How to define a ‘tech tiddler’ has become increasingly difficult. More than any other sector, this one is all about expectation, promise … and hope! Traditional valuation methods are usually completely ignored. But then, let’s face it, the same applies to a number of tech giants as recent IPO’s have exposed so dramatically.
So let’s try and keep it as simple as possible and just go by current market capitalization: The Footsie constituent ARM at £13bio would surely qualify as a ‘giant’. Who cares about the 54 P?E ratio? And what does it mean, anyway?
Pinkers would like to suggest the following definition for the ‘tiddler’: market cap below £1bio.
There are three companies to be singled out that fulfill this criterion: The first two are Chip maker Imagination Technologies capitalized at £665mio and video search engine Blinkx at £750mio. IMG used to be level playing field with ARM but then the latter took over the (Apple!) world… but Pinkers would never bet against IMG: a relatively small outfit with creative management and staff… they could just have that game changing card up their sleeve. Pinkers would definitely buy on recent weakness – a good punt!
Less of a punt but really a ‘no-brainer’ is Blinkx. Spun off from Autonomy in 2007, Blinkx is now the world’s largest video search engine. Annual growth approaching 100% with impressive profits, it simply is the world’s leader in the field. Again, a huge P/E ratio of 54, the same as ARM’s, but with MUCH greater potential. Even after the recent surge in share price, it represents excellent value. Best of all: still rather under the radar… To quote Neil Collins in this w/e’s FT: “Blinkx and you missed it!” Pinkers says: Dig in and enjoy the ride! Last but not least, a great take-over target… Google must be watching closely or have they missed the trick?
Number 3 on the list is probably the best bet of all: still completely overlooked despite right at the cutting edge of its sector, Ubisense is capitalized at a mere £45mio. The company provides detailed visibility into an organization never before thought possible. In relation to people, assets and service areas, Ubisense combines elements of business intelligence, process management and data visualization with GIS and advanced location software and hardware to offer Location Intelligence that operates in both online and offline environments. Ubisense provides location intelligence solutions for manufacturing, transit, telecommunications, and utilities. Read more about Ubisense. In short: U BUY SENSE!