It might be bad days for most of FTSE 100 stocks as we battle the new coronavirus variant. But some stocks have managed to buck the trend. Like Molten Ventures (LSE: GROW), the venture capital fund that invests in European technology startups. It might be better known as Draper Esprit, its name till very recently.
Molten Ventures reports strong results
The stock rose by almost 5% yesterday from the day before. And it is up by another 1.3% in today’s trading as well. This increase follows the release of its interim results for the six months ending 30 September 2021 yesterday. The company showed a smart increase in its gross portfolio value from the comparable period last year.
It has also seen a rise in its net asset value since then. Importantly, the company is in the right sector at the right time. As it notes in its results release, the pandemic has accelerated the shift towards more online activity.
Investors like the FTSE 100 stock
It is little wonder then that Molten Ventures has not just seen good growth, but has also found favour among investors. In the past year, the stock has risen by almost 40%. It has seen almost runaway growth since the stock market crash of March 2020. By October last year, it was already back to its pre-pandemic highs. And by early September this year, it was at almost double its pre-pandemic levels. It has fallen since, but still remains quite elevated compared to where it was before the pandemic.
As a result, it is a bit expensive if I compare its net asset value per share to its share price. But I reckon that is only because the outlook for the stock is strong. The company says in its latest results that “…. portfolio growth is already well ahead of our stated financial objective of 15% gross portfolio fair value growth for this financial year, and our portfolio continues to perform strongly”.
Would I buy it now?
With the omicron coronavirus variant wreaking havoc at the stock markets, I think investor demand for its stock will only grow stronger now. And I think that explains why it is still robust even while the rest of the market falls.
However, like with all my investments, I find it instructive to remember that the situation might change anytime. If the virus comes under control and the FTSE 100 index rallies again, the Molten Ventures’ stock could fall. After all, November has not been a good month for the stock until yesterday, even though the markets were strong for most of it. I do not think this is a coincidence but a reflection of the fact that it looks like a good stock to buy when our technology dependence looks like it will increase.
On the whole, I like this FTSE 100 stock. But I do believe that it has run up quite a bit already. I would buy it on a dip.