After the great tech stock boom of 2000, I'm finally feeling comfortable about "cloud communications software and solutions" companies (back then, the clouds were mainly in the bandwagon investors' minds).
Today I'm looking at full-year results from IMImobile(LSE: IMO).
What we saw from these was a 19% boost for operating profit to £4.9m, provided by a 24% rise in revenue to £76.1m. Operational cash generation of £11.9m with a cash conversion factor of 104% suggest the firm is producing the actual hard stuff in good measure -- and even after the £5.5m cost of acquiring Infracast, IMImobile was left with £14.7m in cash on the books.
Chief executive Jay Patel said: "There continues to be an overwhelming need for companies such as banks, mobile operators, retailers, utilities and major brands to invest in improving customer experience, predominantly through digital channels." Surely every one of us is painfully aware of that need and can think of at least one example of a big company reacting to problems with a woefully incompetent approach to social media.
Mr Patel went on to say: "We will continue to invest further in marketing and product development to establish a leading position in this growth market."
This year, adjusted earnings per share came in 6% ahead at 11p, for a P/E multiple of 19, and with modest rises forecast for the next couple of years, I'm quite happy with that.
Fundamental ratios don't matter so much with companies at this stage of their life as long as they don't get crazy, and IMImobile is best evaluated on the subjective nature of its business. I see it as a risky but attractive proposition.
Picks and shovels
Turning to a company offering services to the technology industry, I'm drawn to Gattaca(LSE: GATC), a specialist engineering and technology recruitment business -- firms like these can do well whichever leading-edge tech companies they serve.
I'm particularly intrigued by Gattaca's earnings growth record, its further growth forecasts, and its impressive dividend prospects.
Despite a drop in 2016, EPS has risen by 32% between 2o12 and 2016, and forecasts for the next two years would see further growth of 27% by July 2018.
On top of that, the dividend has soared from 15.6p per share in 2012 to 23p last year, and though it's expected to remain flat this year, we'd still see a yield of 7.6% on today's 302.5p share price.
Shares look cheap
In P/E terms, we're looking at a forward multiple of under 10, dropping to a bit over eight on 2018's EPS growth forecasts, so are there any negatives?
Well, a trading update in April suggested that profits for the full year would be approximately 10%-15% below prior expectations. Weaker trading conditions in the post-Brexit era were partially blamed, as were a few one-off cost overruns -- and I'm a little disturbed by the effects of that apparently not having been seen sooner.
But recruitment is very much a cyclical business, and a modest short-term underperformance is not unexpected. I'm a little cautious, but I feel the sector has a strong long-term future, and I can't help seeing the current share price weakness as a buying opportunity.
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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.