How can a value investor buy into technological innovation?

Look for companies exploiting new technologies

clock • 3 min read

In a world where Google is a verb and Amazon web services has nothing to do with spiders in the rainforest, it is easy to understand why some of the biggest and most highly priced companies in the world are technology firms.

However, as the TMT (Technology Media and Technology) bubble of the late 1990s showed, investing in technology does not always end successfully.  How can a value investor - someone who likes to invest in a business based on the current (rather than future) value of its assets, profits or cash flow - make money out of this technological revolution?  It may seem an impossible task, especially if you look at the valuation of Snap Inc, the owner of Snapchat, as an example. This loss-making company recently floated in the USA and now has a value of $24bn, roughly 59 times its last year's r...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Specialist

Deep Dive: Thematics offer diversification but investors must consider bond sensitivity

Deep Dive: Thematics offer diversification but investors must consider bond sensitivity

‘Dedicated specialists’

James Baxter-Derrington
clock 06 April 2023 • 4 min read
European private equity yet to spend €270bn worth of capital

European private equity yet to spend €270bn worth of capital

Deployment of capital expected

Kathleen Gallagher
clock 04 January 2023 • 1 min read
Early-stage biopharma: An opportunity for strategic investment

Early-stage biopharma: An opportunity for strategic investment

Disproportionately smaller investment

Ali H. Munawar
clock 10 August 2022 • 4 min read
Trustpilot