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Summary
- Amid the Covid-19 pandemic disruptions, tech stocks have shown exceptional momentum in 2020
- The rapid shift digitalisation in the fields of entertainment, shopping and working due to the pandemic will continue to reap the rewards for many tech names in 2021.
The year 2020 has brought fortunes for the tech stock investors, and it’s not wrong to consider it as one of the best years for the sector in recent history.
Amid the Covid-19 pandemic disruptions, tech stocks have shown exceptional momentum in 2020, primarily fuelled by a change in the consumer’s taste and preference. The stay-at-home restrictions prompted by the crisis stimulated demand for web-based services like contactless payment, delivery services and e-commerce. The demand for cloud services, cybersecurity solutions and remote-working tech have been keeping high because of the online-learning and work-from-home wave.
Though the names of the technological company cannot be expected by investors to always beat the market, but the rapid shift digitalisation in the fields of entertainment, shopping and working due to the pandemic will continue to reap the rewards for many tech names in 2021.
5 tech stocks that can be worth watching for 2021
There are many such stocks listed in the London Stock Exchange that boast of growing price performance and strong fundamentals.
Here five tech stocks from among the large, mid and small cap category are being discussed to watch for 2021.
Sage Group PLC (LON: SGE)
The Sage Group was established in 1981 as a multinational software company. The company operates across 23 countries including Africa, Asia, Europe, Latin America, with a workforce of 13,000 employees. It is known for serving over 3 million customers.
The company witnessed strong growth with 8.5 per cent of recurring revenue (organic) in the full year ending 30 September 2020, that was in line with the Board’s expectations. A 22.1 per cent of organic operating margin, driven by the ongoing investment in the business was reported. The Group also saw good progress in strategic execution, with 65 per cent of software subscription penetration.
Softcat PLC (LON:SCT)
Based in Marlow, Softcat is a leading provider of IT infrastructure technology and services in the UK.
The company performed well during the Q1 2020 ending 31 October 2020, delivering improvement in gross profit, operating profit, revenue on YoY basis. It has also been achieving its recruitment targets, and growth was witnessed in both public as well as corporate segments. The board has expressed their confidence for the positive growth momentum to extend in the second quarter as well.
Avast PLC (LON: AVST)
Based in the United Kingdom, Avast PLC is engaged in providing security software worldwide.
Avast plc has been reporting continuous growth, and in Q3 2020 ending 30 September 2020, adjusted revenue generated by the company was $226.0 million, reporting an increase of 8.6 per cent on an organic basis and 2.6 per cent at an actual basis. The company has recorded an adjusted revenue of $659.1 million on a YTD basis, which was up by 7.3 per cent on an organic basis and 1.9 per cent at actual rates. The business of the company has normalised after the lockdown was eased. The management, despite remaining cautious, is expecting to continue to outperform billings growth in the second half of the year.
Halma PLC (LON: HLMA)
Halma PLC is a British company which is based in Amersham, England and is a group of life-saving technology companies.
The company displayed a resilient performance with a major focus on the long-term sustainability of the business supported by the agile business model. Halma witnessed a 5 per cent decrease in the revenue and adjusted profit before taxation. However, the company generated cash by managing the working capital well. It also announced an interim dividend of 6.87 pence, which saw an increase of 5 per cent. The company had recently acquired a designer, manufacturer and installer of critical communication systems, Static Systems Holdings Limited, this acquisition will help the company to foray in the UK healthcare market for some specific existing products and services.
Rightmove PLC (LON: RMV)
Based in the UK, Rightmove plc may not sound like a pure technology stock, but it is the largest online real estate portal and property website that runs rightmove.co.uk.
Despite the coronavirus pandemic in place, the company was well-positioned to grab the opportunity amid the distress. The company witnessed a growth in traffic with visits up 5 per cent year on year after the property market in England reopened in May. The company’s cash position stood at £50.3 million in the half-year ending 30 June 2020 (31 December 2019: cash and deposits £36.3 million). It is one of the few companies which has seen revenues, earnings and dividends per share increasing every single year for the last decade.
