Ready to fly

By Apostolos Manthos

IT companies are revving up their engines as the leapfrog growth they are expected to experience in the coming months cannot sustain for long the robust systems that many of them deliver during their peak periods. Some even, seeing the coming wave of development, make acquisitions of power, thus adding more fuel to the fire of future growth.

So we have to say or rather write…

The second acquisition of strategic importance in Europe after the Accession of France was announced by his group Biography (PROF) by acquiring Euronext Centevo, which is based in Stockholm but maintains a more impressive presence in Oslo, serving large Asset and Treasury managers, as well as several banking organizations in Northern Europe. The initial picture on the dashboard after the announcement of the acquisition is almost identical to that of Ingia in the summer of 2017. So however it started sluggishly in the first sessions and then grew and increased to reach within a few months up to + 130% . Except that here we are now talking about the largest company that in 2022 can add 6 million in revenue and 1.5 million in EBITDA to Profile, while there are also significant development benefits from the great partnership that has begun with the giant Euronext. It should be emphasized that the share price, especially in relation to EV/EBITDA, trades at a significant discount of -65% compared to other similar companies abroad (Temenos, Factset, SS&C etc.), since it is in 6.5 against a. average 18.5. Also, according to the analysis that has seen the light of day in the last two years, the target prices given for 2021 are between 7 and 8 euros, while on them if we add the new financial data for the entry of Scandinavia. Centevo, 2022 prices may approach 10 to 11 euros. We are talking about revenues of up to +60% for 2021 and up to +120% for 2022. But the strategic moves do not end here as market news indicates the arrival of a new important partnership by the end of 2021 which will significantly change the international image of the Profile group. To all this, if we add the expectation of growth expected to be captured by the EU Recovery Fund. with the Greek government spending up to 6 billion euros in the coming years for digitization projects, the stock is probably one of the most promising investments for the coming years. Technically, what is shown in the daily price chart is the upper division of the pennant pattern, at 4.94 euros, an element that, if confirmed in the next meetings, can give as the target price of the triangle the length of the triangle, that is 6.00 at 5.95 euros. The first confirmation is seen from the number of businesses since in the last 12 sessions it has exceeded 370 thousand pieces.

The group also joined in the shopping dance Effort (QUES) through the subsidiary Info Quest Technologies and the acquisition of the company Team Candi, which is one of the main partners of Microsoft in the field of providing solutions for the “Modern Workplace” while specializing in the design and implementation of solutions, using Microsoft 365. applications and enable rapid automation of processes and digital and modern changes. Now especially when the use of Cloud technologies is more necessary, Info Quest Technologies with these development steps is investing in the Microsoft Cloud environment, thus leading Greek businesses in the new digital era. For example, Quest stock seems to be standing at a higher movement level, waiting for the next order of the upper division of 11.50 euros and continuing towards the next target of 13 euros. The long-term pivot of “Q” remains in full force, which until now has dominated price from 7.70 to 11.50 euros, declaring itself ready for sharp changes in the angle of the upward movement change.

Power growth is also expected Epsilon Net (EPSIL) following the acquisition of Data Communication and Singular Logic which will be merged in fiscal year 2021. The company through Singular Logic has already more than doubled the number of its customers in the field of business accounting and ERP applications, adding more than 40,000 new ones . customers. In fact, in the area of ​​ERP, Epsilon Net with United Logic has a share of 35% and claims 40% of Greek companies that have the use of old technology. Here, technically, the stock is shown on the daily chart to have risen above the support level of 4.40 to 4.34 euros and is preparing to return to the January sideways formation between 4.82 and 5.10 euros. The top driving role has been taken over the past months by the closed 55-day Fibo Bollinger Bands.

However, one that seems to be in a hurry to leave first, recording new decades high, is its stock Ilyda Informatics (ILYDA), where in yesterday’s session it closed the highest hour of the day at 0.82 euros with transactions of 31.7 thousand pieces. Graphical demand on the stock’s monthly chart is closer to the long-term resistance level of €0.775 and increasing monthly trading volume. Under these conditions, the price of Ilyda can reach the height of the five-year “accumulation” range in the medium and long term, targeting 1.35 euros. It should be noted that for the half of 2020, the company presented sales increased by 38% to 2.688 million euros compared to 1.949 million euros in the corresponding period of 2019, while EBITDA increased by 23%, closing at 1.172 million euros.

*Mr. Apostolos Manthos is responsible for technical analysis and investment strategy at Aenaon Markets.