Getting comfortable with technology stocks

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Livewire Markets

Technology stocks are a growing part of the market, yet investors face the challenge of valuing companies that are not profitable and in some cases burning through cash reserves. Jeremy Bendeich from Avoca Investment Management says it is critical to understand the market position and opportunity for tech companies when assessing whether or not to invest. "What we are interested in is the size of the potential market. Where they sit relative to having either a first mover advantage or a truly sustainable competitive advantage." Bendeich says once you understand these to aspects you need to assess what there funding requirements are to get them to a cashflow positive position. In this video he discusses two companies that meet his requirements for an investment and explains how he undertakes is product due diligence:

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