A recent survey of top VC investment themes shows a big push in 3 primary areas. Two you can probably guess: artificial intelligence and robotics. The third is just as powerful, but may catch you by surprise: Financial Technology, or Fintech.
For public equity investors, there are plenty of exciting names in the space that may offer huge opportunities this year. We take a look at four of our favorite names here: Alibaba Group Holding Ltd – ADR (NYSE:BABA), Fiserv Inc (NASDAQ:FISV), Surge Holdings Inc. (OTCMKTS:SURG), and Square Inc (NYSE:SQ).
Alibaba Group Holding Ltd – ADR (NYSE:BABA) is a supply chain and fintech innovator that has shown massive growth at the nexus of a number of cutting-edge fields.
The company is based in China, and the stock has been held back by the protracted trade dispute between the US and China. But the fundamental growth we have seen here has helped the stock massively outperform other Chinese stocks during the same period.
Alibaba Group Holding Ltd (NYSE:BABA) bills itself as a company that, through its subsidiaries, operates as an online and mobile commerce company in the People’s Republic of China and internationally.
This is Jack Ma’s Chinese version of Amazon, or so the popular understanding goes.
The company operates in four segments: Core Commerce, Cloud Computing, Digital Media and Entertainment, and Innovation Initiatives and Others. It operates Taobao Marketplace, a mobile commerce destination; Tmall, a third-party platform for brands and retailers; Rural Taobao program that enables rural residents and businesses to sell agricultural products to urban consumers; 1688.com, an online wholesale marketplace; Alibaba.com, an online wholesale marketplace; AliExpress, a retail marketplace; Lazada, an e-commerce platform; and Lingshoutong, a digital sourcing platform.
The company also provides pay-for-performance and display marketing services; and Taobao Ad Network and Exchange, a real-time bidding online marketing exchange in China; and digital payment and financial technology platform services.
In addition, much like Amazon, it offers cloud computing services, including elastic computing, database, storage, virtualization network, large scale computing, security, and management and application services, big data analytics, a machine learning platform, and Internet of Things and other service for enterprises; and payment and escrow services; and movies, TV drama series, online dramas, variety shows, news feeds, games, literature and music, and other areas through various content platforms, as well as develops and operates mobile browsers.
Further, the company provides AutoNavi, a mobile digital map, navigation, and real-time traffic information; DingTalk, a proprietary enterprise communication and collaboration platform; and Tmall Genie, an AI-powered voice assistant, which helps consumers to shop, order local services, search for information, control smart appliances, and play interactive content.
If you’re long this stock, then you’re liking how it has responded to the announcement. BABA shares have been moving higher over the past week overall, pushing about 6% to the upside on above average trading volume.
Fiserv Inc (NASDAQ:FISV) has been launching higher in one of the steadiest growth trends in the market over the past 7 years. And the trend looks like it might be accelerating in recent action.
The company managed to rope in revenues totaling $3.1B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 121.5%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($1B against $16.7B, respectively).
Fiserv Inc (NASDAQ:FISV) provides financial services technology worldwide.
The company’s Payments and Industry Products segment provides electronic bill payment and presentment services; Internet and mobile banking software and services; account-to-account transfers; person-to-person payment services; debit and credit card processing and services; payments infrastructure services; and other electronic payments software and services.
This segment also offers card and print personalization services; investment account processing services for separately managed accounts; and fraud and risk management products and services. Its Financial Institution Services segment provides account processing, item processing and source capture, loan origination and servicing products, cash management and consulting services, and other products and services that support various types of financial transactions.
This segment also provides ACH and treasury management, case management and resolution, and source capture optimization services to the financial services industry. The company also provides bank payment and liquidity management solutions, as well as Internet based mortgage software and mortgage lending technology solutions. It serves banks, credit unions, investment management firms, leasing and finance companies, billers, retailers, and merchants.
Fiserv Inc (NASDAQ:FISV) hasn’t really done much of anything over the past week, with shares logging no net movement over that period. But the longer-term bullish trend remains very much intact.
Surge Holdings Inc. (OTCMKTS:SURG) shares have been aggressively moving higher and likely for good reason as the company shows clear and concrete signals of moving into a new phase of possibly exponential growth, especially on the top-line.
As we see it, this is a stock that has tremendous upside potential if all these powerful pieces come together right. And right now, there’s nothing that would suggest any other outcome. The positioning narrative here is strong, as the company moves into a leadership role in the regional supply chain space after carving out a large and growing footprint in the prepaid mobile space.
Surge Holdings Inc. (OTCMKTS:SURG) has successfully parlayed that niche into a dominant role in the c-store supply chain space to such effect that the company was just named to the Deloitte “Fast 500” list for technology companies in North America as one of the fastest growing tech/innovation companies on the planet.
At its core, SURG is a retail supply chain company that provides a virtual wholesale marketplace hub for retailers, as well as telecom services for low income customers and financial payment services for the unbanked and underbanked.
Surge products are delivered through a nationwide network of convenience stores and corner markets connected to the recently launched SurgePays Network.
This retail platform is designed to transform the traditional supply chain by providing local retailers seamless access to global products and to empower the corner store to select, order and fulfill delivery of wholesale goods from around the country.
This platform also provides manufacturers a cost-effective and efficient platform to access point of sale retailers nationwide.
In terms of recent catalysts, the big story is the company’s recent acquisition of ECS – adding 9,800 stores to the Surge network, $48.7 million of annualized revenue already completing over 18,000 transactions a day.
That’s going to mean a massive expansion in the footprint for the Surge network. The way this works is that footprint widens the channel for future expansion as each new location in the network is then maximized through product expansion. In other words, adding more store locations in the network adds immediate growth, but also new low-hanging opportunities for even more future growth.
Surge Holdings Inc. (OTCMKTS:SURG) recently reported more stellar growth data. Consider that this is a company that did $1,429,872 in sales for 2017. Q3 2019 showed Quarterly Revs of $4.9 million, which is $19.6 million annualized. The ECS acquisition will bump that up to $68 million on an annualized basis.
Square Inc (NYSE:SQ) shares have been consolidating in a bullish lateral range on the long time frame charts for the past 18 months. That presents new investors with the potential for involvement in a new leg of the longer-term upward trend.
This is a core play in the fintech space, enabling small businesses to achieve efficient transactions at point of sale. But the company has evolved into a wider play in the space over the past two years.
Square Inc (NYSE:SQ), for a little background, bills itself as a company that provides payment and point-of-sale solutions in the United States and internationally.
The company’s commerce ecosystem includes point-of-sale software and hardware that enables sellers to turn mobile and computing devices into payment and point-of-sale solutions.
It offers hardware products, including Magstripe reader, which enables swiped transactions of magnetic stripe cards; Contactless and chip reader that accepts Europay, MasterCard, and Visa (EMV) chip cards and Near Field Communication payments; Chip card reader, which accepts EMV chip cards and enables swiped transactions of magnetic stripe cards; Square Stand, which enables an iPad to be used as a payment terminal or full point of sale solution; and Square Register that combines its hardware, point-of-sale software, and payments technology, as well as managed payments solutions.
The company also provides Square Point of Sale software; Cash App, which provides access to the financial system, allowing customers to electronically send, store, and spend money; Caviar, a food ordering platform for restaurants to offer food ordering, pickup and delivery, to their customers; and Square Capital that facilitates loans to sellers based on real-time payment and point-of-sale data.
We started off by noting that SQ recently hit the wires with the announcement
The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 10% in that timeframe.
Square Inc (NYSE:SQ) generated sales of $1.3B, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 7.9% on the top line. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($1.2B against $1.6B, respectively).