Taking an old school approach to tech investing
By International Adviser, 25 Jul 18
Technology is undoubtedly today’s most discussed investment sector, with the high-profile FAANGs front and centre of most conversations. But it is important to recognise the opportunities within the diverse tech sector run far deeper, says Jacob Mitchell, portfolio manager and chief investment officer of Antipodes Partners.
NetApp, one of the two dominant providers of enterprise storage systems over the past two decades, is a good example of sentiment temporarily trumping reality.
The rise of Amazon’s public cloud services, part of which comprised cheap commodity storage, began to eat into the market for dedicated storage vendors such as NetApp.
While this market shift was indeed real, the market by early 2016 had become convinced traditional storage was dead and NetApp’s shares traded at just 4x free cash flow.
Fast forward two years and NetApp’s business has evolved substantially.
With the accelerated introduction of a new operating system that integrates well with hyperscalers Amazon Webservices, Microsoft Azure and Google Cloud, the company has leveraged this to become the fastest growing company in the ‘all flash’ storage segment, with hard disks giving way to solid state flash memory for many high-end corporate and web-scale environments.
Tags: FAANG | Investment Strategy
