It’s time to watch Altium (ASX:ALU) & Bravura Solutions (ASX:BVS) shares

I think it’s time to watch Altium Limited (ASX: ALU) shares and Bravura Solutions Ltd (ASX: BVS) shares because, depending on how the next three months go, these could be among ASX’s top ‘COVID-19 rebound stocks‘.

For our Rask Invest share research service we’re targeting very high quality ASX and global companies that have:

  • Low amounts of debt
  • A strong working capital position
  • Very sticky customer base, and
  • Lots of long-term potential

In the video below I explain the exact steps you can take to protect your portfolio as the world economy stalls and bankruptcies begin to appear. It also shows how to find and select companies which could emerge far stronger during the recovery. To subscribe to our YouTube channel click here.

Bravura (BVS)

Bravura Solutions is a wealth management software business established in 2004. Bravura offers software solutions and services to superannuation and pension funds, life insurers, investment companies, wrap platforms, private wealth advisers and funds administrators.

As at the half-year period just gone, Bravura said 78% of its total revenue was recurring and it was in a net cash (total cash minus current trade payables, contract liabilities and leases) of $51 million. While the company had $79 million of staffing costs, it seems unlikely the business’ profit would go to zero, and it could cut costs if it needs to.

Meaning, it could rebound quite well from a short or medium-term fall in the economy.

Altium (ALU)

Altium is an Australian multinational software business that was founded in 1985. It now has offices globally in places like San Diego, New York, Boston, Munich, Shanghai, Tokyo and Sydney. Its software focuses on electronics design systems for 3D PCB design and embedded system development. Its services include Altium Designer, Altium Vault, CircuitStudio, CircuitMaker, TASKING and Octopart.

It’s no secret that Altium has been growing fast as ‘the internet of things’ continues to pervade home and business. I think more engineers and designers will adopt Altium’s technology in 2020 because compared to competitors it is faster to implement, can be accessed via the cloud and it’s often lower cost. Meaning, engineers can still use it from their remote locations, onboard relatively quickly and the upfront costs of the software are palatable, even in this environment.

As of 31 December 2019, Altium had 46,693 subscribers (up 16% year over year), recurring revenue of 59% (total revenue was $US93 million), no debt and $US81 million of cash. It has very ‘clean’ financials which appear to me to be lower risk than many other ASX-listed companies right now.

Buy, Hold or Sell

I’ll be doing more research on these two companies this week for Rask Invest. I’ve followed Altium for a long time and each time I’ve done a valuation of its shares it has come back as being fairly valued or too expensive for my liking. That said, if the volatility continues and its major customers and users in China, Europe and the USA continue to feel the effects of COVID-19, we could see some very compelling short-term buying opportunities.

If you’re looking for some more rock-solid ideas to add to your watchlist or portfolio in 2020, grab a free copy of my investment report, below.

Disclosure: At the time of publishing, Owen does not have a financial interest in any of the companies mentioned.

Free report: 3 cloud stocks to buy now

As we emerge from COVID-19, some tech companies are growing faster than ever. Rask’s investment analysts have identified 3 growth stocks set to benefit. Big time.

We’ll send you our report for free, including the names, ticker codes and analysis when you enter your email address below.

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Free report: 3 cloud stocks to buy now

As we emerge from COVID-19, some tech companies are growing faster than ever. Rask’s investment analysts have identified 3 growth stocks set to benefit. Big time.

Click here to access this report for free, including the names, ticker codes and analysis.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Keep reading: