Tech stock

Accesso is a tech business based in the UK providing virtual queue management, ticketing, point of sale and guest management software for many venues and businesses across the world. Its most prominent customers include public attractions, theme parks and other tourist hotspots.

So what’s happening with the Accesso share price currently? Well, as I write, the shares are trading at 662p. They look like they’ve hardly budged in a year as 12 months ago they were at 660p. But the stock had actually been higher, and it has dropped 22% since the end of March.

To buy or not to buy?

So what are the pros and cons of me buying this stock?

FOR: Accesso has a good performance track record. I understand past performance is no guarantee of the future, however. Discounting 2020 results, as the tourism sector was hurt by the pandemic, Accesso has been able to grow revenue and profit in recent years. This is encouraging and I only see this rising as the world continues to reopen. Pent-up post-pandemic demand could also boost its results in the future.

AGAINST: It’s a business with a big presence, however in the tech space it’s not exactly a household name. My concern here is that if a better known tech firm with more financial muscle and presence entered this lucrative market, Accesso could be pushed aside causing the stock to lose market share.

FOR: The company has been making positive moves to increase its market share, profile and presence in recent years. Deals with Japanese and Canadian tourism businesses to manage their services have given it access to previously untapped territories. This should boost performance and any returns I hope to make.

AGAINST: Accesso saw many of its operations disrupted due to the pandemic. The global health crisis meant the businesses it serves were hit hard and that fiscal year its financials took a hit. Covid-19 hasn’t disappeared. In fact, certain countries have seen temporary restrictions to curb rising levels of infection. There’s still a risk that the pandemic and virus could impact operations and performance.

An AIM stock I’d buy

Accesso shares look attractive to me and good value for money on a price-to-earnings ratio of close to 15. The general market for its solutions seems to be on the rise and pent up demand has played a big part in this.

It has done well recently in signing up new partners to increase its presence and profile globally.

One of the key points that stands out to me is that many Accesso insiders own shares. This is a huge positive. If those charged with running the business are willing to part with their cash, then maybe I should too. After all, who better understands if further success is ahead than those in charge? Right now I’m tempted to buy Accesso shares.

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Rise in demand

Accesso is a technology firm based in the UK. It provides queue management, ticketing, point of sale, virtual queuing, and guest management software solutions to over 1,000 venues globally. Accesso’s core customers include public attractions, theme parks, and many travel and tourism related businesses.

Due to the pandemic, demand for technology has risen. This should set Accesso in good stead to capitalise on this rise in demand and boost performance in 2022 and beyond.

As I write, Accesso shares are trading for 788p per share. This time last year, shares were trading for 445p, which is a 77% increase in 12 months. Many tech stocks have seen shares rise in the past year.

Positives

Firstly, Accesso announced a lucrative three-year partnership with Sensei Technologies in December. Sensei has a huge presence in Japan and will drive marketing and sales activities. Accesso will keep control over products, maintenance, and client management, however. This partnership could be an excellent move in my opinion. Accesso has been looking to make strides in the Far East market and this partnership will enable that.

In addition to the agreement with Sensei, Accesso also agreed a deal to partner up with Canadian amusements firm Calaway, which it announced in November last year. Calaway is one of the biggest amusement businesses in Canada and this partnership will also provide Access with a new revenue stream and boost its profile in North America.

Next, Accesso has reported trading has been positive recently and I expect as the world attempts to continue to reopen, this upward trend will continue. An interim report released in September saw revenue, profit, net cash, and earnings per share all rise compared to 2020 levels. Most of these also reached or surpassed 2019 pre-pandemic levels which was pleasing to see. 2020 progress was hampered by the height of the pandemic.

Finally, many insiders own Accesso shares, which I usually like to hear. Who better to know if a firm is on the right track to succeed, and if these insiders are willing to invest their own money, then I feel better about buying shares for my own portfolio too.

Tech stocks have risks

The pandemic is still a major problem for the travel, tourism, attractions, and amusement segments of the economy. New variants and varying restrictions across the world can affect operations for these types of venues. Revenue, performance, and growth could be affected for Accesso. Furthermore, competition in the technology sector is intense. Accesso may provide a set of solutions vital to the new world but there are larger established tech firms that could enter the market and affect Accesso’s progress.

