It is that time of year again! Time to dust off the crystal ball and begin making predictions for the coming year. Hopefully, the global recession is behind us, that "trough" to become a distant memory in short order.
For those familiar with "seasonal investing", banks and transportation stocks typically lead the way in a recovery, with technology stocks right on their heels. From a purely South African perspective, what technology companies are "up-and-comers" and what firms of longstanding with branches in our nation are prepared to excel in 2013? I have five names for each category.
First, let's begin with the multinationals that have familiar names and offer potential for stable stock appreciation in the coming year. These companies are IBM, Cisco, Microsoft, Siemens, and SAP.
Coincidentally with their major brand recognition, each of these firms also received the coveted BEST Employers 2011/12 Certification Seal by Corporate Research Foundation Institute. The institute, within its evaluation process, reviews pay and benefits, career opportunities, working conditions, training and development and company culture. By its admission, "These organisations are at the cutting edge of the industry in South Africa."
How have these stocks performed over the past 12 months? Here is a comparative snapshot of returns for each company over the period:
Each of these companies is a leader in its technology field of endeavour. Their combined returns have followed the generally favourable trend for the past year of a gradually improving global economy.
The problems in Europe have caused the wavelike perturbations to occur, most evident with Siemens, which is headquartered in Germany. If and when the global economy picks up steam, these stocks will be prepared to outperform the market as demand picks up for their various products and services.
Picking prospective winners in the stock market can be a daunting task, but selecting smaller firms that have excelled in the South African market and are building their respective brand recognition as we speak, is even more difficult. In this case, one must refer to the experts that have devoted the time and expense to review all "contenders" and categorise these firms, based on a list of carefully selected criteria.
Let's begin with the multinationals that have familiar names and offer potential for stable stock appreciation in the coming year.
Forbes Africa, a licensed affiliate of Forbes Magazine, recently surveyed and published its list of the "Top 20" of Africa's technology start-ups. In order to qualify, these companies had to "have been in operation for less than 10 years; provide solutions to some of the continent's most pressing socio-economic and communication problems, have a robust social media presence, and must be Pan-African in scope and service offering."
Five of these specialty firms are from South Africa.
Yola: Vinny Lingham, a South African-born Internet entrepreneur, founded Yola in 2007. Yola, formerly named "Synthasite", assists individuals with building their own Web sites by providing easy-to-use drag-and-drop multimedia tools and features.
Cobi Interactive: Cobi Interactive is a local player in the ever-expanding market for mobile software. Its focus on software development provides mobile technology and strategy consulting for top African organisations.
Obami: Obami was founded in 2009 under the premise of bringing a social network and learning management system to South African schools, teachers and students.
Skyrove: Skyrove specialises in the WiFi industry and is now SA's largest independent WiFi hotspot network. It has built and managed over 600 WiFi hotspots in South Africa.
Sembuse: Sembuse is a South African mobile instant messaging utility. Its primary service is a mobile social network and instant messaging platform.
Which one of these fledgling firms will make big headlines near you in 2013? Only time will tell.
* Tom Cleveland owns a consulting practice and writes financial articles on behalf of the ForexTraders Web site.
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