Regal Funds bullish on BTH

Not sure if anyone read this article in the AFR, but nice mention of their holding in BTH. Looking good on the charts too.

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Phil King, the founder of Regal Funds Management, started the month of March with a swim at Manly beach in Sydney in the knowledge that February was one of the best months ever for several of his equity funds.
The funds performed well because they were positioned to take advantage of two of the positive themes to emerge from the 2018 reporting season – technology growth stocks and cash rich resources stocks.
"Technology and resources are the two sectors going really well," he says. "I think it is good for shareholders and the broader market that resources companies are giving lots of capital distribution."

Tech is volatile but it is where the organic growth is, according to Phil King, founder of Regal Funds Management. [email protected]
Regal's investments in resources include large cap and small cap stocks including Rio, BHP, Fortescue Metals, Ausdrill, Coronado and Jupiter. The fund manager has $1.6 billion in funds under management.
In the tech sector, Regal's funds benefited from the surge in the share price of language technology company Appen. King says Regal has sold out of another high flying tech stock, Altium, which develops software for the design of electronic products.


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King says Regal has sold most of its holding in buy now, pay later technology company Afterpay Touch. "We think they are a great business but the valuation is a little stretched," he says. "We will probably look to buy back in later in the year."
Investors in tech stocks need strong nerves because of the high level of volatility. One measure of volatility is the 50 day moving average, which is 55 for Appen and 54 for Afterpay.
Compare that to Telstra and Commonwealth Bank of Australia which have 50-day moving averages of 27 and 19, respectively.
Despite the volatility in tech, King says emerging companies offer good organic growth opportunities that cannot be found elsewhere.
Here are seven tech stocks currently favoured by Regal and the reasons why the fund manager likes them.
Bigtincan Holdings. It sells a software product that enables sales and service organisations to engage with customers.
Regal likes it because of consistent 35 to 40 per cent organic revenue growth from both new client wins and expanded contracts with existing customers. "It generates software as service revenue, with low churn and high lifetime customer value," Regal says.
"Recently achieved cashflow break even on a normalised basis. We believe it is undervalued, trading at only three times current recurring revenue base of $21 million."