Overall, I like Accesso as a tech stock. I believe its products and services are a vital component to the world we live in now and I don’t see things going back to the way they were in terms of queuing and point of sale. I think 2022 could be a great year for Accesso. At current levels, I would buy the shares for my portfolio.

The post This tech stock could be in for an exciting 2022! appeared first on The Motley Fool UK.

Here, I’m going to highlight three UK shares that have seen insider buying activity over the last month. Should I follow these insiders and buy shares in these companies for my own portfolio?

Accesso Technology

Let’s start with Accesso Technology (LSE:ACSO), which provides virtual queuing and online ticketing solutions to amusement parks and venues. It saw buying from three insiders, including the CEO and chairman, between 23-25 March. Combined, they spent over £250,000 on stock.

I think this activity looks interesting due to the fact it’s a ‘cluster buy’ – where multiple insiders have bought stock within a short space of time. This pattern is generally quite bullish because it shows there’s a consensus of opinion within the company that the stock’s undervalued.

With the global economy shortly set to reopen (and many consumers cashed up), I think this stock could potentially move higher. Having said that, it’s not a buy for me personally. Growth has been a bit inconsistent in recent years and the group is expected to make a large loss this year. Additionally, the company’s return on capital employed (a measure of profitability) has been quite low in the past. I think there are probably safer reopening stocks I could buy. 

Clarkson

Another UK stock that’s seen recent director dealing is Clarkson (LSE: CKN). It provides integrated shipping services including broking and support services. Regulatory filings show that the wife of chairman Sir Bill Thomas purchased 3,631 shares at a price of £27.40 per share on 30 March. This was worth about £100,000. This purchase increased the size of their holding by 175%. Since then, board member Heike Truol has also purchased 1,607 shares, spending about £45k on stock.

This is another stock that looks interesting in the current macro environment. The global economy is picking up speed right now, and this means shipping activity is likely to increase. Recently, the company said the medium-term macro environment for shipping is favourable as demand/supply dynamics are set to improve, post Covid-19.

Would I buy the stock though? Probably not. It’s a bit too cyclical for me. In 2019, for example, the company generated a net loss of £12.8m.

CVS Group

Finally, there’s CVS Group (LSE: CVSG). It’s a leading provider of veterinary services. Here, chairman Richard Connell spent around £90,000 on stock on 6 April, purchasing 5,000 shares.

This stock does look quite tempting. The pet healthcare market is growing at a healthy rate and companies such as CVS are benefitting. Its recent half-year results, for example, showed an 11% increase in revenue and a 37% rise in earnings per share for the six months to 31 December.

However, I do have some concerns about this stock. One is that the company is yet to resume paying dividends after cancelling the payout during Covid. Another is the stock sports a P/E ratio of about 30, which adds risk.

Weighing everything up, I think there are better growth stocks I could buy right now.

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Recently, I’ve noticed some interesting insider buying at Accesso Technology (LSE: ACSO). This is an under-the-radar UK company that specialises in virtual queuing and online ticketing solutions for amusement parks and other similar attractions. Is this director dealing an indicator that I should buy Accesso Technology shares? Let’s take a closer look.

Director dealing in Accesso Technology shares

Regulatory filings show that in late March, three insiders at Accesso Technology purchased shares. 

On 23 March, CEO Steve Brown bought 13,000 at a price of £5.75 per share. Then, on 25 March, non-executive director Andy Malpass picked up 18,000 at a price of £5.75. Finally, on 26 March, Chairman Bill Russell acquired 13,000 shares at a price of £5.80 each. 

Combined, these insiders spent just over £250k on Accesso Technology shares in the space of a few days.

Bullish insider buying

I think this director dealing is quite bullish when I consider that the global economy is about to reopen and there’s a lot of pent-up demand from consumers to visit theme parks, fairs, festivals, zoos, sports arenas, and other similar attractions.

It’s worth noting that in the company’s recent full-year 2020 results, posted on 23 March, management was quite optimistic about the future after a challenging year last year.

