Cantor Fitzgerald has initiated coverage on five UK-listed technology stocks which the broker feels all “stand before significant global market opportunities.”
The analyst has started all five stocks - GB Group PLC (LON:GBG), accesso Technology Group PLC (LON:ACSO); Dotdigital Group plc (LON:DOTD); Blancco Technology Group PLC (LON:BLTG); and Gresham Technologies PLC (LON:GHT) - with ‘buy’ ratings.
In a note to clients, analyst Kevin Ashton said: “If there is a common theme for the five companies that we initiate on today it is that they have strong business models with very high marginal returns on capital that either throw off strong (mostly and/or increasingly repeat revenue driven) FCF, or are set to.”
He added: “Several of the companies can be considered global or emerging global leaders in their niche and all of them stand before significant global market opportunities.”
Most exciting ....
Individually, Ashton thinks that identity data specialist GB Group has “amongst the most exciting growth prospects of any company in the quoted UK tech space” and he has set a 340p price target for the stock.
He added: “Having recently reorganised its business along global lines we suspect the recent hiatus in organic growth will prove to be just that and that GBG has many years of high return, strong organic growth ahead of it.”
READ: GB Group targeting continued international expansion ...
Meanwhile, Ashton thinks ticketing and virtual queuing group accesso – on which he has set a 1,750p price target - is a “global leader with a high degree of repeat revenues, an exceptionally high degree of visibility and quite remarkable opportunities remains good value at these levels.”
And the analyst noted that bulk email specialist Dotdigital “operates a SaaS business model that throws off significant cash on the back of modest capital employed.”
Setting a share price target of 80p for Dotdigital, Ashton added: “Its UK market share is still just in the teens and additional growth is coming from international rollouts and integration with CRM and e-commerce platforms. “
Elsewhere, he noted that mobile device diagnostics firm Blancco “has a very sticky client base and a business model that generates exceptional returns”, and set a 270p price target on the stock.
And, after years of rebuilding the company, Ashton said he believes that financial data integrity solutions group Gresham “is finally ready to enter a period of strong revenue growth that should lead to sustained and strong FCF generation.”
He has an 180p price target on Gresham.