Is Monitise Plc A Better Buy Than ARM Holdings plc And Imagination Technologies Group plc For 2015?

Could shares in Monitise Plc (LON:MONI) beat those of ARM Holdings plc (LON:ARM) and Imagination Technologies Group plc (LON:IMG) over the next year?

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

sdf

2014 has been hugely disappointing for investors in Monitise (LSE: MONI). The mobile payment solutions provider has seen its share price collapse by 55% since the turn of the year, as major shareholder and customer Visa cut its stake to below 3% and is seeking to reduce it further.

However, with new shareholders on board and the company set to turn a profit for the first time in 2016, could now prove to be the perfect time to buy Monitise? And is it a better buy for 2015 than more established technology peers such as ARM (LSE: ARM) (NASDAQ: ARMH.US) and Imagination Tech (LSE: IMG)?

New Shareholders

While the news that Visa was planning on reducing its stake in Monitise caused a significant amount of uncertainty among investors, the company has responded by announcing three new blue-chip shareholders. Santander, Telefonica and Mastercard are all taking a stake in the mobile payment solutions provider, investing £49.2 million between them to take their combined stake to 8.2%.

Should you invest £1,000 in Sainsbury's right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Sainsbury's made the list?

See the 6 stocks

Future Potential

This is very positive news for Monitise and shows that, while Visa’s departure has been a disappointment, the company can look ahead to new partnerships in 2015 and beyond. Clearly, Monitise’s offering is highly appealing and is backed by the aforementioned shareholders, as well as customers such as RBS and HSBC. This shows that the product has potential and, with smartphones and internet banking becoming ever more popular, Monitise should benefit from an economic tailwind over the medium to long term.

A Black Bottom Line

Of course, Monitise’s future potential needs to equate to profitability and, with the company still being loss-making, this is likely to be the catalyst required in order for it to deliver sustained share price growth. As mentioned, Monitise is expecting to move into profit in FY 2016 and, in this respect, any disappointment could cause investor sentiment to deteriorate further. In other words, with the market pricing in success for Monitise’s income statement (in terms of a profit) in 2016, any delay in this space could hit its share price very hard.

Technology Peers

While the technology sector is highly volatile, ARM and Imagination Tech offer much more certainty than Monitise. For example, they are both forecast to be highly profitable in the current year, with ARM expected to increase its bottom line by 23% next year, and Imagination Tech by 39% in FY 2016. And, with both companies offering innovative services, they too appear to offer significant long-term potential for investors.

With ARM trading on a price to earnings growth (PEG) ratio of just 1.3 and Imagination Tech’s PEG being even lower at 0.7, the two companies appear to offer growth at a reasonable price. As a result, they both appear to be worth buying and holding for 2015 and, although Monitise could deliver much improved performance next year, potential investors may wish to wait for evidence of profitability before buying a slice of the mobile payment solutions provider.

5 stocks for trying to build wealth after 50

The cost of living crisis shows no signs of slowing… the conflict in the Middle East and Ukraine shows no sign of resolution, while the global economy could be teetering on the brink of recession.

Whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times. Yet despite the stock market’s recent gains, we think many shares still trade at a discount to their true value.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. We believe these stocks could be a great fit for any well-diversified portfolio with the goal of building wealth in your 50’s.

Claim your free copy now

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Peter Stephens owns shares in RBS and HSBC. The Motley Fool UK has recommended ARM Holdings. The Motley Fool UK owns shares of Imagination Technologies and Monitise. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Red briefcase with the words Budget HM Treasury embossed in gold
Investing Articles

Market jitters caused one of my FTSE 100 stocks to tank!

On Wednesday afternoon, a forlorn Chancellor prompted a sell-off of certain FTSE 100 stocks and led to a rise in…

Read more »

Mature Caucasian woman sat at a table with coffee and laptop while making notes on paper
Investing Articles

£5,000 invested in Greggs shares 1 month ago is now worth…

Greggs shares have sure been in the doldrums over recent months. But is this a FTSE 250 stock to consider…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

An 8.4% yield and down 33%, is Taylor Wimpey’s share price seriously cheap now?

Taylor Wimpey’s share price has fallen a long way as uncertainty plagues the housing market. However, things may be taking…

Read more »

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop
Investing Articles

Dr Martens was one of the top-performing UK shares in June. Time to buy?

Mark Hartley analyses whether Dr Martens’ sharp share price rebound makes it one of the UK shares worth considering right…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

Achieving a £1k a month passive income goal with just £20k in savings? It’s possible!

Mark Hartley outlines a simple yet lucrative passive income strategy involving dividend shares and starting with a £20k initial investment.

Read more »

Yellow number one sitting on blue background
Investing Articles

This is the most shorted FTSE stock!

Some investors appear to be speculating on the Yellow Cake share price. Our writer considers why they're targeting this little-known…

Read more »

A close up side view of a father and his young daughter who is a wheelchair user having a cute affectionate moment with each other whilst on a family day out in a beautiful public park in Newcastle upon Tyne in the North East of England.
Investing Articles

Prediction: in 12 months the barnstorming Lloyds share price could turn £10,000 into…

Harvey Jones has done well from the booming Lloyds share price over the last couple of years but can the…

Read more »

Transparent umbrella under heavy rain against water drops splash background.
Investing Articles

3 huge lessons I’ve learnt from the stock market in 2025

Mark Hartley reveals three vital lessons that the stock market has taught him so far this year and a trust…

Read more »