The Motley Fool

1 UK stock to buy and hold for a long time

Business man on stock market crash financial trade indicator background.
Image source: Getty Images

If I had bought Gresham Technologies (LSE: GHT) stock some 10 years ago, it would have been a penny stock then. And it would have been exactly the kind of penny stock an investor like me would like to buy. Its share price has exploded over the years. By now, I would have more than tripled my money on it. 

Greater visibility on revenues

And going by some of the latest developments for the company, I am hopeful that it can continue to be a rewarding stock to buy and hold for a long time. Its biggest client, Australia and New Zealand Banking Group, better known by its abbreviation and ticker as simply ANZ, has just renewed its contract with the company. It says that this will “materially increase its investment” in it. 

One Killer Stock For The Cybersecurity Surge

Cybersecurity is surging, with experts predicting that the cybersecurity market will reach US$366 billion by 2028more than double what it is today!

And with that kind of growth, this North American company stands to be the biggest winner.

Because their patented “self-repairing” technology is changing the cybersecurity landscape as we know it…

We think it has the potential to become the next famous tech success story. In fact, we think it could become as big… or even BIGGER than Shopify.

Click here to see how you can uncover the name of this North American stock that’s taking over Silicon Valley, one device at a time…

It specifically mentions its software Clareti in this context, that software being used to conduct banking transactions in a scalable and safe way. The platform’s revenues from ANZ alone are expected to increase by 35% during the year. This is significant, because Clareti accounts for the lion’s share of the company’s total revenues. 

Healthy results for Gresham Technologies

This builds on its already healthy results for the first half of 2021. Gresham Technologies’ revenues grew by 19% and its adjusted earnings before interest, taxes, amortisation and depreciation, better known as EBITDA, grew by 17%.  

These numbers are encouraging, but I think it is important to highlight that it reported a net loss in the latest update. This was on account of its acquisition of Electra, which is another software provider that caters predominantly to US-based buy-side companies. For that reason, this was not  a loss due to a recurring cost. And going by the expected improvement in its revenues this year, I think it is reasonable to expect that it can still post a profit for the year. In fact, in the past years, it has indeed been profitable. 

Small stocks and the liquidity problem

A less easily reconciled challenge when considering whether to buy the stock or not, is its size. As a small company, with a market capitalisation of less than £150m, there are relatively few transactions in the stock on a daily basis. As a result, if I would like to sell the stock, there is no guarantee that I will find buyers as quickly as desirable. 

Is this a stock to buy?

But then again, going by the company’s past financials and its share price movements, this is a stock for the long term. There is potential to make quick capital gains from it, for sure. But I doubt if that will really give me the doubling or tripling in capital that can happen if I hold it for a long enough time. And if it continues to grow over the next decade as well, I reckon that it would be a far more liquid stock by then as well. It is a buy for me. 

One Killer Stock For The Cybersecurity Surge

Cybersecurity is surging, with experts predicting that the cybersecurity market will reach US$366 billion by 2028more than double what it is today!

And with that kind of growth, this North American company stands to be the biggest winner.

Because their patented “self-repairing” technology is changing the cybersecurity landscape as we know it…

We think it has the potential to become the next famous tech success story.

In fact, we think it could become as big… or even BIGGER than Shopify.

Click here to see how you can uncover the name of this North American stock that’s taking over Silicon Valley, one device at a time…

Manika Premsingh has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.