Financial Trading Blog
Stock of the day 17/03/2015 – Imagination Technologies Group PLC
In terms of the markets, a dire 2013 gave way to a middling 2014 for the company; however come the New Year Imagination Technologies has made tentative gains in 2015. It started the year at £2.32, better than 2014’s £1.80 but a far cry from 2013’s £4.00; in mid-January the company hit its 2015 low of £2.19 as it was dragged down by a market wide slump. Since then the stock has continued on a gradual upswing, reaching £2.66 in mid-February, its highest price since September 2013, and following its entry to the FTSE250 at the start of March is now trading at £2.59.
At the end of February Imagination published details of its PowerVR ‘super-GPU’; the newest version of the graphics processor found in certain Apple products, this updated product stands a possible chance of being used in an Apple TV ‘refresh’, something that is long overdue. Similarly, it was confirmed in March that the company is also in the early stages of developing various 5G projects, something Imagination feel is key in securing a premier position in the rapidly approaching ‘Internet of things’.
For all this forward thinking, on paper things haven’t been so great for Imagination. The company saw a 7% fall in net profit in 2013 and a 14% fall in 2014. Yet despite these figures, the company is forecasting a 32% in earnings by next year, something that has spurred on the stock despite its weak performance in the past couple of years. At the same time, the connections with the Dow Jones’ latest debutante Apple hasn’t hurt the stock either, as Imagination hung on the coattails of the tech giant’s record breaking surge at the start of the year.
From comments given by Imagination’s CEO Sir Hossein Yassaie recently, it is clear where the company’s focus lies. Yassaie also urged investors to look beyond the pure numbers of the business, and instead into the future of the industry and the strength of Imagination’s position in the sector. However for all of Yassaie’s insistence on Imaginations new horizons, analysts remain slightly less convinced, giving the stock a consensus rating of ‘hold’ and a 12 month target price of £2.03.
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