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Four FTSE 350 technology innovators

by xyonent
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Even in our rapidly changing world, the past 12 months have stood out as a period of great evolution in technology. But Nasdaq isn’t the only place where major innovators congregate. Brits would do well to look closer to home to the Footsie and FTSE 250…

Halma

What they do: Halma is a life-saving technology company working to enable a safer, cleaner, healthier future.

By Paul Summers. I like to buy shares in technology innovators whose products are essential, not just desirable. FTSE 100 Stocks Halma (LSE: HLMA) certainly fits the bill.

Halma, a group of around 45 companies, produces safety technologies for industrial and logistics operations, monitor and protect the environment, and improve the quality of care delivered by healthcare providers.

I don’t know about you, but I don’t see this demand slowing down, so I’m confident the company will continue to raise its dividend by 5% or more annually for the foreseeable future, just as it has for the past 44 years.

The downside to all of this is that Halma shares will never trade at a low multiple of earnings. That said, the ongoing (albeit perhaps temporary) aversion to growth-oriented companies among UK investors makes it a good time for me to get in.

Paul Summers has no position at Halma

Relex

What they do: RELX is a global provider of information-based analytical and decision-making tools for professional and corporate customers.

By Andrew McKee My Stocks and Shares ISA has relatively low exposure to the technology sector, mainly due to high valuations across the board, but I do invest in technology companies where I see a clear competitive advantage. Relex (LSE: REL) is one such technology innovator.

The powerful dataset across risk, legal and insurance is continuously being upgraded with AI tools. Lexis + AI, launched in October last year, is a potential game changer for legal professionals. The solution offers conversational search, intelligent legal writing, insightful summarization, and document upload and analysis capabilities.

The company’s risk division is another area expected to see explosive growth over the next decade. Financial crime compliance and digital fraud are two of those areas. But insurance risk is just as important. The company’s proprietary data analytics and decision-making tools enable insurers to improve service across the value chain.

RELX isn’t cheap at 36 times earnings, and the stock will likely fall if enthusiasm for AI fades, but as a long-term investor, I remain bullish on the company’s prospects.

Andrew Mackey holds shares in RELX.

Relex

What they do: RELX is a global provider of information and data analytics to clients across scientific, medical and legal disciplines.

By Ben McPoland. FTSE 100 Data Company Relex (LSE: REL) has fully embraced the huge potential of new technology and is already deploying generative AI within its LexisNexis legal business.

The Lexis+ AI solution features conversational search, intelligent legal drafting and summarization, document upload and analysis, and is powered by RELX’s vast repository of legal information, significantly reducing the risk of fabricated content (hallucinations).

CFO Nick Ruff said the AI ​​tool is already “Whether you’re summarizing documents, conducting research, doing legal research, or preparing court filings, you’ll be much more efficient.. “

Last year, the company’s adjusted operating profit rose 13% to £3.03 billion on sales of £9.16 billion, up 8%. The company also launched a conversational AI product in its Science & Technology Health division this year to help clinicians provide higher quality patient care.

The stock isn’t cheap, trading at 27 times forward earnings, which could add some valuation risk.

However, given the fact that generative AI will enhance RELX’s business model, I believe this innovative FTSE company deserves a premium valuation.

Ben McPoland does not hold shares in RELX.

S4 Capital

What they do: S4 Capital is a UK-based digital media advertising agency network operating worldwide.

By Christopher Ruane. S4 Capital (LSE: SFOR) has left me with a significant loss of capital – the directors own a large proportion of the stock but have not bought much recently, despite the share price falling by almost two thirds in the past year.

Nonetheless, I see S4 as a technology innovator: its digital-only model within the vast global advertising industry means it’s designed for the current marketing world, not the past.

So why are stock prices falling?

The delayed accounting has shaken Citi’s confidence in the company, which has made positive operational progress so far, but has been losing money and has been piling up debt on its balance sheet in recent years.

Obviously, there are risks with this stock, but I expect debt reduction and cost controls to translate to the company’s profits. Given its potential, valuation seems cheap, so I would continue to hold.

Christopher Ruane owns shares in S4 Capital.

Sage Group

What they do: Sage Group provides integrated accounting, payroll and HR services primarily to small and medium-sized businesses.

By Royston Wilde. For the past 43 years, Sage Group (LSE:SGE) has steadily evolved its services to become one of the top five enterprise resource planning (ERP) providers in the world.

of FTSE 100 The company’s primary business is providing accounting and payroll software, and it is currently investing heavily in artificial intelligence (AI) to enhance the capabilities of its cloud-based services.

Recently released Sage Network Inbox and Wise Man’s Co-Pilotis the company’s first tool to leverage generative AI. CEO Steve Hare said machine thinking is “Change the natureWe aim to be at the forefront of this revolution, proclaiming our goal of “revolutionizing” accounting.

Sage’s shares have soared over the past 12 months, trading at a forward price-to-earnings (P/E) ratio of more than 35 times.

Such high multiples are common in tech stocks, but keep in mind that a high multiple like Sage’s also means a higher chance of a correction in price if any bad news comes along that rattles the market.

Royston Wilde does not hold any shares in Sage Group.

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