“With vaccination programmes underway in our key geographies, we feel confident of a progression to more normal trading conditions in 2021. With the strength of our technology offering, solid relationships, and an amplified focus on technology by venue operators, we are well-set to re-embark on our growth journey,” said CEO Steve Brown.

“We now have a growth-ready foundation on which to address substantial pent-up demand as the pandemic recedes,” he added.

Given the insider buying and the confident tone from management, I think the stock looks interesting right now from a ‘reopening play’ perspective.

My concerns

That said, I do have some concerns about investing in Accesso Technology shares.

One is that the company was experiencing some challenges before Covid-19. In 2019, for example, revenue was below guidance due to lower-than-anticipated new customer wins and adjusted basic earnings per share were down 54% year on year. So, this isn’t a company with a perfect growth track record.

Secondly, return on capital employed (a key measure of profitability) was quite low before Covid-19. In 2018, it was 2.4% while in 2017 it was 4.4%. So, unlike some of my favourite UK growth stocks such as Softcat and dotDigital, this isn’t a company that’s highly profitable on a consistent basis.

Should I buy Accesso Technology shares?

Weighing everything up, I’m not convinced that Accesso Technology is a great fit for my portfolio at the moment. I like to invest in companies with consistent growth track records and Accesso’s track record is a bit patchy.

Having said that, I think the stock could potentially move higher from here as the world reopens post-Covid.

The post Insiders are buying Accesso Technology shares. Should I buy too? appeared first on The Motley Fool UK.

The story until now

Accesso is a company that isn’t that well known. It’s an AIM-listed stock that uses tech solutions with regards to virtual queuing, ticketing, distribution and even Covid-19. Over the past decade, it has purchased several smaller companies that fit in with the operations in order to obtain better levels of efficiency.

For example, in 2017 the company bought The Experience Engine. This ties in with the ability for retailers to engage with their clients at different stages of the customer journey, via mobile apps and other electronic devices.

Up until that point in 2017, the Accesso share price had been performing strongly. The technology and software solutions worked well, and the acquisitions were approved of. Unfortunately, in late 2018 the share price crashed from 2,930p down to 1,450p at the end of December, and continued to tumble into 2019.

One reason for this was a failed acquisition that ended up costing $1.7m in professional fees. Another reason was that results struggled to keep up with expectations. As mentioned at the start, tech businesses can achieve impressive growth rates, but when this slows down, some investors get overly worried.

My outlook for the Accesso share price

The bottom line is that the Accesso share price continued to trend lower over 2019. It was also hit (as most stocks were) by the market crash in Q1 2020. But from the lows of sub-200p, the past year has seen a reversal upwards. Yet at levels just above 700p, it’s a far cry from those 2018 prices.

Unfortunately, I don’t see too much to really get me excited for the outlook of Accesso. Group revenue for 2020 came in at $56.1m, in comparison to the 2019 figure of $117.2m. The loss was smaller than the previous year, but it still returned a loss in both years, which isn’t something to write home about.

I think investors have looked beyond those results during the 220% rally. Firstly, the 12-month period takes in the time just after the lows from the stock market crash. So I could argue it’s a more generous return as the period starts almost at the lows. 

Secondly, I think investors are caught up with the optimism about the reopening of the economy later this year. The Accesso share price has rallied (logically) on the assumption that travel, tourism, ticketed events and other social gatherings will increase. I think this is now priced into the stock. Thus, I struggle to see much further upside at the moment.

I’m happy to be proved wrong, but I don’t see any compelling reason for me to jump in and buy right now. As a result, I’m staying away, and will look for opportunities elsewhere.

The post The Accesso share price is up 220% in a year! Here’s what I’m thinking appeared first on The Motley Fool UK.

What is Accesso Technology?

Accesso is a virtual queuing, ticketing, and distribution company. Its solutions operate in theme parks, water parks, cruise lines, museums, and various other attractions. Accesso eliminates the hassle of queuing, instead you get a token that tells you when it’s your turn. Accesso functions at over 1,000 venues in over 30 countries. This is a huge reach to the guest experience and tickets & distributions markets, which are valued at $1.5bn and $1.9bn respectively.

