by 8.77%, settling the day’s trade at A$45.530 on 31 January 2019 as compared to the previous close of A$40.020. The stock has offered a negative YTD return of 4.60% to its shareholders till date this year. The market participants may keep XRO in their watchlist, given its performance change of 793.30% since its inception. The company strives to focus on identifying opportunities that can drive accelerated adoption of cloud accounting and grow the small business platform.
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