Tech Stocks on your Watchlist 

With reporting season fast approaching, I thought I would start a new topic for us to share about tech stocks on our watchlists. 

1. Which stocks are perhaps a little too early in their journey for you to jump in but you’re starting to watch more closely? 
2. Are any of the below companies you would argue against? 

As I continue to try to improve my process as an investor, one of the things I need to be doing better is to follow companies for a longer time before I jump in. That way I can see the early thesis playing out, watch them execute, and have a lot more conviction by the time I start a position. 

Here’s a few companies on my watchlist that I need to research further, and would like to see achieve a certain milestone. I’d love to hear from others. 

Ep&T Global Ltd (EPX)

Relatively recent float, went public in May 2021, so we don’t have tons of historically reporting to go with. 

I like this company a lot because of where their software plays: building energy management solutions that reduce energy and water wastage for commercial real estate.

At current price levels, I’m calculating a market cap of roughly ~15M and ARR is now at 9M. Their still burning quite a bit of cash tough (~6M this year). 

For me this one is about: 

1. Can they sustain good growth
2. Can we send them move towards cash flow breakeven. 

Orcoda Ltd (ODA)

A company with a very mixed bag of a history. Look at that 20 year chart. If you invested $1 in this company nearly 20 years ago you would have lost 94 cents. I will need to see a whole lot from these guys to be more interested. 

Calling themselves “Operational Efficiencies Specialist”, these guys play in services & software primarily for the transport & logistics industry. 

Some good buzzwords in their preso: 

Our proprietary cloud-based, open ended, end-to-end software technology platforms have true optimisation capabilities, enabling clients to generate real time, fast, accurate and reliable information to make data-led decisions for the movement people, parcels and goods, the assets they travel in and the infrastructure they travel on

At a current market cap of~12M, if good execution continues, and the current recent trend to growth gets maintained, they will be re-valued by the market. 

Gratifii Ltd (GTI)

I’ve not been too interested when I first came across it, like other companies, I would have failed to see their point of differentiation. They provide software that enables businesses to drive customer engagement and growth with loyalty and rewards programs.

Like every other tech stock, this year’s hasn’t been great for them for the stock, but on the surface level, it appears the company delivered. 

“June quarter cash receipts once again exceeded Management’s forecasts, delivering the fifth consecutive quarter of revenue growth continuing to build momentum into FY23. FY22 cash from operations was breakeven with cash inflows in Q4FY22 of $210k"

Similar to EPX, this one for me is about: 

1. Can they sustain good growth
2. Is this move towards cash flow breakeven a one-off, or will they sustain this? 

Jcurve Solutions Ltd (JCS)

A services company rather a software company. They sell, implement and support things like ERPs and Digital Marketing programs. I’m less interested in companies like this one normally, but it appears they really delivered this year with growth of 38%. 

This one for me is simply: 

1. Can they continuing growing north of 30%?
2. Will they continue to improve their margins? 

If both things happen, they could become an interesting business. 

Bill Identity Ltd (BID)

Another one that falls in the category of “terrible past”. Just look at the 20 year chart and you’ll see what I mean. Even the 1 year chart is scary. I’m always more careful with the ones that have burned shareholders for so long, but we could see the momentum start to move in the other direction for them this year if a few things happen. 

This most recent quarter was completely flat for ARR, but they’ve make an impressive reduction to their cash burn, which brought them close to breakeven. 

Hence I’d like to see:

1. Can they be cash flow positive?
2. Can they continue to grow, even in the ~10-20% range would good for these numbers. 

If these things happen, Thorney Tech who’ve been buying good amounts recently will be happy.