Bull case for Accesso Technology share price

The recent increase in share price can be largely attributed to the recent full-year results issued by Accesso. Revenues of $56.1m exceeded revised projections for 2020 by 3%. This increase in revenue was in the face of multiple worldwide lockdowns. This gives me huge confidence in the company’s direction for 2021.

The firm also announced a stronger liquidity position, with a rise in net cash to $29.7m. This was also backed up by a new three-year debt facility, which will provide $18m of liquidity. This gives the company a strong cash base moving forward.

Most importantly, as lockdown restrictions are lifted, people will want to visit theme parks again. The guest experience industry will thrive as people are allowed to visit their favourite attractions freely again. Accesso’s business model is built on this freedom and will profit directly from this reopening.

Bear case for the share price

The fact that the Accesso Technology share price had been falling since 2018 — before the pandemic shut down the attractions industry — does worry me.

The company was a classic example of an overinflated growth share, I feel. It offered a new, exciting technology that investors flocked to, inflating the price/earnings ratio to 70 at one point. This came at the cost of neglecting some of the shaky fundamentals that began to present themselves in the 2018 annual report. By 2019, cash issues led to the Accesso bubble bursting, sending share prices tumbling. If shaky management happened once, who’s to say it won’t happen again?

There’s also the problem that the pandemic still exists. Although vaccines are being rolled out, there are some concerns about the AstraZeneca vaccine’s safety that have impacted the rollout in some countries. And distribution globally for all vaccines remains patchy. This could halt the opening of the public attractions that drive Accesso’s business.

My Verdict

But I believe the Accesso Technology share price will continue to rise throughout 2021 as much of its business reopens, even if not as fast as it has done. The firm has also strengthened its balance sheet throughout 2020, learning from previous mistakes. There are still risks to consider, but I think the worst is behind this company. Therefore, I could see this stock being a solid addition to my portfolio.

The post Will the Accesso Technology share price keep climbing? appeared first on The Motley Fool UK.

Accesso does virtual queuing systems for theme parks and other attractions. Instead of wasting much of your time queuing up for rides, you get a fancy token thing that does the queuing for you and tells you when its your turn.

Sales had been growing, US theme parks came on board, and there was a world of opportunity. The Accesso share price soared, reaching £30 in September 2018.

As I write today, the shares are changing hands at around 300p. That’s a 90% fall in almost exactly two years. And it’s nothing to do with the Covid-19 crisis. No, even before the stock market crash kicked off in February 2020, Accesso shares were hovering around 550p. The pandemic has merely kicked the shares when they were very much already down.

Stunning growth share valuation

At the high point, Accesso shares were on a trailing price-to-earnings multiple of over 70. To me, it was a prime example of an overheating growth share. The company offered a new technology, and it was in demand in a growing market. But, as so often happens, investors saw only the upside and piled in. And they really weren’t interested in the potential downsides. Everyone had ignored Warren Buffett’s golden rule: Never lose money. No, they didn’t just ignore it. They shredded it, burned it, and danced on the ashes.

Then, the company abandoned “a significant and well-advanced acquisition opportunity” in October, and that was a trigger for investors to start leaping off the bandwagon. The 2018 full-year results started showing some weaknesses, and by the time 2019 results came around, revenue had failed to meet expectations. We saw a statutory pre-tax loss, and cash had dwindled to almost nothing.

By May 2020, the firm was raising new cash with an equity issue and taking on extra debt facilities. What had gone wrong?

I think it was the classic over-egged growth share thing. Too much growth by acquisition too fast. And I think the board, just like the shareholders, were blinded by what they saw as golden opportunities. And they all forgot Buffett’s dull but sensible rules.

Time to buy now?

After all that, am I really considering buying now? I am. It’s because I’m seeing a company that looks a fundamentally good one, with genuine potential. And I think the best time to buy a growth share is often after the initial bubble has burst, and when the following crash-and-burn phase is over.

