Tech stocks are outperforming the rest of the market at the moment, so I thought I’d go hunting for an Aussie tech stock for you that has performed well after its quarterly report.
We have witnessed a huge sell-off in many of the former market darlings over the past couple of years, so it’s going to be profitable working out when it’s time to jump on the stocks that still have a bright future.
The stock I show you today rallied from $2.00 to $22.00 between 2017 to 2022 and then fell below $4.00 over the past 18 months! Ouch.
But there are some signs of life after it let the market know that 2023 EBITDA will be 100% above market expectations and 2024 EBITDA will be 50% larger than expected.
The shorts got burnt on Friday as a result, with the price leaping nearly 50% on the day.
So is that the starting gun for the next leg up?
If it is, you’d want to be putting a few in the bottom drawer just in case.
When a stock rallies 1,000% over five years, there’s usually a good reason for it.
When that stock suffers a large drawdown as a result of a change in general market conditions (tech sell-off as a result of rising interest rates), you need to be on alert for buying opportunities.
As this correction drags on, there are many companies with similar stories — strong underlying fundamentals but general market weakness seeing their stock price suffer.
I reckon there are still tough times ahead, with US GDP now heading south and inflation remaining elevated.
But if you have a long enough time horizon, it’s definitely time to go shopping for quality companies with soggy share prices.
Just click play on the video above to see my analysis of the tech company that looks like it’s turning the corner.
Until next week,
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Murray Dawes,
Editor, Money Weekend
