Smarttech247 Group plc (LON:S247) recent contracts and underlying positive momentum has impressed Equities Head, Gervais Williams of Premier Miton, in a recent DirectorsTalk interview about his investment trust, The Diverse Income Trust plc (LON:DIVI).
DirectorsTalk asked:
Cybersecurity stocks have been a hot investment area for a few years now. We’ve seen the rate and sophistication of attacks increasing with AI deep fakes and state led attacks. Now Smarttech247 Group are holding a very strong position within the cybersecurity market and have ambitious expansion plans yet the share price at the end of January 2024 was around 19p – its lowest point since listing in December 2022.
Gervais Williams of Premier Miton commented:
Yes, that’s right. The share price drifted lower in 2023, but then so many market caps have. I know you might say that the mega caps of the US are going up, but the market caps in the UK are not participating at the moment. They will in future. I’m not worried about that. But specifically, I think the key for this one is that their VisionX technology has been endorsed by third parties.
What we really like is the three-year extension they’ve had for a global pharmaceutical company. That’s the kind of scale of organisation which is very careful about its partners and has chosen Smarttech247 Group plc for its cyber protection.
They’ve gone on to various platforms with some very impressive US corporations as well. They have still got cash from the issue so the company is safe, and it’s generating some profits.
So, the net effect is that we’re just still at a slightly early stage. Perhaps, share prices came off a little bit, but the underlying momentum in the company remains good, and that’s why we’re invested. When they come right, they don’t just come right in this area, technology stocks, when they come right, they can come right with a very substantial upside, and that’s really the nature of small micro caps.
The whole point is that they have a core option value and you can make 30% or 50% on your share price if things are successful but sometimes if you’re lucky, you can make three times or five times your money, and that’s the nature of this company. That’s the nature of many of the companies in the micro caps sector.
As long as they have the ability to trade through in the short term with cash and they don’t need additional capital, then the upside comes through in the share prices.
The Group is a multi-award-winning Managed Detection & Response company and a market leader in Security Operations.