The first half of 2020 produced revenue of $24.6m, way down due to Covid-19 shutdowns, but better than expected. There’s an adjusted EBITDA loss of $7.4m, but the cash situation looks healthy enough. The refinancing in May raised $46.1m, and Accesso had net cash of $30.8m on the books at 30 June.

I think Accesso looks well poised to profit when pandemic restrictions finally end. And I’d buy now for what I see as a new, more sustainable, growth phase.

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But the airline sector is notoriously cyclical. The shares were down by another 8% at the time of writing on Monday, after management warned that this year’s half-year loss would rise to £275m, from £18m last year.

Is this the wrong time to be buying airline shares? Or is easyJet a contrarian buy for investors with a long-term view?

What’s gone wrong?

Although it’s normal for easyJet (and others) to make a loss during the quieter period from October to March, figures released by the firm today suggest to me that conditions may be tougher this year.

The company said that although total revenue is expected to have risen by 7.3% to £2,340m during the six months to 31 March, revenue per seat is expected to have fallen by 7.4% while costs have risen.

Unsurprisingly, easyJet says that “many unanswered questions surrounding Brexit” have resulted in weaker customer demand and softer ticket yields.

The figures weren’t a disaster. But management said that “our outlook for H2 is now more cautious”. I suspect City analysts will trim their full-year forecasts for the airline after today’s news.

However, shareholders should take comfort from the group’s healthy finances and modest valuation. The stock now trades on about 9 times forecast earnings, with a 5.3% dividend yield. I think easyJet remains safe to hold and could be worth considering as a contrarian buy.

I was wrong about this

Unfortunately I was wrong to be bullish about ticketing and virtual queueing technology firm Accesso Technology Group (LSE: ACSO) last year.

Shares in this business — which sells virtual queueing systems for theme parks and ticketing technology — have fallen by about 70% since last September. It’s a dramatic reversal for a company that was previously seen as a stunning success story.

Accesso’s shares started to fall in October last year, after the group’s half-year results showed that pre-tax profit fell by 12.5% to just $1.4m, despite sales growth of 17%.

The shares plunged again in February this year after the company said it had spent $1.7m on an acquisition opportunity before deciding not to proceed. The board said it was now going to carry out “a review of the Group’s investment priorities” but didn’t explain what this meant.

Last week Accesso published its full-year figures for 2018. These showed that operating profit fell by 37.6% to $6.3m last year, while net cash fell from $12.5m to just $0.5m. Chief executive Paul Noland also warned that the firm had decided to increase investment in new products, suggesting that more cash will be required this year.

Will Accesso bounce back?

This firm has some big contracts for its original virtual queueing products and it seems to be a market leader in this field. However, Accesso has now made so many acquisitions that I’m not sure how fast the underlying business is really growing.

The group isn’t very profitable either, with an operating margin of just 5.3% last year.

The overall picture looks complex and uncertain to me. Although this firm has some good products, I’m not convinced it’s a great business to invest in. I plan to avoid the shares for now.

The post Is the easyJet share price the bargain of the year? appeared first on The Motley Fool UK.

But then the wheels started to come off. Since then, the share price has crashed 75% — including a 15% fall on the morning of the company’s 2018 full-year results Wednesday.

At their peak in 2018, Accesso shares were trading on a trailing P/E of 70, and on a P/E relative to forecasts of 60. After their five-bagging performance, in my opinion that was just plain nuts.

Since then, reported figures have been merely very good rather than out of this world. And as is almost always the result of a growth slowdown, the get-rich-quick brigade, whose eyes were on the stars rather than on fundamental valuations, ran off in search of their next bandwagon.

Good results

Meanwhile, 2018 brought in another set of impressive results. Revenues rose by a fairly modest 15.5%, and though reported operating profit fell by 38% (there have been accounting standards changes), the adjusted figure rose by 26%. Adjusted earnings per share gained 41%.

Net cash, however, pretty much disappeared, with just $0.5m on the books from $12.5m a year previously.

It’s difficult to analyse the firm’s underlying performance at the moment as it’s been in a strong acquisitive phase, and I’m always cautious of companies possibly over-stretching themselves in a relentless pursuit of growth.

