5 Technology Stocks Under Focus: IQE, KNOS, GAW, AVV, OCDO

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Summary

• Technology stocks have played a vital role in the recovery of world indices.
• These businesses have produced stellar returns in recent times during the pandemic.
• Robust performances from 2020 seem to be prolonging with technology remaining in demand.

Technology could lead to innovation, and innovation, coupled with technology can help economies recover quickly from recessionary cycles. Investing in technology businesses is deemed as a good investment as people tend to accept new technologies as it helps them to improve their quality of life.

Throughout the choppy 2020, tech stocks have fared well in contrast to other sectors. Besides, tech stocks have spearheaded the rebound in the global markets. In general, tech stocks act as an indicator of the stock market. Robust performances from 2020 seem to be prolonging with technology remaining in demand.

Also read: 3 UK Logistics Stocks with Over 200% One-Year Return Amid Pandemic Blues

In this article, we would put our lens through technology stocks that have produced stellar returns in the last one year.

(Data Source: LSE) Copyright © 2021 Kalkine Media Pty Ltd.

1. IQE Plc (LON: IQE)

Technology firm IQE, specialising in semi-conductors, made a good start to the year 2021 in both its Wireless and Photonics business units. During FY2020, the company’s revenue is expected to be around £178 million, which represents a year-on-year growth of over 25 per cent. The company has emphasised on cash optimisation and    Capex reduction. Notably, the net cash of the company stood at £2 million on 31 December 2020. The company managed to generate a strong free cash flow of around £18 million. Last year, the company achieved real strategic progress with excellent results. In 2020, the company witnessed strong financial and operational performance.

In the last 52-week period, IQE’s shares have delivered a return of 221.46%.

2. Kainos Group Plc (LON: KNOS)

FTSE 250-listed IT services company Kainos Group witnessed solid trading performance and expects to end the year 2021 ahead of market expectations. Under digital services, it carried the momentum of long-term engagements of the UK government transformational programme, including NHS ventures.

The IT firms also continued to win new contracts under the Workday Practice division. Looking ahead, the group has a substantial contracts backlog, a robust pipeline, and strong fundamentals to pursue market opportunities.

In the last 52-week period, Kainos Group’s shares have delivered a return of 128.95%.

3. Games Workshop Group Plc (LON: GAW)

FTSE 250-listed manufacturer of Games & Miniatures Games Workshop delivered an excellent first-half performance with significant improvements in earnings per share and cash from operations.

In the first half of FY2021, the company delivered a strong performance, registering strong growth in profitability. Driven by strong monthly net cash generation, the company increased cash buffer by around £50 million.

Games Workshop has constantly been reinvesting to grow sustainably and returning surplus cash to shareholders in the form of dividends. The company declared £26 million in dividends during the first half of the financial year 2021.

Despite the uncertainty related to Covid-19 and Brexit, the company delivered an excellent financial performance in the first half of the financial year 2021 and has a stable platform to carry the same momentum to register further growth. The sales remained in line with market expectations in December 2020. GAW distributed an additional dividend of 60 pence per share along with an interim dividend of 80 pence that reaffirms the confidence in the outlook.

In the last 52-week period, Games Workshop’s shares have delivered a return of 140.55%.

4. Aveva Group Plc (LON: AVV)

Aveva Group is an FTSE 100 listed engineering and software company that provides industrial software solutions.

The company has successfully completed the acquisition of OSIsoft LLC. This deal is expected to help the company in achieving various revenue and cost synergies. OSIsoft is the leading provider of real time industrial data software. Having acquired OSIsoft, AVEVA Group is expected to drive the progress of the next generation of engineering and industrial digital transformation.

Furthermore, the company is making significant investments to accelerate its growth trajectory with Research & Development investments in Artificial Intelligence (AI), Cloud and Extended reality.

During the three-month period ended in December 2020, the company had a strong quarter of contract renewals, with an increase of more than 26 per cent in revenue. On 31 December 2020, the company was debt-free and had cash balances of £2.7 billion.

The company has a positive outlook for 2021, as it senses strong digitalization opportunities in the industrial world that could lead to growth. Aveva had maintained an interim dividend per share of 15.5 pence during H1 FY21.

Aveva had demonstrated several large contract renewals and efficient digital demand generation, with revenue growth and a strong order pipeline. The company board remained optimistic for the FY21 outlook, with a substantial scope of digital penetration in the industrial world and significant growth opportunities ahead. Aveva continues to stay in a robust financial position along with strong fundamentals and consistent cash generation.

In the last 52-week period, AVEVA Group’s shares have delivered a return of 27.96%.

5. Ocado Group Plc (LON: OCDO)

Online grocery retailer Ocado Group’s retail revenue for Q1 FY21 increased by nearly 40% YoY. The company witnessed strong demand from online grocery and progress on average orders per week of around 2.5%. In Q2 FY21, the Company expects positive revenue growth as it continues to ramp the Bristol CFC (Customer Fulfilment Centre).

In the last 52-week period, Ocado Group’s shares have delivered a return of 50.50%.