From 2 January 2019 to 15 November 2019, S&P/ASX 200 Information Technology (Sector) index inched up by ~ 36.5% whereas S&P/ASX 200 posted an increase of 22.23%.
However, on 18 November 2019, by the closure of the market, S&P/ASX 200 Information Technology (Sector) was down by 0.01% to 1,446.2 from its last close. Moreover, benchmark index S&P/ASX 200, on the other hand, declined by 0.4% to 6,766.8 from its previous close. The Australian stock market declined this morning despite the positive constructive discussions between the US and China on trade in a high-level telephonic conversation, according to media reports.
At the close of the Australian Securities Exchange on 18 November 2019, some of the tech players that traded in green were APX at $26.430 (up 13.385%), ALU at $34.720 (up 1.61%), TNE at $8.230 (up 3.652%), EML at $4.490 (up 2.995%) and DTL at $3.780 (up 7.082%). While LNK closed at $5.880, down by 2.81% and NXT closed at $6.800, down by 1.876% were among the tech players that traded in the red zone.
Let us have a look at the recent developments in these stocks.
Appen Limited (ASX: APX)
APX, part of Australia’s WAAAX stocks, is a global player engaged in developing human-annotated datasets for technologies including machine learning (ML) and artificial intelligence (AI).
The shares of APX have given a YTD return of 82.11% and a negative return of 3.56% in the last six months. APX has a market cap of $2.82 billion with 120.98 million outstanding shares, PE ratio of 55.2x and annual dividend yield of 0.34%.
On 18 November 2019, Appen announced an upgrade to its earnings guidance for full year FY2019, ending on 31 December 2019.
- FY2019 underlying EBITDA is expected to be reported at $96 million - $99 million (earlier guidance - $85-$90 million), based on the November and December performance at A$1=US$0.74. The conversion at the current level is expected to add another $ 1 million to $1.5 million to underlying EBITDA.
- Improved FY2019 earnings guidance was attributed to increased monthly relevance revenues and margins, majorly from existing projects along with existing customers.
Altium Limited (ASX: ALU)
Altium Limited (ASX: ALU) is a multinational software company that focuses on the development of electronics design systems for 3D PCB design and embedded systems.
The shares of ALU have given a YTD return of 58.12%. ALU has a market cap of $4.48 billion with approx. 130.97 million outstanding shares, PE ratio of 59.070x and annual dividend yield of 1%.
On 18 November 2019, Altium Chairman Sam Weiss updated the market with the resignation of Ms Wendy Stops, an independent Non-Executive Director and Chair of the Board Human Resources Committee.
Technology One Limited (ASX: TNE)
The shares of TNE have given a YTD return of 31.24% and a negative return of 11.09% in the last six months. TNE has a market cap of $2.52 billion with ~317.83 million outstanding shares, PE ratio of 41.31x and annual dividend yield of 1.17%.
On 13 November 2019, Australia’s leading enterprise Software-as-a-Service (SaaS) company, Technology One Limited (ASX: TNE) was praised by Australia’s National Health Funding Body (NHFB) for its service and consulting for the SaaS Project.
The organisation was able to complete a major step in its digital transformation with support from the company. As a result, NHFB now has a payment system, with features of security and functionality as per its requirement along with better reporting tools, collaboration, fewer manual processes and more digital workflows which are critical for companies that deal with billions of dollars in transactions.
EML Payments Limited (ASX: EML)
EML is engaged in offering innovative financial technology that provide solutions for payouts, gifts, incentives and rewards, and supplier payments. The year to date return of the stock stands at 192.91%, while the stock has delivered 119.68% in the last six months. The market cap of the company is $1.11 billion with approx. 255.46 million outstanding shares.
Following the announcement made by EML Payments Limited (ASX: EML) on 11 November 2019 related to the equity capital raising for funding the acquisition of Prepaid Financial Services (Ireland) Limited (PFS), the company on 18 November 2019 released a copy of the retail entitlement offer booklet concerning the 1 for 5 pro-rata accelerated non-renounceable entitlement offer of new EML shares to eligible shareholders.
The retail component of the Entitlement Offer opened on 18 November 2019 and is scheduled to close by 5.00 pm (AEDT) on 29 November 2019.
Data#3 Limited (ASX: DTL)
The shares of DTL have given a YTD return of 131.48%. DTL has a market cap of $543.53 million with approx. 153.97 million outstanding shares, PE ratio of 30.020x and annual dividend yield of 3.03%.
Link Administration Holdings Limited (ASX: LNK)
Link Administration Holdings Limited (ASX: LNK) is the largest provider of services in Australia's superannuation fund administration industry. The company, which connects millions of people with their assets like equities, pension and superannuation, investments, property and other financial assets, teams up with various financial market participants to offer them with services, solutions and technology platforms, thereby boosting the user experience and making scaled administration simpler.
The shares of LNK have given a negative YTD return of 9.70% and a positive return of 29.55% in the last three months. LNK has a market cap of $3.23 billion with approx. 533.39 million outstanding shares, PE ratio of 10.09x and annual dividend yield of 3.39%.
Recently, LNK updated the market two significant releases - AGM presentation and its entry to the UK pension market.
In the AGM presentation, LNK highlighted the FY2019 results:
The presentation also included a series of initiatives undertaken by the company, targeted towards driving its shareholder value in the short- and medium-term. These are:
- Global transformation program to deliver savings of at least $50 million by the end of FY2022.
- Portfolio optimisation with the sale of CPCS and LMS South Africa.
- On market share buyback of up to 10% of the issued capital.
- UK pensions strategy to become a new source of growth.
- Looking for further expansion of BCM and LFS into Europe.
- PEXA capital returns.
- Operating EBITDA of the continuing business is expected to be stronger in the 2H FY2020 and overall, in line with FY2019.
- Revenue is expected in the range of $480 million to $500 million and operating EBITDA at $60 -$70 million for FY2020.
UK Pension Market Entry:
On 13 November 2019, the company announced its strategic global partnership and minority investment in Smart Pension, which is a leading workplace pension provider in the UK. With this move, LNK joined Legal & General, and J.P. Morgan, the existing equity investors in Smart Pension.
NEXTDC Limited (ASX: NXT)
The shares of NXT have given a YTD return of 13.98%. NXT has a market cap of $2.39 billion and approx. 345.39 million outstanding shares.
On 24 September 2019, NEXTDC Limited (ASX: NXT) announced that the company has been named an Amazon Web Services (AWS) Service Delivery Partner for AWS Direct Connect in Australia. Now, the company would be able to offer its clients with the highest bandwidth AWS Direct Connect services, that would aid dynamic provisioning of services with speed up to 10Gbps across the country.
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