When it comes to looking for growth bargains, companies in some sort of technological field often come to mind. Here are three that I think could make nice candidates for the coming years, although they’re not without risk:
Nanoco Group (LSE: NANO) is an intriguing proposition. To quote the company itself, “Nanoco leads the world in the research, development and large-scale manufacture of heavy-metal free quantum dots and semiconductor nanoparticles for use in displays, lighting, solar energy and bio-imaging“.
The company has a patented technology for making these little doodahs on a large scale, and the demand for the LCDs in which they’re used can surely only grow — especially as rules restricting toxic heavy metals are imposed.
Now, Nanoco is not expected to record a profit until July 2016, with forecasts suggesting a P/E of 65 for that year on today’s 109p share price — and there are quite a few shorters out there. I wouldn’t buy right now, but I’ll be examining this year’s results.
Proteome Sciences (LSE: PRM) develops protein and peptide markers for clinical use, including the diagnosis of things like Alzheimer’s, stroke and cancer. That’s clearly a technology with great potential, but again we’re looking at a company that’s not yet in profit.
Results for 2014 released in May showed a 9% rise in revenue and told us of “strong underlying growth in biomarker services“. And though the year ended with a post-tax loss of £3.6m, chairman Christopher Pearce said he expects to see “strong growth in revenue and news flow in 2015“. With no profit forecast yet it’s hard to value the 27p shares, but Proteome is worth keeping an eye on.
Vislink (LSE: VLK), a company that develops advanced video technology for the media, law enforcement and defence markets, has not grown as quickly as some earlier investors had hoped. But at 60p the shares have still trebled in five years and have gained 32% in the past 12 months. After a steady climb since the start of 2015, could we be heading for a golden period?
Vislink recorded its first profit in 2012, and by 2014 it beat expectations with an adjusted operating profit of £7.2m from revenue of £61.9m — and paid a decent dividend too. At the time of the report in May, chairman John Hawkins reckoned that 2014 had been “a transformation year“. And with forecasts putting the shares on a P/E of 12.5 this year, dropping to 11.4 next, there might be a transformation in investors’ rewards, too.
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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.