When the market crashes, investors react differently. Warren Buffett sold airline stocks, which has been well documented. Others are finding opportunities to buy.
I always keep a close eye on technology stocks. Nick Train, the successful UK fund manager, also likes a software stock. It never hurts to keep an eye on what the best money managers are doing. With that in mind, two tech companies I really like at the moment are Just Eat (LSE:JET) and Moneysupermarket (LSE:MONY).
Market crash opportunity #1
With the Covid-19 pandemic, a government lockdown, and resulting market crash, services such as food delivery have seen unprecedented demand. It must be noted that the online takeaway market is not entirely new. Between 2008 and 2018, there was an increase of over 500% in UK food orders made online.
Just Eat is one of a few major players in this industry. Uber Eats and Deliveroo are other well known names in this space. Just Eat has invested heavily in its delivery network and technology capabilities to fend off competitors. This has been its primary reason for reporting losses. City analysts are expecting it to be back in the black in the next full-year results.
The market crash saw nearly 25% of its share price wiped off between 23 February and the market bottom on 23 March. It has surged away from these lows of 5,820p per share, and is currently trading nearer to 9,000p. Over the past five years, JET’s share price has increased close to 20%.
A major merger with Netherlands-based Takeaway.com and an exclusive deal with Greggs further reinforce my confidence in this stock during this market crash. I am excited by Just Eat’s potential, especially in an industry that Forbes estimates will be worth a staggering $200bn by 2025.
Moneysupermarket is another great tech stock that I feel is a market crash opportunity. It has been performing impressively with noted rises in revenue, profit, and earnings per share.
These three aspects are crucial when I analyse a company and its investment viability. Between 2018 and 2019, MONY’s pre-tax profit rose by 10%, while revenue and earnings per share rose by 9%. I also expect the money division of MONY to fare better in the future as I expect that consumer credit applications will increase due to the lockdown.
The crash saw close to 30% wiped off its share price value, with the market bottom per share price trading at 227p. It currently trades at over 310p per share which shows MONY is recovering.
A healthy dividend yield of close to 4% is an attractive proposition for investors and I like the look of it. It must be noted that the dividend is covered by earnings 1.6 times, meaning it probably won’t be in danger of a cut.
Moneysupermarket is well established and its growth is steady, which is promising. It doesn’t look like there are many bumps in the road ahead. It is very profitable with increases in reported profit levels for the previous five years as well as in dividends per share. Overall, I feel MONY is a good market crash tech stock opportunity.