Australia’s small cap technology sector has had a mixed start to 2019.
Overall, the sector has gained 3.6 percent. This may seem small but is nonetheless a welcome recovery from 2018 when the sector lost 17.5 percent.
$25 million has been raised so far this year, compared with $85 million in the same period last year – this could indicate many ASX tech small caps are gradually edging towards becoming cash flow breakeven and are less reliant on the market for funding, but its still early days.
It could also be an indication of a more challenging environment to raise funds.
Technology stocks have been increasingly scrutinized in recent years due to various concerns, especially in the areas of privacy and how they use our data.
Within their performance is an underlying message that the sector is no different to others.
If a company posts poor results or a negative announcement, investors will react negatively. And if there is wider sentiment towards the sector being driven by larger company news, industry changes or regulation, investors will also react accordingly.
And vice versa, if there are positive shifts in a sector the momentum is likely to have a knock on effect on all companies in the sector.
Who have been the winners so far this year?
11 stocks have gained 50 percent or more and four of these have gained more than 100 percent.
Furthermore, only one of the top 20 performers so far this year had gained in 2018, representing a remarkable improvement for all companies.
The sole gainer from the top 20 stocks was Redflex Holdings (ASX: RDF) that improved from gaining 7.5 percent last year to 45 percent so far in 2019.
The top four gainers are Serpentine Technologies (ASX: S3R), Cirrus Network Holdings (ASX: CNW), Tymlex Group (ASX: TYM) and Q Technology Group (ASX: QTG).
Both QTG and S3R have not announced substantial news other than QTG conducting a Rights Issue. S3R is not currently operating and is seeking new acquisition opportunities.
TMY and CNW have seen positive momentum to begin 2019. The IT Solutions provider, Cirrus, announced record revenues and earnings in its half year 2019 results, producing $759,000 underlying profit from $45.7 million in revenue.
These figures came as the business nears the end of its five year transformation plan.
Tymlex Group only listed in December last year but the blockchain platform provider has had strong momentum.
It announced a positive December quarter performance, and a series of partnerships in South Africa, including with the South African government, that puts the company in good stead for the foreseeable future.
Tymlex also achieved partner status in the Google Cloud Technology Partner program, meaning they can sell their platform to customers through Google’s Cloud Platform Marketplace.
Top 20 performing ASX tech stocks so far in 2019
|Ticker||Name||Market Cap||Price||Total Return YTD (%)|
|QTG||Q TECHNOLOGY GROUP LTD||$ 1,351,855||0.009||125|
|TYM||TYMLEZ GROUP LTD||$ 45,084,588||0.345||116|
|CNW||CIRRUS NETWORKS HOLDINGS LTD||$ 29,151,676||0.033||106|
|S3R||SERPENTINE TECHNOLOGIES LTD||$ 2,888,385||0.004||100|
|FCT||FIRSTWAVE CLOUD TECHNOLOGY||$ 82,544,336||0.33||89|
|DUB||DUBBER CORP LTD||$ 109,088,504||0.715||77|
|OOK||OOKAMI LTD||$ 6,554,789||0.02||67|
|CV1||CV CHECK LTD||$ 22,384,174||0.082||64|
|ESV||ESERVGLOBAL LTD||$ 145,302,080||0.12||50|
|NOV||NOVATTI GROUP LTD||$ 42,527,248||0.27||50|
|STC||SINETECH LTD||$ 2,117,449||0.003||50|
|SLX||SILEX SYSTEMS LTD||$ 45,173,844||0.265||47|
|RDF||REDFLEX HOLDINGS LTD||$ 91,633,240||0.61||45|
|SVT||SERVTECH GLOBAL HOLDINGS LTD||$ 2,773,861||0.013||44|
|4DS||4DS MEMORY LTD||$ 83,050,168||0.079||44|
|CCG||COMMSCHOICE GROUP LTD||$ 10,774,420||0.099||43|
|NTC||NETCOMM WIRELESS LTD||$ 156,572,992||1.07||41|
|BTH||BIGTINCAN HOLDINGS LTD||$ 84,464,992||0.38||41|
|TV2||TV2U INTERNATIONAL LTD||$ 14,898,507||0.007||40|
|EVS||ENVIROSUITE LTD||$ 34,742,660||0.094||38|
This content does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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