Aim-traded Accumuli (ACM: 23p), a leading independent specialist in IT security and risk management, clearly fits the bill as the company has just reported that trading for the six months to end September 2014 has been bang in line with the high growth expectations of analysts. Head of equity research Andrew Darley at brokerage finnCap is maintaining his estimates that Accumuli's revenues will rise by over 20 per cent to £20.7m in the 12 months to end-March 2015 to lift both pre-tax profits and EPS up by over 30 per cent to £3.4m and 1.7p, respectively.
This means that after stripping out 2.2p a share of net cash on the balance sheet, the prospective PE ratio is only 12, a modest rating for a company generating double-digit earnings growth. And with cash generation robust, and profits rising, Accumuli is forecast to lift its payout by 50 per cent to 0.7p a share in the current fiscal year. At the current share price, the prospective dividend yield is 3 per cent.
It's worth noting too that Accumuli's management reported a strong second quarter (to end September 2014) "in terms of order intake with a number of notable contract wins". This not only augurs well for the rest of the year, but prospects look well underpinned further out too. That's because the company's area of expertise is becoming increasingly critical for businesses combating the threat of cyber attacks compromising the confidentiality of information they hold and process. Threats to companies' network security are not going to go away irrespective of the problems in the eurozone that have been spooking investors.
However, despite the upbeat trading update ahead of the company's interim results on 25 November, the indiscriminate market sell-off has seen shares in Accumuli drift back from a high of 29p at the start of last month to 23p, the price at which I recommended buying in the spring ('Profit from cyber warfare', 23 April 2014). At this level they are massively oversold with the 14-day relative strength indicator showing a reading well below 20, the lowest since April last year! It's worth flagging up too that the price is now back at a former resistance level that capped progress between October 2013 and April last year. At the very least we are due a sharp technical bounce.
Moreover, given we are guaranteed the company will report a robust set of figures next month, and underpinned by a bumper order book, that bounce looks likely to happen soon. In the circumstances, I would use the share price weakness as an opportunity to buy ahead of the results. Please note that I last recommended buying at 26.5p ('Contract wins boost Accumuli', 5 August 2014).
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