ASX Small Cap Favourites: Altium Limited
Altium is an Invast favourite, we first identified the stock as a buying opportunity to clients when we launched into the Australian market back in August 2013. Three years ago, we added the stock in a basket of other small cap stocks as a good buying opportunity. It was then trading at $2.69, click here to see the review in our 2014 forecast guide report.
Today, the stock is one of the best performers in the small cap and emerging space. As of the time of writing, ALU shares are trading at around $9.42 and rising rapidly. The market cap at these levels is still reasonable at around the $1bn mark. The market is clearly starting to see the huge value in this business as a standout market leader in the technology space. This could very well become one of Australia’s best technology success stories.
Revenue grew last year by 17% and is on track to rise above $100mpa in FY17. Margins are attractive with EBITDA slightly below 30%. The business now has more than 31,000 subscribers and more than half of business revenue is recurring. Management is targeting revenue to rise to $200mpa by 2020, which isn’t that far off. Given recent success, the market is starting to seriously re-rate the stock.
We’ll stick around to watch and see how the journey pans out. Invast has been a believer in Altium’s market position since the beginning of our launch into the local market and we will continue to do so as long as results keep surprising on the upside. A great story.
Invast is very well placed to bring you some huge opportunities in the coming months. Execution costs for ASX stocks are 0.06% (6 basis points) above minimum charge, which means for a trade with a notional exposure of AUD 10,000, the applicable commission is only AUD 6.00.
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Chief Market Analyst
Peter Esho is a member of Invast’s Investment Committee and Chief Market Analyst at Invast Financial Services in Australia. The Invast’s Investment Committee constructs professionally constructed global thematic portfolios of Direct Market Access (DMA) CFDs over highly liquid global shares and ETFs through its new PortfolioInvestor platform. Since 1960, the Invast Group has grown to become one of the largest and most successful global brokerage firms, offering state-of-the-art trading technology and unparalleled service catering to all levels of traders.
Invast Financial Services Pty Ltd (ABN 48 162 400 035) is regulated by the Australian Securities and Investments Commission and holds an AFS Licence 438283 which authorises it to carry on a financial services business in Australia.