Is Global Invacom Group Limited (SGX:QS9) A Tech Leader?

Global Invacom Group Limited (SGX:QS9), is a SGD$36.67M small-cap, which operates in the tech hardware industry based in Singapore. Whether it’s the next big thing in tech such as artificial intelligence and robotics, or an alliance with a partner in another industry, for example healthcare or manufacturing, tech companies have plenty of opportunities for their companies to thrive. Tech analysts are forecasting for the entire hardware tech industry, a positive double-digit growth of 14.74% in the upcoming year . Should your portfolio be overweight in the tech sector at the moment? Today, I will analyse the industry outlook, and also determine whether Global Invacom Group is a laggard or leader relative to its tech sector peers. Check out our latest analysis for Global Invacom Group

What’s the catalyst for Global Invacom Group's sector growth?

US-based mega-competitors have been, and continue to be, the key drivers of industry growth. Many tech companies are repositioning themselves by focusing on high-growth areas such as IBM’s artificial intelligence play in Watson and Adobe’s shift to marketing its product for cloud computing. In the previous year, the industry saw growth of 3.48%, though still underperforming the wider Singapore stock market. Global Invacom Group lags the pack with its sustained negative earnings over the past couple of years. The company's outlook seems uncertain, with a lack of analyst coverage, which doesn't boost our confidence in the stock. This lack of growth and transparency means Global Invacom Group may be trading cheaper than its peers.

Is Global Invacom Group and the sector relatively cheap?

The tech hardware sector's PE is currently hovering around 28x, above the broader Singapore stock market PE of 15x. This illustrates a somewhat overpriced sector compared to the rest of the market. However, the industry did return a higher 12.06% compared to the market’s 7.92%, which may be indicative of past tailwinds. Since Global Invacom Group’s earnings doesn’t seem to reflect its true value, its PE ratio isn’t very useful. A loose alternative to gauge Global Invacom Group’s value is to assume the stock should be relatively in-line with its industry.

What this means for you:

Are you a shareholder? Global Invacom Group has been a tech industry laggard in the past year. If your initial investment thesis is around the growth prospects of Global Invacom Group, there are other tech companies that have delivered higher growth, and perhaps trading at a discount to the industry average. Consider how Global Invacom Group fits into your wider portfolio and the opportunity cost of holding onto the stock.

Are you a potential investor? If Global Invacom Group has been on your watchlist for a while, now may be a good time to dig deeper into the stock. Although its growth has delivered lower growth relative to its tech peers in the near term, the market may be pessimistic on the stock, leading to a potential undervaluation. Before you make a decision on the stock, I suggest you look at Global Invacom Group’s future cash flows in order to assess whether the stock is trading at a reasonable price.

For a deeper dive into Global Invacom Group's stock, take a look at the company's latest free analysis report to find out more on its financial health and other fundamentals. Interested in other tech stocks instead? Use our free playform to see my list of over 1000 other tech companies trading on the market.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.