Massive growth potential in a very profitable industry
One of those actions, in my opinion, is the store asset manager Polar capital (LSE: POLR). Its 12 autonomous teams manage 25 funds, some of which are focused on the tech industry and have performed very well during the pandemic. The group aims to recruit the best investment teams and give them the necessary infrastructure to manage their funds in order to outperform the market.
He has had some success in increasing the number of teams under his umbrella. This has translated into strong growth. There is no reason that this cannot continue. The business model is very scalable as new investment teams can be easily integrated.
The group has net cash of £ 107million, so it is well funded to see Covid-19. The group is making progress in developing an Asian clientele, which should really help it grow its assets under management and profits going forward.
In difficult economic conditions, the group maintained its dividend. But I think the main reason for owning stocks is the potential for future growth in stock prices.
The undervalued technological part with enormous growth potential
I think the data solutions business D4T4 (LSE: D4T4) is a potentially undervalued technological part. A price / earnings ratio of 20 compares very favorably with other data-driven stocks, as well as the tech industry in general.
Yet there is more reason to believe that the company and its share price can grow. Gross profit margins have increased and more recently amounted to over 60%.
The group has no debt, which is a major asset. Especially since market conditions are difficult and customers take longer to sign agreements.
Once the Covid-19 situation is normalized, the board plans to start increasing the dividend again so that the stocks offer huge growth potential with modest income. I think the company’s goal is to invest in the future growth.
Finally, the digital transformation within organizations, perhaps accelerated by the pandemic, will continue and this will help D4T4 to develop.
Go strong and go further
Team17 (LSE: TM17), is a games company that I bought because of its huge growth potential. The gaming market is in favor of investors right now, which is expected to continue. The company has an entrepreneur founder who still has a significant stake in the company. He also rapidly increased his income.
More recently, shares were bolstered by the announcement that Team17 had signed a publishing deal with Tencent Games’ NExT Studios for its game, Crown tip. The announcement builds on the developer’s growing record with Chinese game companies that could be a platform for profitable growth in the future.
But stocks have retreated in the past week or so. This could give them good value for money for now, even though they have had a solid 2020 so far.
Andy Ross owns shares in Team17. The Motley Fool UK does not have a position in any of the stocks mentioned. The opinions expressed on the companies mentioned in this article are those of the author and therefore may differ from the official recommendations that we make in our subscription services such as Share Advisor, Hidden Winners and Pro. At The Motley Fool, we believe that considering a diverse range of information makes us better investors.