But we’re still looking at double-digit EPS growth forecast for the next two years, which would take the P/E down to 11 by 2020.

I’ll want to dig deeper, but I’m starting to see Accesso as a tempting share price recovery candidate.

Accounting

Over at Goals Soccer Centres (LSE: GOAL), the “leading operator of outdoor small-sided soccer centres” has problems of its own.

Listed on the Alternative Investment Market (AIM), Goals’ shares were suspended on Wednesday morning at the request of the company because of historical accounting errors.

We had previously been made aware that “the board now expects the 2018 full-year results will be materially below expectations,” and the shape of the shortfall is becoming a little clearer.

After working with auditors, Goals has now “concluded that there has been a substantial misdeclaration of VAT, going back over several years.” A provisional figure of approximately £12m is being suggested, though the final value is still to be determined. The firm intends to engage promptly with HMRC and is in talks with its lenders aimed at agreeing new facilities.

Lessons

I really can’t say anything about Goals itself at this stage, but I think there’s a general lesson for investors — be extra cautious when investing in AIM stocks.

It’s always been difficult and costly for small companies to get themselves listed on the London Stock Market and raise capital, and that’s why AIM was launched in 1995. It imposes what could be kindly described as a “more flexible” regulatory system, and that’s helped get many successful companies off to good starts.

But with less strenuous oversight, accounting errors can be larger and more frequent — and AIM is also less resistant to fraudulent practices.

I’m not saying don’t invest in AIM stocks, but I’d only ever commit a small portion of my investing cash to them.

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That’s why, in addition to building up my cash reserves, I’ve started drawing up a list of ‘expensive’ looking businesses I might just buy a slice of if they were to come on sale in a general market meltdown. Here are just three I’ve got my eye on.

Not cheap enough…yet

£700m cap ticketing and virtual queuing solution firm Accesso Technology (LSE: ACSO) has thoroughly earned its market darling status. Had you bought the shares five years ago and learned to sit on your hands, the value of our capital would have grown by 300%. 

Given the growth opportunities available — such as providing solutions for music concerts and sporting events, in addition to building on its established presence at many tourist attractions — I still think the company warrants attention from growth investors. Last week’s announcement of a strategic partnership with Groupon is yet another positive development. 

Nevertheless, all this promise comes at a price. On 46 times earnings, it could be argued that the company still looks priced to perfection, even if this valuation is set to become far less punchy next year if analyst targets are hit. 

Having looked at the business back in June, challenger law firm Keystone Law (LSE: KEYS) continues to grab my attention. I’m not alone. Even after taking into account the market’s recent wobble, the shares are still worth twice what they were when it listed on AIM in November last year. 

Keystone continues to grow at a rapid pace, so much so that it’s already smashing its own earnings estimates. Revenue rose just under 30% in the six months to the end of July with profit before tax soaring 40.3% to £2.3m. As evidence of its growing profile, the £120m cap also increased its number of lawyers by more than 50% to 31 over the reporting period and continued investing in its IT platform. 

A forecast price-to-earnings (P/E) of 33 is too hot for me in the current political and economic climate, but with first mover advantage, the defensive qualities of its work, and CEO James Knight describing the UK legal services sector as “ripe for disruption“, I’m keen as mustard to add the company to my portfolio. 

Doubled in value

Fryer management firm Filta Group (LSE: FLTA) is certainly the least glamorous of the trio, not that you’d know by the performance of its stock.

Since coming to the market in 2016, the Rugby-based business has more than doubled in value — further evidence that backing market minnows can seriously improve your wealth, so long as you can accept greater volatility and are fortunate/skilled enough to get in early.

It’s not hard to see why growth aficionados have warmed to it. Last month’s half-year results revealed a 22% rise in both revenues (£6.6m) and pre-tax profit (£1m). Currently expanding into Canada and Germany at a fair clip, Filta added 10 new franchises and 28 mobile filtration units in the period, bringing the total in operation to 192 and 422 respectively.

Right now, the stock is trading on 28 times earnings for the current year — too punchy for my liking. That said, a general market sell-off could be just the ticket to get me involved.

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