3 Tech Stocks That Could Smash The FTSE 100: ARM Holdings plc, Pace plc And Imagination Technologies Group plc

ARM Holdings plc (LON: ARM), Pace plc (LON: PIC) and Imagination Technologies Group plc (LON: IMG) could be winning investments

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

ARM Holdings

It’s been a rather disappointing year thus far for a number of UK-listed tech stocks. Indeed, the likes of ARM (LSE: ARM) (NASDAQ: ARMH.US), Pace (LSE: PIC) and Imagination Tech (LSE: IMG) are all in the red this year, with a weaker wider market not helping to improve sentiment in the three stocks.

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!

However, their long-term futures look bright and they could be well worth buying a slice of at current price levels. Moreover, they could outperform the FTSE 100 moving forward – here’s why.

ARM

Although sentiment in ARM is at a low ebb, the company continues to offer the most reliable earnings growth profile among UK tech companies. Indeed, during the last five years, ARM has increased earnings in each year and is forecast to do the same in each of the next two years.

Certainly, its growth numbers are lower than their previous highs, but ARM still seems to offer growth at a reasonable price as it becomes a more mature and less risky proposition. With ARM currently trading on a price to earnings growth (PEG) ratio of 1.3 and having a nimble, fast-paced business model that is key in its niche, it could be well-worth buying at current price levels.

Pace

After issuing a profit warning three years ago, Pace has moved from strength to strength. Earnings have risen by 49% since 2011 and are set to increase further over the next two years at a rate of 12% in the current year and 8% next year.

Despite this, the company continues to offer top notch value for money. This has been aided by a recent fall in its share price, with shares in Pace falling by 39% since March of this year, and means that they now trade on a price to earnings (P/E) ratio of just 9.5. With above average growth prospects, this equates to a PEG ratio of just 0.8, which means that Pace could prove to be a superb play over the medium term.

Imagination Technologies

Also falling heavily this year is Imagination Tech, with its share price being a third lower than in June 2014. Indeed, Imagination Tech is set to disappoint investors in the current year, as its bottom line is expected to be 16% lower than it was last year.

However, this is not an unusual occurrence for Imagination Tech. Over the last five years its bottom line has been hugely volatile but, over the medium term, it generally moves in the right direction. So, it’s of little surprise for this year’s disappointing estimates to be followed by an upbeat growth forecast of 36% for next year.

This puts Imagination Tech on a PEG ratio of 0.5, which means that it offers volatile growth at a reasonable price and, as a result, could outperform the FTSE 100 in the future.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

Peter Stephens has no position in any shares mentioned. The Motley Fool UK has recommended ARM Holdings. The Motley Fool UK owns shares of Imagination Technologies. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

macro shot of computer monitor with FTSE 100 stock market data in trading application
Investing Articles

Here’s a FTSE 250 stock to buy to benefit from the construction boom!

Jabran Khan details a FTSE 250 stock that could be primed to benefit from the infrastructure and construction boom.

Read more »

Young woman working at modern office. Technical price graph and indicator, red and green candlestick chart and stock trading computer screen background.
Investing Articles

Is the Royal Mail share price a buying opportunity?

With a 6% dividend yield and a price-to-earnings ratio of 3, is the Royal Mail share price in buying territory?…

Read more »

Scene depicting the City of London, home of the FTSE 100
Investing Articles

3 FTSE 100 shares! Should I buy them?

I'm searching for the best FTSE 100 stocks to buy following recent market volatility. Are these blue-chip UK shares too…

Read more »

macro shot of computer monitor with FTSE 100 stock market data in trading application
Investing Articles

Should I buy one of the cheapest shares on the FTSE 100 index?

This Fool explores one of the cheapest stocks on the FTSE 100 index by share price and decides if he…

Read more »

Asian Indian male white collar worker on wheelchair having video conference with his business partners
Investing Articles

With trading suspended, where could the Eurasia Mining (LON:EUA) share price go next?

This morning, the EUA share price was suspended pending an announcement - so could improving sales send the share price…

Read more »

Asian Indian male white collar worker on wheelchair having video conference with his business partners
Investing Articles

Are the FTSE 100’s top income stocks a bargain?

The FTSE 100 is renowned for its value and dividend stocks. So, are the index's top income stocks worth a…

Read more »

Compass pointing towards 'best price'
Investing Articles

Scottish Mortgage shares have slumped 40%. Time to buy now?

Scottish Mortgage Investment Trust (LON: SMT) shares have rewarded shareholders well in recent years. I'm thinking of buying now they're…

Read more »

Mindful young woman breathing out with closed eyes, calming down in stressful situation, working on computer in modern kitchen.
Investing Articles

3 recession stocks I’d buy in a hurry

With the economic outlook getting worse, our writer highlights a trio of recession stocks he would consider buying for his…

Read more »