What you would have if you invested R1,000 in South Africa’s biggest tech companies in January

 ·12 Jun 2024

ISA Holdings, is the best-performing tech stock among the listed technology companies of South Africa’s Johannesburg Stock Exchange (JSE).

Between 1 January and 12 June 2024, four of the 12 companies compared—PBT Group, Datatec, Bytes Technology, and Capital Appreciation—saw their share prices in the negative.

While some South African Technology companies listed on the JSE have had a tough year so far, two South African tech stocks, ISA Holdings and 4Sight Holdings, produced price returns of over 50%.

ISA Holdings has returned just over 58% year-to-date, and 4Sight Holdings has returned 50%.

Information Security Architects (ISA) Holdings has been operating since the 1990s. Initially, the company focused on reselling firewall and antivirus technologies.

Over the years, it has transitioned to cybersecurity, a field that is vital as corporations face increasing threats from ransomware attacks and data breaches.

For the year ending February 2024, ISA reported a remarkable 33% revenue growth, with 88% of its revenue coming from subscription models.

The company also achieved a substantial 35.5% increase in headline earnings per share (HEPS).

Excluding equity-accounted earnings, ISA’s profit before tax (PBT) margin stood at 22.3% for the financial year.

Notably, ISA plans to pay out all of its HEPS as dividends, maintaining the same approach as last year, which is positive news for investors.

4Sight Holdings’ subsidiaries specialise in artificial intelligence (AI), machine learning, big data, cloud, and business intelligence.

The company services customers in the telecommunications, mining, manufacturing, energy, chemicals, private and public sectors.

Its annual results, which ended 30 May 2024, showed an increase in revenue of 57.7% and operating profit of 76.9%.

Basic earnings per share increased by 153.8% from 2.378 cents per share to 6.036 cents per share, while its cash balance increased by 57.8%.

Both ISA and 4Sight Holdings have impressive cash quality earnings and are operating in growth areas.

On the opposite end of the spectrum, Capital Appreciation saw the biggest losses, albeit only -6%.

According to the company, the software division encountered unexpected challenges this year due to bench overcapacity, which delayed the commencement of some large client projects.

Despite delivering several successful software projects and acquiring new customers, the division’s financial performance did not meet expectations.

Regardless, the group did, however, grow gross revenue by 19% to R1.2 billion and earnings before interest, taxes, depreciation and amortisation (EBITDA) by 53% to R252.8 million.

Following Capital Appreciation are Bytes Technology and Datatec, which saw their YTD performance slump by 5% and 2%, respectively.

The table below compares the performance of the shares of South Africa’s Tech stocks and what the value of a R1,000 investment in each company at the start of the year would be today (as of 12 June 2024).

CompanyShare price change in YTD 2024Today’s value of R1,000 investment invested at the start of 2024
ISA Holdings+58.40%R1 584
4Sight Holdings+50.00%R1 500
Allied Electronics Corp.+32.52%R1 325
Karooooo+27.38%R1 273
Prosus N.V.+26.89%R1 269
Naspers+26.34%R1 263
EOH Holdings+8.39%R1 084
PBT Group-1.38%R986
Bytes Technology-5.52%R945
Capital Appreciation-5.92%R941

Read: How much you would have if you invested R1,000 in Capitec, FirstRand, Nedbank, and more in January

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