Ive been taking a look around the various sectors of the FTSE 100, and Im going to finish today with a look at five companies pulled from three sectors but which all fit under a general technology umbrella.
Next is CSR (LSE: CSR), another semiconductor company also based in Cambridge with ARM. CSRs Products are mainly aimed at communications Bluetooth, GPS, Wi-Fi, etc. CSRs shares are up 220% over three years to 759p.
Inmarsat (LSE: ISAT) does satellite-based communications. But its not your usual mobile phone company it provides services to governments, businesses, maritime users and others via its network of 11 geostationary satellites. Inmarsat shares have been volatile, but theyre up 150% over five years to 720p.
Then comes Pace (LSE: PIC), the digital TV specialist that ships millions of set-top boxes every year. And finally Sage Group (LSE: SGE), the producer of accounting and enterprise planning software. Pace shares have six-bagged over 10 years to 302p, with Sage up 125% over the same period.
|EPS change 2013||+40%||+64%||-7%||+26%||+12%|
|EPS change 2014*||+11%||+4%||-23%||+13%||0%|
|EPS change 2015*||+23%||+19%||-7%||+8%||+9%|
A unique proposition
Inmarsat has had a couple of tough years with cuts in government expenditure, so dividends will be squeezed if earnings dont get growing again and thats been hampered by delays in its latest satellite launch. For me its a company that seems to have great potential, but which I really dont know how to value right now, so its not my choice.
Sage produces essential business software and is doing well at it, with relatively modest P/E valuations and a dividend thats a little above average and is adequately covered. But for technology growth, it doesnt grab me like the others.
I think Pace is looking undervalued, and theres surely plenty of growth left in the market for all those magic boxes that come with digital television services. Theres little in the way of dividends at this growth stage, but theres plenty of cover by earnings to hike them when the firm gets closer to maturity.
Ive already spoken of my liking for ARM Holdings, and I think Id extend that to CSR too. I think its a bit of a dark horse with some definite potential, and I like it enough that Id dig deeper if I was considering buying.
But I do think were at one of those rare moments right now when ARM shares are relatively undervalued and as I know the company better than any if the others here, ARM would be my choice.
Technology is risky but it has helped launch many an investor on a millionaire trajectory, and you can get there too. Check out the Motley Fool’s brand new report, How You Could Retire Seriously Rich.
Did you know, for example, that 1,000 in cash in 1900 would be worth less than 4,000 today, but the same invested in shares would have topped 280,000?
Click here to learn more and pick up some top ideas to enhance your personal wealth.
Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has recommended ARM Holdings. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.