Top 3 ASX tech stocks to watch in June and beyond

We examine Bell Potter's recently updated key small-cap tech picks.

Bell Potter’s 3 key ASX tech stocks

In a way, the ASX has become a poster child for high growth, high multiple tech stocks. The WAAAX cohort, for example – comprised of WiseTech, Appen, Afterpay, Altium, and Xero – continues to trade on a set of steep, market defying multiples; yet nonetheless, in many instances, these companies continue to see their share prices bid higher.

Mind you, there remain many Australian tech stocks which face significantly less coverage. With that in mind, below we look at Bell Potter’s recently updated key ASX-listed, small-cap tech picks.

Uniti Group share price: the strength of recurring revenues

Since the market sell-off in May, Uniti Group (UWL) has seen its share price recover strongly, almost doubling since 18 March, to last trade at $1.55 per share.

As part of the company's most recent quarterly update, Uniti recorded a staggering 754% uptick in free cash flow, on a quarter-over-quarter basis; and noted that its ‘annualised run-rate EBITDA as at 31 March 2020 [was] tracking above forecasts.’

Overall, Bell Potter sees good value in the stock, noting that Uniti's high levels of recurring revenues stand out as a key positive and further arguing that the company will benefit from the ‘shift to working from home and the associated increase in residential demand for high speed broadband services.’

Bell Potter has a Buy rating and a price target of $2.15 per share on Uniti Group – implying significant upside from current price levels.

Infomedia share price: potential acquisitions loom

Though Infomedia (IFM) has seen its market capitalisation fall by around a quarter since January, Bell Potter's current price target on the stock imply potential upside of around

As part of a $70 million institutional placement that Infomedia completed in April, the company also reaffirmed its FY20 guidance, noting that it expected its full-year revenue to come in at between $93 to $95 million, representing an increase of between 10% to 12%, while the company expected its full-year earnings (NPAT) to come in at between $18 to $19 million, representing an increase of between 12% to 18%.

Looking forward, Bell Potter analysts noted that while Infomedia has underperformed its large-cap tech counterparts in recent times, the potential for an acquisition or two, is becoming more likely, especially now that the company has raised a total of $84 million.

Specifically, it was noted that:

‘We do, however, expect this underperformance to reverse in the coming weeks or months given the likelihood of an acquisition or two and assuming the market remains robust which will likely cause some shift in preference towards mid caps in the search for value.’

Bell Potter has a Buy rating on Infomedia.

PWR Group share price in focus

PWR Group (PWH), which heavily relies on the elite motorsports industry and the automotive aftermarket, has been significantly impacted by the coronavirus pandemic. The stock is down ~13% YTD and Bell Potter has downgraded its FY20 earnings outlook.

According to Bell analysts there is good news however, with it being noted that ‘elite motorsports and OE programs are now recommencing and the automotive aftermarket is recovering so the worst now appears to be past for the company.’

This, according to Bell, supports a strong outlook for FY21. Indeed, although the brokerage house expects PWR's earnings per share (EPS) to fall by 15% in FY20, an EPS increase of 49% is currently expected in FY21.

Bell Potter has a Buy rating and a price target of $5.00 per share on PWR Group.

How to trade ASX tech stocks

What do you think: do you see bullish or bearish opportunities from Australia’s tech sector? Trade accordingly. For example, you can trade the stocks we have discussed today – both LONG and SHORT – through IG’s world-class trading platform now.

To buy (long) or sell (short) Infomedia (IFM) with CFDs, follow these simple steps:

  1. Create an IG Trading Account or log in to your existing account
  2. Enter ‘Infomedia’ in the search bar and select it
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.


Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.