The FTSE 100 The index is swelling, trading at the highest price since the epidemic. Now seems like a great time to add some UK shares to my portfolio. I am extremely enthusiastic in the technology sector. Although UK tech companies do not rule the market like the US, there is a lot of potential for growth. Here are two UK tech stocks that I think are poised for stable returns over the next decade.
Leading the change
There were groups (LSE: AVV) has been on my watchlist for months. The software firm first got on my radar when I was looking for technology companies with promises of environmental protection. I see this as a big marker for future performance in the technology sector over the next decade.
A large percentage of Aveva’s products focus on data management and cloud computing systems for the energy sector. Data-driven models of power generation help to optimize the supply chain, reducing environmental impact. OSIsoft’s 3.8bn purchase appears to be a move to strengthen the company’s data-management arm. Aveva already works with industry leaders like BP, GlaxoSmithKline, And EDF. This is a big win in my book.
One risk is that the current fuel and oil crisis could force companies to reduce operational costs, which could affect Abeva. Another is the volatility of the share price. The stock slipped dramatically due to a change in leadership in April and market concerns in September. It tells me that traders are highly responsive to news about Aveva stock. Also, the company is set to release a trading update on October 28th. A positive result could increase the share price.
In the long run, this technology stock looks promising. And although the shares look attractive at their current price of 3,690p, I am looking to measure the market response to the company’s trading updates before making an investment.
Increase in technical stock
Serilion (LSE: CER) has spent an incredible year in the market with a 159% return in the last 12 months. Often to be ignored FTSE AIM Company, this run is a great sign for investors in the UK tech space.
The company primarily provides customer management and billing systems to the telecom industry. I’m excited about recurring revenue in the software space because it indicates customer retention and satisfaction. In the first half of 2021 (H1), Sierra Leone’s recurring revenue increased by 226%. Software company Suriname and Latin American Telesur have significantly expanded their global presence through a 1.4 million deal. This increased revenue from new orders by 148% to .6 23.6m (H12020: £ 9.5m).
A big concern for my potential investment is the price of inflated shares at the moment. At 815p, Cerillion shares are trading 55 times the profit-to-earnings (P / E) ratio. If a market crash occurs, investors may flee, opting for more stable and cut-price options. Also, despite the recurring revenue growth, it is a small percentage of operations. Any breach in the current agreement could reduce revenue in the future.
But, the company is still expanding well and showing signs of becoming a technology stock major for my long-term portfolio. There is supposed to be a trading update in November, but I will consider investing in Sierra Leone today to capitalize on the potential jump in prices next month.
Suraj Radhakrishnan has no position in any of the mentioned shares. Motley Flower UK recommends GlaxoSmithKline. The opinions expressed in the companies mentioned in this article may differ from those of the authors and therefore the official recommendations we make on our subscription services such as Share Advisors, Hidden Winners and Pro. Here at The Motley Flower we believe that considering a variety of insights makes us a better investor.